Subba’s Serendipitous moments

February 18, 2009

Microsoft, hurry up!

Filed under: Business,Competition,Model — Subbaraman Iyer @ 11:00 pm
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The cloud computing battle is being fought on multiple fronts including creating some confusion in everyone’s minds. It is no longer being considered a niche and the next 12-18 months will see it become mainstream.

IBM has increasingly become aggressive and has teamed up with Amazon Web services to deliver its software.

While Amazon had deals with players like, OpenSolaris, MySQL, RedHat, this deal with IBM is significant because it gives Amazon the clout and respectability for the enterprise.

The interesting question is what happens to Microsoft? Microsoft announced Azure which I referred to here, but didn’t put in any aggressive plans to pursue this with a backward cloud model. Perhaps Microsoft will offer a Cloud OS sometime in the future.

With this deal, Microsoft would be left with no choice but to adopt the cloud model quickly and aggressively across all its software product range. The other key decision that Microsoft would have to make is if the Microsoft cloud can connect to the rest of the clouds be it Google, or Amazon or other private cloud.

IBM will also have a significant advantage as it can drive more cloud economics — hardware, storage, infrastructure software and other applications and can build completely new pricing models to gain market leadership.

Microsoft cannot afford to lose any more time. Microsoft has to rally with its developers and close the gap.

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September 10, 2008

Cloud is confusing!

Filed under: Business,Model — Subbaraman Iyer @ 2:40 pm
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“Cloud computing” has been a buzzword and it means different things to different people. What started as the ASP in the early part of the decade, morphed to Utility computing and now everything is “Cloud computing”.

Generically speaking, the tern “cloud computing” is just an alternate  solution that doesn’t use the in-house data centre or any vendor specific hosting resource. It is a virtual huge infrastructure where both computing and storage resource is available on a pay-as-you-go on-demand basis. The compelling benefit is in its scalability  and the ability to access an application anywhere. There are clearly 2 distinct layers in the cloud:

Infrastructure: Amazon Web services is the poster child offering both computing and storage resources with a simple API interface. It has been a tremendous success gauged by the fact that Amazon’s EC2 and S3 in Q4 2007 exceeded all of Amazon’s web properties during its own peak time. See the impressive evidence here.

Platform: Google’s AppEngine and a few other platforms offer a development environment where the developer adheres to certain guidelines and the scaling is performed by the platform.

However Forrester in their latest report have expanded the definition of the “cloud computing” and in the process have even made the definition even foggier.

Clearly Software as a service and Web services cannot be considered as part of a cloud since the former is a specific end user software with a specific functionality focus. They outgrew from the traditional world of the application service provider hosted and are the least flexible. The Web services world again is a specific application for an organization.

If one takes the factors flexibility, scalability, ubiquity as the cornerstones of cloud computing, I fail to understand how SaaS or Web services or even App components-as-a-service become part of the cloud.

In my view it is only the bottom 3 layers that constitute the cloud. I would like to view the Cloud as just another way the IT infrastructure is being delivered and consumed.

I am just waiting to see how the other analysts define the cloud.

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April 25, 2008

Management lessons from Jeff Bezos

Of the many CEOs that I hold in awe and respect Jeff Bezos is very high on the list. It is not that he has become successful and continues to remain the poster child of the Internet economy when other stars from the dot com era have either faded away or have been just one trick pony. The few things that amazes me are:

How Jeff continuously proved all the skeptics in the Wall Street and outside observers continuously wrong by being true to his vision, values and strategies.

How he managed to scale the company from selling books to groceries and everything in between and become the world’s largest E-tailer.

How he turned conventional wisdom on its head by combining and integrating 3 widely different customer value disciplines: operational excellence, customer intimacy and product leadership constantly when it is generally believed and recommended by Michael Tracy and Fred Wiersema in their book: The Discipline of Market Leaders.

How he has managed to not just radically alter business models and paradigms around retailing, but also transformed his company from a retailing firm to a high technology firm through continuous innovation.

Finally how he has turned conventional thinking on advertising, innovation and customer service on its head and created new approaches.

Well, a lot could be said of him, but I would just limit myself to some of the management nuggets that’s worth considering:

The right way to build a brand is by delivering great service.

We ( take those funds that might otherwise be used to shout about our service and put that into customer service.

We work hard being customer-obsessed and expressing it through innovation

Our two very strong cultural attributes are innovation and customer obsession.

Frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.

Companies get skills-focused, instead of customer-needs focused. When [companies] think about extending their business into some new area, the first question is “why should we do that—we don’t have any skills in that area.

I’ll tell people that if the stock is up 30% this month, please don’t feel you are 30% smarter. Because when the stock is down 30% a month from now, it’s not going to feel that good to feel 30% dumber.

I’ve taken plenty of criticism, but it’s always been about our stock price and never about our customer experience. After the bubble burst, I would sit down with our harshest critics, and at the end of the meeting they would say, “I’m a huge customer.” You know that when your harshest critics are among your best customers, you can’t be doing that badly.

For the full interview where he discusses his views on branding and his approach to branding see here and here.

Not many people know that’s Web services is considered the industry benchmark. Jeff virtually invented cloud computing with his Elastic compute cloud EC2 and storage services S3 services offering giving thousands of developers a scalable infrastructure at perhaps the cheapest price on the planet. To see how he explains the offerings and the candid way he handles all the Q&A, see his lecture that he gave at MIT recently.

His latest innovation — the Kindle a e-book reader priced at $400. The sweetener is that it comes with free wireless broadband which is unprecedented in the industry so as to facilitate instant download. His vision — to have every printed book on earth available for instant download and at a price that cost less than half of what printed books would cost. Compelling and daring — the typical Amazon way. Guess, the Kindle is out to revolutionize our reading habit as much as the ipod did to listening music.

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