Monthly Archives: March 2012

Want to do cloud? You need to sell it, stupid

From a technology standpoint, cloud computing is the convergence of many beautiful things: Think SOA, governance, virtualization, The Web, data management and process automation. All running inside a lean machine, making the delivery of computing as easy as shopping in a mall.

However, building a cloud is one thing and making money out of it is another story. It’s not only about the infrastructure, is a lot more.

A successful and complete cloud stack has lots of moving parts, and most of them are software, not servers, storage and switches. It’s about your network provider and datacenter SLA, your ISO20000/270001 compliance, a decent chargeback and billing system, the applications or vApp templates you build and  a lot more stuff. It’s complex, with many stakeholders and at the end of the day, it’s not cheap to build. It resembles the eTOM model with a twist of ITIL. But if you manage to sell it, it’s a money making machine – either by slashing operating costs more than half or by generating revenue from your customers.

Now, who are you and to whom should you sell?

  • You are an enterprise or a large organization: If you have less than a  hundred internal users, forget it, otherwise, build your own private cloud. The benefits you will get from knowing who owns that IT resource, why, for how long and charging back the resource to the end user are too good to ignore and stick to a break and fix IT mentality.
  • You are a managed service provider/systems integrator: Building a public cloud is something you can do well; you know the technology and have the building blocks. But, to whom would you sell it? Most likely, you are already consuming private cloud services internally; finding external customers for public cloud services is easy, right? Wrong. Your business organization is set up to deliver vertical specialized services, but cannot do volume selling: Successful public clouds are built on customer volume and this is something you do not have (and do not know how to build up). What you can do is to go to your customers and sell your existing services porfolio in a cloudified form: Disaster recovery as a service and secure workload bursting are services you can deliver and successfuly market.
  • You are in the telco/service provider/web hosting business. Excellent, you know pretty well how to deal with lots and lots of customers. You know very well how to sell services in neat packaging. What you don’t know is how to build cloud services – this is the reason that Verizon, Sprint and others have long ago swallowed datacenter builders like Terremark and Savvis. However, public clouds fit very well in a service provider business model: Customer volume is there, charging/billing/provisioning are there, governance and compliance are there, datacenters and networking are in place. The technology stack bits and pieces are missing but they are easy to shop. What are the speedbumps? Telco strategists have known for decades how to market broadband, datapipes and voice. What they do not understand 100% is how to sell software, and cloud computing is, well, software.