Can one of the big boys ‘make’ the cloud market

I caught myself yesterday making the statement, that should one of the really big companies enter the cloud computing market they could literally make the market.  By this statement i meant that with all of the sales & marketing resources at the disposal, could one company accelerate the growth of the cloud computing market and physically grow it. (against what is a good question given my thoughts on market analysts).

Yesterday Microsoft announced it was going to finally going to deliver Office via browser (others call that SaaS but they do things their own way). So the question is, with its enormous marketing budget, market clout and channel could Microsoft (insert IBM,  HP-EDS) make the cloud market? Could a  regional Telco, like BT  (who has bought into the cloud vision) , with its reach and sales channels make the cloud market in the UK?

I think this can happen. I genuinely believe that a large company could cause this type or market distortation. To me there is some evidence of this, I’m told subprime mortgages didn’t exist 5 years ago for instance….bad topic but a clear example. MP3 music players – iPod anyone?  

let the battle begin

I've installed another comments component.I'm looking forward to seeing if allows me to manage the spam commenting in a better way. My time in the IT security business has taught me that really, with any solution (single tier), it is only a matter of time before they get bypassed for another attack vector.

 In some ways the IT security market is a perfect market. Its a classic arms race, goods versus evil, defenders and attackers…. 

I must admit to harboring some doubts. The battle in IT security is kind of at a balance point, but that's at the expense of a ever growing proportion of IT budgets. My previous component was GNU licensed so…. under resourced, an arms race by its very nature requires continual investment. Interesting micro-insight into what you get with freeware? perhaps

I’ve had to remove the comments module

Due to an increasing amount of spam comments, i've chosen to disable the comments feature on this blog. I apologise to those who legitimately had something to say. I always valued the input, and it was great to know my thoughts were being read

 

I will search for another component to replace this one. Anyone out there know of a joomla component that allows you to block this sort of behavior drop me a line.

 Cheers

 

Zoho – another approach to sustainable growth

Phil Wainewright put up a very thought provoking post this morning, speculating if Zoho could outgrow Salesforce.com. A worthwhile read, the stand out bit being his summation.

 

A disruptive model? Just as Salesforce.com’s CEO Marc Benioff dismisses conventional software vendors such as Oracle and SAP as dinosaurs on the verge of extinction, so Vembu looks on Salesforce.com’s high-cost, premium-priced model (in comparison to Zoho’s) as a throwback to the days of old-fashioned enterprise software.…. Meanwhile, Zoho’s decision not to turn to advertising as a source of revenue is also appropriate for the business market and a useful differentiator against Google, the other big player making headway in that mass SMB sector. On balance, Zoho’s model offers enough value to an underserved market to qualify as disruptive and its state of preparedness for a difficult economic environment could well see it emerge the other side of the coming recession as a leading player.

This got me to thinking. So far most of the we dialogue on financial models has been based around a number of streams

  • Freemium models seem to be getting the most coverage, facebook.com is an example. I was never that impressed (Ben Kepes has a good piece here on why), with the credit crunch i’m even less inclined to believe in this and tbh i’d be amazed to see this one survive in any meaningful way.
  • Advertising supported  – Google is the poster child
  • Traditional pay as you go models – Salesforce.com

There is another way to get scale, then monetise internet assets, funnily enough it’s a variant on the Google model and its being used by Zoho.This approach is to use an existing revenue engine to fund the growth of the start-up, in Zoho case its Adventnet who are funding Zoho.The interesting dynamic here is the financial impacts. No credit you see, organic growth but with no debt. I don’t believe people fully understand the economics at play here. The scale challenges a startup have to conquer are enormous, but when you get there your marginal costs plummet and accordingly your profits go up.  Check this from Zoho. Google and Microsoft have clearly reached scale (in their own markets), Salesforce.com hasn’t… yet. I’m told that their PaaS play is starting to really reap benefits, huge customers signing up, customers putting Tb’s of Data thru a day. All driving EoS.

Back to Zoho, the more i look at it, the more i like the model. Self fund to scale, charge for premium services, consider a slow introduction of pay as you go later (i’d put in an easy migration path for those who aren’t ever going to pay). And keep in scaling. Its Amazon’s mantra all over again, ‘GBF’ “Get Big Fast”, but without the debt and a fairly logical path to monetisation.