This ones bursting out like a rainstorm (pun intended) exciting stuff...
Eucalyptus, according to GigaMon, appears to be on the verge of raising a round with a post valuation of $100M on best I can tell revenues in the $0M range! (Granted, a big name CEO joined, but still, 100M valuation??) When I saw this, it really got me thinking of 1) are we entering a cloud bubble and 2) why, even if we are, how the cloud is changing the business that I and my clients are in. I'll leave topic 1 for another day, but let's take a look at #2.
4Ps and 3Cs - A Cloudy View
Let's pull out the trusty old standard and QUICKLY examine how these change or might change because of the cloud....
Product - The cloud opens up new delivery options for just about any hardware or software offering or capability. IT vendors MUST rethink their product plans and at a minimum better have good reasons NOT to be in the cloud.
Pricing and Cost- In IT mind, cloud = subscription, but does cloud = cheap? That's one of many open questions. The move from perpetual to subscription business is a very tricky one the bigger you get, but the cloud is accelerating an already present trend. Services = subscription. IT products = services...get it...How do you price cloud offerings relative to your traditional on premise/package ones...
And on the cost side, the good news, it's really cheap to get into business, no more hardware, no more datacenters, no more test labs, no more power bills. Ahhh, that works great for new start-ups. But aren't you ISVs used to zero marginal costs on sales. Sorry!, get ready for COGS, more users = more COGS. A great example of a business model issue that helps new entrants move faster than existing ones.
Worried about margin cannabilization, well, guess what, the yCombinator start up down the street built hosting COGs into the model from day 1. They don't expect 95% margins, but you do, oh, no wonder their offering is cheaper. Oh, and by they way, they've been built for low cost scaling too, while it's going to take you a year to get there. Price for scale now and take a margin hit??? Oh so many great marketing problems to solve!
Place - How do you spell "disinter-mediation?" C-L-O-U-D. As product become services, product providers become service providers. Distribution is "free" and
market friction goes away. New geos open without friction. At least that's the theory, but the reality is much more complex and the channel will not go away without a fight and transforming itself...
Promotion - Try and buy, freemium, SEO, Social Media, Viral spread. The Cloud accelerates ALL of these trends. Time to learn some new tricks???
Customer - Who's your customer, where are they, what do they expect. What are they thinking, what are their habits, who cares about you? How do they find you (see P=Promotion) and how do they expect to be found. As more customers can easily try your product is it right for them, are you missing new growth segments that you just aren't looking for???
Company - Is the company ready for change? Is the executive team engaged or scared. How high is the sponsorship of cloud inititatives? Is it genuine of lip service. Do you understand the business model barriers to transformation? Sales quota and incentives, rev rec, HR policies? This type of change can hit every corner of the business, you've got to be ready.
Competition - New competitors, more cloud ready, new substitute products, new pricing models to compete with and on and on. What Hosting provider or Telco would have ever predicted Amazon as a competitor???
OK, have I convinced you or is the cloud all hype? I'm ready to add the 4th C to the old model, CLOUD! Are You????
Showing posts with label Cloud Computing. Show all posts
Showing posts with label Cloud Computing. Show all posts
Wednesday, March 31, 2010
Tuesday, November 24, 2009
The Chicken, The Ostrich and the Wiseman; A Holiday Tale of Caution and Opportunity
(Authors note: I have Cloud Computing on the brain. My client, Nimsoft, is changing the landscape of IT Monitoring with their recent Unified Monitoring Launch. I penned this little parable in honor of the Nimsoft customers who have the courage to challenge the status quo...For my non-tech friends, well, the puns will probably be lost on you, sorry...)
Once upon a time, not so long ago, in a not so faraway land called eSPee land, there lived 3 great friends, the Chicken, the Ostrich and the Wiseman. Not only were they great friends, but they were also fierce business rivals. For many years, they had competed with each other and had all built strong and thriving enterprises.
While it was their custom to avoid business conversations almost entirely, once a year, on the Friday after Thanksgiving, they would meet for breakfast to talk turkey (though that term somewhat offended 2 of them!). At one rather ominous meeting, the conversation went something like this…
The Chicken said, “My friends, though business is good, I fear the worst. Clouds have been gathering over eSPee land and I am quite scared. The waters of the mighty Amazon , EverChanging 2day, threaten to flood us all out of business. I am paralyzed and fear that all the work we have done is doomed.”
The Wiseman nodded, and showed great empathy to the Chicken’s concerns, then turned to the Ostrich.
The Ostrich stretched out his neck and said, “ Mr Chicken, as always you worry too much. These Clouds are yet another passing fancy. My customers are a bit confused, but my key vendors, Harold & Penny and Ida’s Big Machines assure me that they are ready. I’ll stick to them and keep focused on my customers, you can’t lose when you work with the best”
The Wiseman smiled, and as he was in the habit of doing, thought before he spoke. He sipped his coffee, rubbed his beard and said, “My dear friends, I share many of your concerns. Mr. Chicken, I believe you are right to see the clouds as a threat to what we have built, yet does this mean we are doomed? Mr Ostrich, I agree we must focus on our customers, but really, you’ve been with those old vendors for decades, are they really ready?”
With that the Chicken balked and left in a hurry, still panicked, and the Ostrich called his rep who sent the call to a reseller, who finally called the Ostrich back in a few weeks and told him everything would be OK.
A few years later, the three friends met for a farewell dinner for the Chicken and the Ostrich, who were both retiring. The Wiseman rose to give a speech;
“My dear friends, it is with mixed emotions that I bid you both farewell. Mr Chicken, I was sad to see your business close. I wish you well in your retirement in Miami. I warned you not to panic at the Clouds and to invest, but you were too scared to act. Mr. Ostrich, your customers did love you, but those old vendors loved you more, in fact, they loved you to death. I warned you to change, but, well, I hate to state the obvious, but you just had your head in the sand. I am glad we were able to buy your remaining business, and I wish I could have paid more, but many of your customers had already came my way. Had you just listened to me and followed my moves to the new vendors, those who were built for the Cloud and the sun, you might have survived. I am thrilled that you will be enjoying your retirement too.”
The Wiseman really meant what he had said. He had adjusted and invested, without losing sight of his customers needs. He had aligned with new vendors, those who had both vision and execution, but were not tied to the past. He realized that he lived in a Cloudy place (think Seattle!) but knew that this never stopped Bill Gates, so why should it stop him. He business thrived in this new Cloudy world, though he truly did miss his friends…
The End
Once upon a time, not so long ago, in a not so faraway land called eSPee land, there lived 3 great friends, the Chicken, the Ostrich and the Wiseman. Not only were they great friends, but they were also fierce business rivals. For many years, they had competed with each other and had all built strong and thriving enterprises.
While it was their custom to avoid business conversations almost entirely, once a year, on the Friday after Thanksgiving, they would meet for breakfast to talk turkey (though that term somewhat offended 2 of them!). At one rather ominous meeting, the conversation went something like this…
The Chicken said, “My friends, though business is good, I fear the worst. Clouds have been gathering over eSPee land and I am quite scared. The waters of the mighty Amazon , EverChanging 2day, threaten to flood us all out of business. I am paralyzed and fear that all the work we have done is doomed.”
The Wiseman nodded, and showed great empathy to the Chicken’s concerns, then turned to the Ostrich.
The Ostrich stretched out his neck and said, “ Mr Chicken, as always you worry too much. These Clouds are yet another passing fancy. My customers are a bit confused, but my key vendors, Harold & Penny and Ida’s Big Machines assure me that they are ready. I’ll stick to them and keep focused on my customers, you can’t lose when you work with the best”
The Wiseman smiled, and as he was in the habit of doing, thought before he spoke. He sipped his coffee, rubbed his beard and said, “My dear friends, I share many of your concerns. Mr. Chicken, I believe you are right to see the clouds as a threat to what we have built, yet does this mean we are doomed? Mr Ostrich, I agree we must focus on our customers, but really, you’ve been with those old vendors for decades, are they really ready?”
With that the Chicken balked and left in a hurry, still panicked, and the Ostrich called his rep who sent the call to a reseller, who finally called the Ostrich back in a few weeks and told him everything would be OK.
A few years later, the three friends met for a farewell dinner for the Chicken and the Ostrich, who were both retiring. The Wiseman rose to give a speech;
“My dear friends, it is with mixed emotions that I bid you both farewell. Mr Chicken, I was sad to see your business close. I wish you well in your retirement in Miami. I warned you not to panic at the Clouds and to invest, but you were too scared to act. Mr. Ostrich, your customers did love you, but those old vendors loved you more, in fact, they loved you to death. I warned you to change, but, well, I hate to state the obvious, but you just had your head in the sand. I am glad we were able to buy your remaining business, and I wish I could have paid more, but many of your customers had already came my way. Had you just listened to me and followed my moves to the new vendors, those who were built for the Cloud and the sun, you might have survived. I am thrilled that you will be enjoying your retirement too.”
The Wiseman really meant what he had said. He had adjusted and invested, without losing sight of his customers needs. He had aligned with new vendors, those who had both vision and execution, but were not tied to the past. He realized that he lived in a Cloudy place (think Seattle!) but knew that this never stopped Bill Gates, so why should it stop him. He business thrived in this new Cloudy world, though he truly did miss his friends…
The End
Wednesday, August 5, 2009
Clouds here, clouds there, macrotrends, opptys?
It seems to me that Cloud computing is everywhere, as I've pointed out in a previous post. I would like to point out 3 macro trends that get are related, but get a bit less attention
Trend 1: The Merging of Enterprise and Service Provider: For years, it's been talked about, but virtualization and "cloud" will accelerate this even more. The compute "grid" is pretty dang agnostic about location, Service providers will need to be more enterprisey and visa versa.
Trend 2: Disambiguation of terms: Cloud means so many things to so many it is almost meaningless. It's much more interesting to talk about PaaS or ITaaS or SaaS and their interrelations than throw out the "cloud" word willy nilly, though even these terms need better definition.
Trend 3: Federation will be the next hot space. Whether federation of resources across hybrid space or federation of security or federation of x, I predict that for the "cloud" to really accelerate, we must lower the friction of federation across just about all the core IT functions. Some bigger vendors are missing this as Billy Marshall points out here...
We are entering the next generation of IT infrastructure and we get to solve all of the old management problems over again, yeah for us!!!!
Ken
Trend 1: The Merging of Enterprise and Service Provider: For years, it's been talked about, but virtualization and "cloud" will accelerate this even more. The compute "grid" is pretty dang agnostic about location, Service providers will need to be more enterprisey and visa versa.
Trend 2: Disambiguation of terms: Cloud means so many things to so many it is almost meaningless. It's much more interesting to talk about PaaS or ITaaS or SaaS and their interrelations than throw out the "cloud" word willy nilly, though even these terms need better definition.
Trend 3: Federation will be the next hot space. Whether federation of resources across hybrid space or federation of security or federation of x, I predict that for the "cloud" to really accelerate, we must lower the friction of federation across just about all the core IT functions. Some bigger vendors are missing this as Billy Marshall points out here...
We are entering the next generation of IT infrastructure and we get to solve all of the old management problems over again, yeah for us!!!!
Ken
Thursday, June 18, 2009
Home sweet home...ideas come around again and again
After 8 days in Orlando, there is NO place like home...back to the real world and weather where you CAN be outside allday without drenching your clothes in sweat.
I saw Hunch launch, reminds me of an old shopping aide that AOL had, I don't remember what it was called, but it reminded me that there are no new ideas...just ideas whose time has come, or who changes her stripes
I first learned about Virtualization as part of MVS on IBM mainframes...now we virtualize PCs and servers
I used to try to sell emulation boards that made PCs look like dumbterminals...now we sell dumbterminals and make them look like PCs...
Wasn't delicious a lot like Backflip???
Remember GrandCentral? Check out mashery!!!
Every time the compute platform changes, new startups and tools emerge, then get gobbled up...is the cloud + virtualization one of these times? I think so...
Of course, some companies try to reinvent with these changes...any every succeed???
I saw Hunch launch, reminds me of an old shopping aide that AOL had, I don't remember what it was called, but it reminded me that there are no new ideas...just ideas whose time has come, or who changes her stripes
I first learned about Virtualization as part of MVS on IBM mainframes...now we virtualize PCs and servers
I used to try to sell emulation boards that made PCs look like dumbterminals...now we sell dumbterminals and make them look like PCs...
Wasn't delicious a lot like Backflip???
Remember GrandCentral? Check out mashery!!!
Every time the compute platform changes, new startups and tools emerge, then get gobbled up...is the cloud + virtualization one of these times? I think so...
Of course, some companies try to reinvent with these changes...any every succeed???
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