Welcome!

AJAX & REA Authors: Rajesh Lain, Sebastian Kruk, RealWire News Distribution, Harald Zeitlhofer

Related Topics: Cloud Expo

Cloud Expo: Opinion

As Cloud Models Emerge, Will FaceBob Emerge, Too?

Comparing B2B and B2C Companies Reveals Something Strange Going On

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.

More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

Cloud Expo Latest Stories
With the explosion of the cloud, more businesses are transitioning to a recurring revenue model to generate reliable sales, grow profits, and open new markets. This opportunity requires businesses to get to market quickly with the pricing and packaging options customers want. In addition, you will want to take advantage of the ensuing tidal wave of data to more effectively upsell, cross-sell and manage your customers. All of this is possible, but only with the right approach. At 15th Cloud Expo, Brendan O'Brien, Co-founder at Aria Systems and the inventor of cloud billing panelists, will lead a panel discussion on what it takes to launch and manage a successful recurring revenue business. The panelists will offer their insights about what each department will need to consider, from financial management to line of business and IT. The panelists will also offer examples from their success in recurring revenue with companies such as Audi, Constant Contact, Experian, Pitney-Bowes, Teleko...
Planning scalable environments isn't terribly difficult, but it does require a change of perspective. In his session at 15th Cloud Expo, Phil Jackson, Development Community Advocate for SoftLayer, will broaden your views to think on an Internet scale by dissecting a video publishing application built with The SoftLayer Platform, Message Queuing, Object Storage, and Drupal. By examining a scalable modular application build that can handle unpredictable traffic, attendees will able to grow your development arsenal and pick up a few strategies to apply to your own projects.
Come learn about what you need to consider when moving your data to the cloud. In her session at 15th Cloud Expo, Skyla Loomis, a Program Director of Cloudant Development at Cloudant, will discuss the security, performance, and operational implications of keeping your data on premise, moving it to the cloud, or taking a hybrid approach. She will use real customer examples to illustrate the tradeoffs, key decision points, and how to be successful with a cloud or hybrid cloud solution.
The cloud provides an easy onramp to building and deploying Big Data solutions. Transitioning from initial deployment to large-scale, highly performant operations may not be as easy. In his session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, will discuss the benefits, weaknesses, and performance characteristics of public and bare metal cloud deployments that can help you make the right decisions.
Over the last few years the healthcare ecosystem has revolved around innovations in Electronic Health Record (HER) based systems. This evolution has helped us achieve much desired interoperability. Now the focus is shifting to other equally important aspects – scalability and performance. While applying cloud computing environments to the EHR systems, a special consideration needs to be given to the cloud enablement of Veterans Health Information Systems and Technology Architecture (VistA), i.e., the largest single medical system in the United States.
Cloud and Big Data present unique dilemmas: embracing the benefits of these new technologies while maintaining the security of your organization’s assets. When an outside party owns, controls and manages your infrastructure and computational resources, how can you be assured that sensitive data remains private and secure? How do you best protect data in mixed use cloud and big data infrastructure sets? Can you still satisfy the full range of reporting, compliance and regulatory requirements? In his session at 15th Cloud Expo, Derek Tumulak, Vice President of Product Management at Vormetric, will discuss how to address data security in cloud and Big Data environments so that your organization isn’t next week’s data breach headline.
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Is your organization struggling to deal with skyrocketing volumes of digital assets? The amount of data is growing exponentially and organizations are having a hard time managing this growth. In his session at 15th Cloud Expo, Amar Kapadia, Senior Director of Open Cloud Strategy at Seagate, will walk through the essential considerations when developing a cloud storage strategy. In this discussion, you will understand the challenges IT is facing, why companies need to move to cloud, and how the right cloud model can help your business economically overcome the data struggle.
If cloud computing benefits are so clear, why have so few enterprises migrated their mission-critical apps? The answer is often inertia and FUD. No one ever got fired for not moving to the cloud – not yet. In his session at 15th Cloud Expo, Michael Hoch, SVP, Cloud Advisory Service at Virtustream, will discuss the six key steps to justify and execute your MCA cloud migration.
The 16th International Cloud Expo announces that its Call for Papers is now open. 16th International Cloud Expo, to be held June 9–11, 2015, at the Javits Center in New York City brings together Cloud Computing, APM, APIs, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
Most of today’s hardware manufacturers are building servers with at least one SATA Port, but not every systems engineer utilizes them. This is considered a loss in the game of maximizing potential storage space in a fixed unit. The SATADOM Series was created by Innodisk as a high-performance, small form factor boot drive with low power consumption to be plugged into the unused SATA port on your server board as an alternative to hard drive or USB boot-up. Built for 1U systems, this powerful device is smaller than a one dollar coin, and frees up otherwise dead space on your motherboard. To meet the requirements of tomorrow’s cloud hardware, Innodisk invested internal R&D resources to develop our SATA III series of products. The SATA III SATADOM boasts 500/180MBs R/W Speeds respectively, or double R/W Speed of SATA II products.
In today's application economy, enterprise organizations realize that it's their applications that are the heart and soul of their business. If their application users have a bad experience, their revenue and reputation are at stake. In his session at 15th Cloud Expo, Anand Akela, Senior Director of Product Marketing for Application Performance Management at CA Technologies, will discuss how a user-centric Application Performance Management solution can help inspire your users with every application transaction.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridstore delivers vmOptimized™ Storage that self-optimizes to each application or VM across both virtual and physical environments. Leveraging a grid architecture, Gridstore delivers the first end-to-end storage QoS to ensure the most important App or VM performance is never compromised. The storage grid, that uses Gridstore’s performance optimized nodes or capacity optimized nodes, starts with as few a...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, has been named “Bronze Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Cloudian is a Foster City, Calif.-based software company specializing in cloud storage. Cloudian HyperStore® is an S3-compatible cloud object storage platform that enables service providers and enterprises to build reliable, affordable and scalable hybrid cloud storage solutions. Cloudian actively partners with leading cloud computing environments including Amazon Web Services, Citrix Cloud Platform, Apache CloudStack, OpenStack and the vast ecosystem of S3 compatible tools and applications. Cloudian's customers include Vodafone, Nextel, NTT, Nifty, and LunaCloud. The company has additional offices in China and Japan.
SYS-CON Events announced today that TechXtend (formerly Programmer’s Paradise), a leading value-added provider of server and storage virtualization, and r-evolution will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. TechXtend (formerly Programmer’s Paradise) is a leading value-added provider of software, systems and solutions for corporations, government organizations, and academic institutions across the United States and Canada. TechXtend is the Exclusive Reseller in the United States for r-evolution