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5 Strategies for Making Money with the Cloud

January 22, 2013 1 comment

Everybody is hearing Cloud Computing on the television now. Operators will store your contacts in the Cloud. Hosting companies will host your website in the Cloud. Others will store your photos in the Cloud.

However how do you make money with the Cloud?

The first thing is to forget about infrastructure and virtualization. If you are thinking that in 2013, the world needs more IaaS providers then you haven’t seen what is currently on offer (Amazon, Microsoft, Google, Rackspace, Joyent, Verizon/Terramark, IBM, HP, etc.).

So what are alternative strategies:

1) Rocket Internet SaaS Cloning

Your best hope is SaaS and PaaS. The best markets are non-English speaking markets. We have seen an explosion of SaaS in the USA but most have not made it to the rest of the world yet. Only some bigger SaaS solutions (Webex, GoToMeeting, Office 365, etc.)  and PaaS platforms (Salesforce, Workday, etc.) are available outside of the US and the UK. However most SaaS and PaaS solutions are currently still English-only. So the quickest solution to make some money is to just copy, translate and paste some successful English-only SaaS product. If you do not know how to copy dotcoms, take a look at how the Rocket Internet team is doing it. Of course you should always be open for those annoying problems everybody has that could use a new innovative solution and as such create your own SaaS.

2) SaaSification

During the gold rush, be the restaurant, hotel or tool shop. While everybody is looking for the SaaS gold, offer solutions that will save gold diggers time and money. SaaSification allows others to focus on building their SaaS business, not on reinventing for the millionth time a web page, web store, email server, search, CRM, monthly subscription billing, reporting, BI, etc. Instead of a “Use Shopify to create your online store”, it should be “Use <YOUR PRODUCT> to create a SaaS Business”.

3) Mobile & Cloud

Everybody is having, or at least thinking about buying, a Smartphone. However there are very few really good mobile services that fully exploit the Cloud. Yet I can get a shopping list app but most are just glorified to-do lists. None is recommending me where to go and buy based on current promotions and comparison with other buyers. None is helping me find products inside a large supermarket. None is learning from my shopping habits and suggesting items on the list. None is allowing me to take a number at the seafood queue. These are just examples for one mobile + cloud app. Think about any other field and you are sure to find great ideas.

4) Specialized IaaS

I mentioned it before, IaaS is already overcrowded but there is one exception: specialized IaaS. You can focus on specialized hardware, e.g. virtualized GPU, DSP, mobile ARM processors. On network virtualization like SDN and Openflow. Mobile and tablet virtualization. Embedded device virtualization. Machine Learning IaaS. Car Software virtualization.

5) Disruptive Innovations + Cloud

Selling disruptive innovations and offering them as Cloud services. Examples could be 3D printing services, wireless sensor networks / M2M, Big Data, Wearable Tech, Open Source Hardware, etc. The Cloud will lower your costs and give you a global elastically scalable solution.

Big Data 2013 Predictions

January 1, 2013 5 comments

If you just invested a lot of money in a Big Data solution from any of the traditional BI vendors (Teradata, IBM, Oracle, SAS, EMC, HP, etc.) then you are likely to see a sub-optimal ROI in 2013.

Several innovations will come in 2013 that will change the value of Big Data exponentially. Other technology innovations are just waiting for smart start-ups to put them into good use.

Real-Time Hadoop

The first major innovation will be Google’s Dremel-like solutions coming of age like Impala, Drill, etc. They will allow real-time queries on Big Data and be open source. So you will get a superior offering compared to what is currently available for free.

Cloud-Based Big Data Solutions

The absolute market leader is Amazon with EMR. Elastic Map Reduce is not so much about being able to run a Map Reduce operation in the Cloud but about paying for what you use and not more. The traditional BI vendors are still getting their head around a usage-based licensing for the Cloud. Except a lot of smart startups to come up with really innovative Big Data and Cloud solutions.

Big Data Appliances

You can buy some really expensive Big Data Appliances but also here disruptive players are likely to change the market. GPUs are relatively cheap. Stack them into servers and use something like Virtual OpenCL to make your own GPU virtualization cluster solution. These type of home-made GPU clusters are already being used for security Big Data related work.

Also expect more hardware vendors to pack mobile ARM processors into server boxes. Dell, HP, etc. are already doing it. Imagine the potential for Distributed Map Reduce.

Finally Parallella will put a 16-core supercomputer into everybody’s hands for $99. Their 2013 supercomputer challenge is definitely something to keep your eyes on. Their roadmap talks about 64 and 1000 core versions. If Adapteva can keep their promises and flood the market with Parallella’s then expect Parallella Clusters to be 2013 Big Data Appliance.

Distributed Machine Learning

Mahout is a cool project but Map Reduce might not be the best possible architecture to run iterative distributed backpropagation or any other machine learning algorithms. Jubatus looks promising. Also algorithm innovations like HogWild could really change the dynamics for efficient distributed machine learning. This space is definitely ready for more ground-breaking innovations in 2013.

Easier Big Data Tools

This is still a big white spot in the Open Source field. Having Open Source and easy to use drag-and-drop tools for Big Data Analytics would really excel the adoption. We already have some good commercial examples (Radoop = RapidMiner + Mahout, Tableau, Datameer, etc.) but we are missing good Open Source tools.

I am currently looking for new challenges so if you are active in the Big Data space and are looking for a knowledgable senior executive be sure to contact me at maarten at telruptive dot com.

Going from IaaS to SaaS is the wrong direction…

July 18, 2011 1 comment

Several operators are planning on launching Cloud Infrastructure-as-a-Service (IaaS) soon. Afterwards they want to launch SaaS and Telco SaaS (SaaS + Telecom assets) that run on top of their IaaS. Unfortunately this is doing things the wrong way around.

Since an operator spends millions on IaaS, CxOs want to see results. As such telecom managers are looking for applications and SaaS that can utilize this new IaaS. The problem is that operators are likely to spend again 4-6 months to launch a limited number of SaaS that are fully integrated into their complete backoffice system. This means that operators will be able to launch a limited set of SaaS by mid 2012 at very high APEX. Due to the limited number of services, operators are picking the “usual” suspects to launch, e.g. Microsoft 365.

What will happen in mid-2012?

Several European operators will launch their highly priced IaaS together with a limited number of similar SaaS services. The end result will be an oversupply of Microsoft and virtual servers with an immediate price pressure as a result. Enterprise customers will find local operators offering similar services as global IT players, e.g. IBM, HP, Fujitsu, etc. All will have good SLA promises to compete with the likes of Amazon and Rackspace, so at the end the lowest price will be the only selection criteria.

Another approach?

Operators should focus on launching SaaS and Telco SaaS first via open marketplaces. Operators should focus on building up a unique SaaS catalog that sets them apart from competition and builds an eco-system of customers and partners. The next step should be to open telecom assets and allow SaaS solutions to be extended into Telco SaaS. Only when operators see a clear winner in a niche or global marketplace, then they should talk to the supplier about becoming a strategic partner and to use the operator’s infrastructure to guarantee SLAs, etc.

Why?

The SaaS market is not mature yet. It is hard to pick winners because end-customers are only beginning to migrate towards SaaS. Most operators think that big names like Google and Microsoft are the only way of helping their end-customers move towards SaaS. However applying “Crossing the Chasm“, tells us that it would be better to be a big fish in a small pont first. Pick niche markets and specialized solutions that solve problems that currently are not addressed or generate new revenues that currently are not available. These niche products are easier to sell since they often involve a clear customer segment that will see a real problem solved. It will take time for end-customers to switch off their data centers and move everything to the cloud. These end-customers have established policies, IT-staff, etc. that will work against moving towards the cloud. By offering a solution that is substantially better then the current and offering a complete eco-system around a limited set of solutions, operators will be able to easily pursuade a well-defined group of companies to move parts of their operations towards the cloud. A final advantage is also that suppliers of niche products win most with the push of a large incumbant that has established relationships with all potential customers within a niche market. End-customers will not trust SmallABC.com but will trust LargeIncumbant offering the SmallABC solution. A Microsoft-like SaaS has its own name so LargeIncumbant’s 365 offering is not bringing end-customers any value.

Operators should focus on automating the onboarding of SaaS and offering quick and easy ways to over-the-top players to integrate telecom assets and become Telco SaaS providers and sell them via the operator’s open marketplaces. The only thing missing is to add Support 2.0 to the mix to have a telecom platform-as-a-service or Telco PaaS

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