A vision about clouds

In: Entrepreneurship / 3 comments

23 Feb 2010

A friend was asking me the other day what businesses I thought will make the difference in the following years in the software/internet area. So I would like to talk about an expression that is trendy these days: „in the cloud”:

What’s with these clouds? Why „in the cloud” and not „Web 2.0”? Or „SaaS”? Or „Software + Services”? All of these are „buzz-words”, clichés that sound good because they represent the new „internet bubble”. Big businesses – I would even say huge – are inflated around it and that’s where the opportunities in the following years may come from. If we put aside Web 2.0, which most of all suggests social networks (Facebook, MySpace, Hi5, Twitter…) all the others are mainly the same, in the view of the different software Goliaths. That’s because Microsoft (the most important creator of acronyms) couldn’t use the SaaS (Software as a Service) concept promoted especially by IBM; so they created S+S (Software + Service), which actually suits them better. And since all of this has been happening “somewhere”, then they were all gathered under the so-called „in the cloud” umbrella.

OK, all these words and concepts have been spinning around us for 10 years, so you might ask me what got into me; am I trying to invent the wheel here or something. But only for half a year or so, things really started happening. And I am convinced that in the next 5 years we will find ourselves in a business based on “in the cloud” hosting. And so, starting from this assumption, let’s see what the opportunities are (without a special order of preference):

1. You can become a „host”. Meaning that you can have a sort of portal where people can come and receive all kinds of applications, one more business-like than the next – email, erp, crm, file sharing etc… You have two alternatives for this – do things from scratch (contracts with the companies that produce applications, contracts with data centers, hardware, administration, technology etc.) or, simpler than that, you can resell (white-label) a big host’s product (most probably from the States…). And, in this case, the only thing that interests you is promoting your own website.

2. Then I think all these hosts will need applications prepared for this model. And if the big producers of classic software won’t make the switch, smaller newcomers on the market might beat the gun and come out first. Just as salesforce.com (though new to the market) surpassed Siebel, the inventor of CRM, by miles. This might be the place where a shrewd newcomer could use a few shortcuts…

3. Automatic tools that allow the host to supply the same technology (white-label) to the reseller will also have to be built. This is a huge technological challenge and a challenge from the point of view of vision, but the next big money from IT might just come from this direction. For the time being, there are only two companies/products that do something in this area – plesk (from parallels, ex swsoft, Serghei Beloussov’s company – a great visionary in this field) and cpanel (from cpanel inc). Proof of this huge potential market is the fact that HP (that doesn’t enter a new business unless there is a potential 5B$ there), announced in December that in March it’ll launch a similar product. And I know another 3 or 4 big companies that are working in the same area. There are still many unfinished problems; for instance, the issue of the settlement between the different licensing models of apps producers and the host’s unique licensing model to the final customer.

4. And since everything will have to bear the weight of a huge volume of data, the famous grid computing is back with a vengeance. An honest / commercial solution through which a host can treat huge volumes of data in very large server farms will have to appear soon. For the moment, only Google has a viable solution – in-house, Amazon is toying with something but it still has a long way to go. VMWare is well positioned from a technological point of view, but doesn’t seem to understand the opportunity (or it still has a lot to draw from the business it feels comfortable in).

And let’s also look at the existing players on the market – I think everything spins around Google, Amazon and eBay/PayPal, each one coming with a different perspective. Microsoft and Apple are also sitting in the queue, but they kind of missed the start (although Apple is going strong in the mobile phone department and they have a huge opportunity here. Let’s see the famous Windows Phone 7, as well as the iPhone4G reply). There will be lots of money to be made by companies around these players, companies that will find interesting technologies to develop. That’s because there is already fierce competition between the big ones and they will always have the “build or buy” dilemma, especially related to time to market.

So, good luck in business 🙂

(English version by Teodora Popescu)

Original Romanian version

Viziune despre nori

Ma intreba zilele trecute un prieten despre ce businessuri cred eu ca vor face diferenta in urmatorii ani, in zona software/internet. Si as povesti un pic despre o expresie foarte la moda: „in the cloud”:

Ce e cu norii astia? De ce „in the cloud” si nu „Web 2.0”? Sau „SaaS”? Sau „Software + Services”? Toate astea sunt „buzz-words”, clisee care dau bine pentru ca reprezinta noua „bula” internet. In jurul lor se umfla business-uri mari – as spune imense – si de acolo probabil ca vin oportunitatile anilor viitori. Daca dam la o parte Web 2.0, care are in special conotatia retelelor sociale (Facebook, MySpace, Hi5, Twitter…) toate celelalte sunt in mare acelasi lucru, in viziunea diferitilor Goliati software. Caci Microsoft (cel mai mare creator de acronime) nu putea sa foloseasca conceptul SaaS (Software as a Service) promovat mai ales de IBM; asa ca a creat S+S (Software + Service ), care chiar i se potriveste mai bine. Si cum toate astea se intampla „undeva”, atunci s-au adunat sub umbrela „in the cloud”.

OK, toate aceste cuvinte si concepte se invart in jurul nostru de vreo 10 ani, puteti sa spuneti ca m-am trezit si eu acum sa inventez apa calda. Dar abia in ultima jumatate de an au inceput pe bune sa se intample. Si am capatat convingerea ca in urmatorii 5 ani ne vom regasi intr-un business bazat pe hostare „in the cloud”. Si atunci, plecand de la aceasta presupunere, hai sa vedem care sunt oportunitatile (fara o ordine speciala a preferintelor):

1. Sa te faci „hoster”. Adica sa ai un soi de portal pe care sa vina lumea si sa primeasca tot felul de aplicatii, care mai de care mai de business – mail, erp, crm, file sharing, etc… Ai doua alternative pentru asta – sa faci lucrurile de la zero (contracte cu companiile producatoare de aplicatii, contracte cu data centers, hardware, gestiune, tehnologie, etc) sau, mai simplut, sa faci revanzare (whitelabel) a unui produs al unui hoster mare (probabil din state…). Si atunci singurul lucru care te intereseaza este promovarea sitului propriu.

2. Apoi ma gandesc ca toti acesti hosteri vor avea nevoie de aplicatii pregatite pentru acest model. Si daca marii producatori de software clasic nu vor face mutarea, este posibil ca niste mici producatori nou veniti in piata sa le fure startul. Asa cum salesforce.com a intrecut (desi e mai nou in piata) la greu Siebel, inventatorul CRMului. Asta poate fi un loc in care un nou venit ager poate sa foloseasca ceva scurtaturi…

3. La nivelul hosterului, aplicatiile vor trebui ambalate intr-un produs si integrate intr-un sistem de billing. Vor trebui de asemenea construite instrumente automate care sa permita hosterului sa furnizeze aceeasi tehnologie (whitelabel) revanzatorilor. Asta este un imens challenge tehnologic si de viziune si este probabil ca de aici sa vina urmatorii bani multi in IT. Deocamdata exista doar doua firme/produse care sa faca ceva in directia asta – plesk (de la parallels, fost swsoft, compania lui Serghei Beloussov – mare vizionar in zona) si cpanel (de la cpanel inc). Dovada a imensei piete potentiale este faptul ca HP (care nu intra intr-un business nou daca nu este potential de 5B$ acolo), a anuntat in decembrie ca in martie va lansa un produs similar. Si mai stiu inca 3-4 companii mari care lucreaza in zona. Insa sunt multe probleme nerezolvate; de exemplu problema settlement-ului intre diferitele modele de licentiere ale producatorilor de aplicatii si modelul unic de licentiere al hosterului catre clientul final.

4. Si pentru ca totul va trebui sa poarte pe umeri un volum imens de date, vestitul grid computing se intoarce si se razbuna. Va trebui sa apara cat de curand o solutie onesta / comerciala prin care un hoster sa poata trata volume imense de date in ferme foarte mari de servere. Deocamdata doar Google are o solutie viabila – inhouse, Amazon cocheteaza cu ceva dar mai are de munca. VMWare e pozitionat destul de bine tehnologic, dar pare sa nu inteleaga oportunitatea (sau mai are inca de muls in businessul in care se simte confortabil).

Ca sa ne uitam si la jucatorii existenti, cred ca lucrurile se invart intre Google, Amazon si eBay/Paypal, fiecare venind din alta perspectiva. Mai stau la coada Microsoft si Apple, dar au cam pierdut startul (desi Apple trage tare cu mobilele si are aici o sansa imensa. Sa vedem si ce-i cu vestitul Windows Phone 7, precum si raspunsul iPhone 4G). Pe langa ei vor fi multi bani de facut de catre companii care vor gasi tehnologii interesante de dezvoltat. Caci intre cei mari este deja o cursa acerba, si vor avea mereu dilema „build or buy”, mai ales legata de cat de repede pot ajunge in piata (time to market).

Deci, bafta la business 🙂




February 23rd, 2010 at 2:35 pm

Nu tot ce e software merita pus in nor. D-aia folosim (noi astia de la Microsoft) S+S, fiindcă e mult mai aproape de realitate.

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