|By Roger Strukhoff||
|February 25, 2011 08:17 AM EST||
Two broad types of business are emerging in the Cloud Era. They follow the traditional, dueling business models found in B2B vs. B2C companies--General Electric selling nuclear power plants vs. Wrigley earning its money a nickel at a time, for example.
Today, it's Salesforce.com and VMWare in the B2B corner, and Facebook representing B2C.
Salesforce.com is on its way to being the first $2 billion Enterprise Cloud Computing company, according to CEO Marc Benioff. Salesforce reported a record revenue for Q4 2010 of $457 million, up 29% year over year.
Benioff pointed out that it took the company a decade to reach its first $1 billion in sales, yet plans to achieve a $2 billion annual run rate less than three years later.
Meanwhile, VMWare reported $2.9 billion in revenue for 2010. About 30% of WMWare's stock is owned by EMC, but it's still an independent company. As most people would consider VMWare an Enterprise Cloud Computing company, perhaps Marc should add the word "application" into his statement about Salesforce.
The Eyes Have It
That aside, probably 80% of the attention given to pure Enterprise Cloud software companies is given to Salesforce and VMWare. Are they really that exciting? One of them simply a modern-day Willy Loman, the other a classic geek. Try to explain what VMWare does to a lay person, and eyes will glaze over quickly. Explain Salesforce, and those eyes will roll.
The two companies have combined annual revenues approaching $5 billion, and a combined worth of about $50 billion. Pretty impressive for companies of this size to be worth 10X their annual revenue in this day and age. Their worth is comparable to the output of a small Latin American or European country.
Compare that Facebook, which has the same valuation with about one-sixth the revenue. Sure, Facebook is not a public company, so its revenue is an estimate and its valuation based solely on recent investors. Those investors are very serious investors, so the crazy valuation number must stand for now.
Look at the Customers
How long will that crazy number stand? Let's take a look at the customer bases.
Salesforce was happy to report that it now has 92,300 customers worldwide, up 27% from a year ago. VMWare reports 190,000 customers, including all Fortune 100 companies, 491 of the Fortune 500, 95 of the German DAX 100, and all of France's CAC 40.
Facebook doesn't care about any of that as it keeps growing steadily beyond the 600 million members it already has in who knows how many countries.
A little fun with numbers shows that Salesforce and VMWare pry an average of about $17,000 from each of their customers, while Facebook yields about $1.33 from each of its members.
The $17,000 sounds low for enterprise software companies, and no doubt reflects a number of small, pilot-project type deals, many of which may have been made to fill out an impressive client roster.
Facebook's buck-plus-change figure is in line with the reported revenue-per-reader of another popular Cloud-era site, the Huffington Post (recently purchased by AOL).
Yesterday and Today
Salesforce and VMWare shouldn't really be compared with one another. But this early in the Cloud Era, they're the standouts. It seemed very odd to compare Microsoft with VisiCalc (let alone IBM) at the dawn of the PC era, too, before it became clear what Redmond really had in mind.
We're at a similar historical point with Cloud today. The consumer businesses behind built behind the Apple iPhone & iPad could eclipse Cloud B2B revenues very soon. Meanwhile, where are all the cool new Cloud B2B companies? (Hint: a lot of them will be at Cloud Expo in New York June 6-9.)
Yet there's something very strange going on today that wasn't part of those early PC days; Facebook earns its revenue through advertising generated by clickthrough rates on the order of 0.05%.
Who knew 30 years ago that some day you could conquer the world by having 99.95% of your potential buyers ignoring what you are selling?
For its part, Microsoft has been competing in both corners of the Cloud-era marketplace, whether promoting MSN and trying to buy Yahoo, developing Azure another, launching Bing, or migrating Office (slowly) to the Cloud. As a social media play, maybe Microsoft Bob can be resurrected as FaceBob some day.
Eighty-five percent of companies store information in some sort of unstructured manner. In this demo at 15th Cloud Expo, Mark Fronczak, Product Manager at Solgenia, discussed their enterprise content management solution, which was created to help companies organize and take control of their digital assets.
Jan. 30, 2015 11:30 AM EST Reads: 2,916
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
Jan. 30, 2015 11:30 AM EST Reads: 3,638
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
Jan. 30, 2015 11:30 AM EST Reads: 4,869
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...
Jan. 30, 2015 11:15 AM EST Reads: 3,812
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
Jan. 30, 2015 11:15 AM EST Reads: 4,079
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Jan. 30, 2015 11:00 AM EST Reads: 4,832
DevOps is all about agility. However, you don't want to be on a high-speed bus to nowhere. The right DevOps approach controls velocity with a tight feedback loop that not only consists of operational data but also incorporates business context. With a business context in the decision making, the right business priorities are incorporated, which results in a higher value creation. In his session at DevOps Summit, Todd Rader, Solutions Architect at AppDynamics, discussed key monitoring techniques...
Jan. 30, 2015 11:00 AM EST Reads: 4,361
“We are strong believers in the DevOps movement and our staff has been doing DevOps for large enterprise environments for a number of years. The solution that we build is intended to allow DevOps teams to do security at the speed of DevOps," explained Justin Lundy, Founder & CTO of Evident.io, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 30, 2015 11:00 AM EST Reads: 3,455
Building low-cost wearable devices can enhance the quality of our lives. In his session at Internet of @ThingsExpo, Sai Yamanoor, Embedded Software Engineer at Altschool, provided an example of putting together a small keychain within a $50 budget that educates the user about the air quality in their surroundings. He also provided examples such as building a wearable device that provides transit or recreational information. He then reviewed the resources available to build wearable devices at ...
Jan. 30, 2015 11:00 AM EST Reads: 3,833
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
Jan. 30, 2015 10:45 AM EST Reads: 4,671
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
Jan. 30, 2015 10:45 AM EST Reads: 4,328
Mobile commerce traffic is surpassing desktop, yet less than 20% of sales in the U.S. are mobile commerce sales. In his session at 15th Cloud Expo, Dan Franklin, Segment Manager, Commerce, at Verizon Digital Media Services, defined mobile devices and discussed how next generation means simplification. It means taking your digital content and turning it into instantly gratifying experiences.
Jan. 30, 2015 10:45 AM EST Reads: 3,605
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core...
Jan. 30, 2015 10:30 AM EST Reads: 4,054
CloudBees, Inc., has announced a $23.5 million financing round, led by longtime CloudBees investor Lightspeed Venture Partners. Existing investors Matrix Partners, Verizon Ventures and Blue Cloud Ventures also participated in the round. The latest funding announcement follows earlier rounds of $4 million, $10.5 million and $10.8 million, bringing the total investment in CloudBees to just under $50 million since the company’s inception in 2010. Previous venture investment rounds were led by Ma...
Jan. 30, 2015 10:15 AM EST Reads: 566
NuoDB just introduced the Swifts 2.1 Release. In this demo at 15th Cloud Expo, Seth Proctor, CTO of NuoDB, Inc., discussed why scaling databases in the cloud is challenging, why building your application on top of the infrastructure that is designed with this in mind makes a difference, and what you can do with NuoDB that simplifies your programming model, your operations model.
Jan. 30, 2015 10:15 AM EST Reads: 2,554
CA Technologies released a new study – “DevOps: The Worst-Kept Secret to Winning in the Application Economy” – that reveals that 82% of enterprises in Asia Pacific and Japan (APJ) already have or plan to adopt a DevOps strategy, a 12 point increase from last year’s figure of 70%. DevOps is a methodology which helps foster collaboration between the teams that create and test applications (Dev) with those that maintain them in production environments (Ops). Vanson Bourne conducted the survey with...
Jan. 30, 2015 10:15 AM EST Reads: 637
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps,...
Jan. 30, 2015 10:00 AM EST Reads: 4,627
“The year of the cloud – we have no idea when it's really happening but we think it's happening now. For those technology providers like Zentera that are helping enterprises move to the cloud - it's been fun to watch," noted Mike Loftus, VP Product Management and Marketing at Zentera Systems, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 30, 2015 10:00 AM EST Reads: 3,657
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. Acco...
Jan. 30, 2015 10:00 AM EST Reads: 4,993