|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.
Compute virtualization has been transformational, yet security policy implementation and enforcement has lagged behind in agility and automation. There are a number of key considerations when implementing policy in private and hybrid clouds. In his session at 15th Cloud Expo, Holland Barry, VP of Technology at Catbird, will discuss the impact of this new paradigm and what organizations can do today to safely move to software-defined network and compute architectures, including: How normal ope...
Oct. 31, 2014 11:00 PM EDT Reads: 1,804
Can we look to the paradigm of cloud computing from a completely different perspective? In his General Session at 15th Cloud Expo, Gundars Kulups, Sales Director at DEAC, will discuss what we can learn from our dining habits when choosing a cloud solution. Gundars Kulups is Sales Director at DEAC, full service data center operator. An IT expert, he specializes in European countries and has worked in the IT industry since 1992. He graduated from Riga Technical University (RTU) in Latvia and com...
Oct. 31, 2014 10:00 PM EDT Reads: 965
SYS-CON Events announced today that SOA Software, an API management leader, 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. SOA Software is a leading provider of API Management and SOA Governance products that equip business to deliver APIs and SOA together to drive their company to meet its business strategy quickly and effectively. SOA Software’s technology helps businesses to accel...
Oct. 31, 2014 07:15 PM EDT Reads: 2,115
As cloud gives an opportunity to businesses to buy services externally - how is cloud impacting your customers? In his General Session at 15th Cloud Expo, Fabio Gori, Director of Worldwide Cloud Marketing at Cisco, will provide answers to big questions: Do you see hybrid cloud as where the world is going? What benefits does it bring? And how does Cisco connect all of these clouds? He will also tell us everything about Intercloud and Cisco investment on it.
Oct. 31, 2014 07:00 PM EDT Reads: 1,081
SYS-CON Events announced today that TMCnet has been named “Media 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. Technology Marketing Corporation (TMC) is the world's leading business to business and integrated marketing media company, servicing niche markets within the communications and technology industries.
Oct. 31, 2014 06:30 PM EDT Reads: 1,049
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, 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. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue bu...
Oct. 31, 2014 06:30 PM EDT Reads: 2,188
SYS-CON Events announced today that Parasoft 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. For 27 years, Parasoft has researched and developed software solutions that help organizations deliver defect-free software efficiently. By integrating Development Testing, API/cloud/SOA/composite app testing, and service virtualization, we reduce the time, effort, and cost of delivering secur...
Oct. 31, 2014 05:00 PM EDT Reads: 1,169
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at Internet of @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., will show what is needed to leverage the IoT to transform...
Oct. 31, 2014 04:00 PM EDT Reads: 1,619
SYS-CON Events announced today that Utimaco 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. Utimaco is a leading manufacturer of hardware based security solutions that provide the root of trust to keep cryptographic keys safe, secure critical digital infrastructures and protect high value data assets. Only Utimaco delivers a general-purpose hardware security module (HSM) as a customiz...
Oct. 31, 2014 03:00 PM EDT Reads: 1,972
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, will describe an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-devic...
Oct. 31, 2014 02:00 PM EDT Reads: 1,838
Until recently, many organizations required specialized departments to perform mapping and geospatial analysis, and they used Esri on-premise solutions for that work. In his session at 15th Cloud Expo, Dave Peters, author of the Esri Press book Building a GIS, System Architecture Design Strategies for Managers, will discuss how Esri has successfully included the cloud as a fully integrated SaaS expansion of the ArcGIS mapping platform. Organizations that have incorporated Esri cloud-based appl...
Oct. 31, 2014 01:30 PM EDT Reads: 2,180
Once the decision has been made to move part or all of a workload to the cloud, a methodology for selecting that workload needs to be established. How do you move to the cloud? What does the discovery, assessment and planning look like? What workloads make sense? Which cloud model makes sense for each workload? What are the considerations for how to select the right cloud model? And how does that fit in with the overall IT tranformation? In his session at 15th Cloud Expo, John Hatem, head of V...
Oct. 31, 2014 01:00 PM EDT Reads: 1,915
Dyn solutions are at the core of Internet Performance. Through traffic management, message management and performance assurance, Dyn is connecting people through the Internet and ensuring information gets where it needs to go, faster and more reliably than ever before. Founded in 2001 at WPI, Dyn’s global presence services more than four million enterprise, small business and personal customers.
Oct. 31, 2014 01:00 PM EDT Reads: 2,022
IBM and Tencent Cloud signed a business cooperation memorandum to collaborate on providing public cloud with Software-as-a-Service solutions for industries. Both parties agreed to focus on emerging small and medium enterprises in the smarter cities and smarter healthcare industries as well as other fields. This will enable these industries to utilize mobile, cloud computing and big data tools to transform internal processes and operations, thus achieving cloud transformation in the era of mobili...
Oct. 31, 2014 11:58 AM EDT Reads: 841
SimpleECM is the only platform to offer a powerful combination of enterprise content management (ECM) services, capture solutions, and third-party business services providing simplified integrations and workflow development for solution providers. SimpleECM is opening the market to businesses of all sizes by reinventing the delivery of ECM services. Our APIs make the development of ECM services simple with the use of familiar technologies for a frictionless integration directly into web applicat...
Oct. 31, 2014 11:00 AM EDT Reads: 2,001
European data center operator DEAC is the largest in the Baltics. The activities are orientated to provide data center services and IT outsourcing on Eurasia and America scale in order to create the primary or backup or additional data center for customer in the EU, to protect its business and, most importantly, reduce costs up to 40% within 3-5 years. DEAC is an IT outsourcing services and solutions company whose highly experienced and qualified employees offer various groups of services and...
Oct. 31, 2014 09:45 AM EDT Reads: 2,303
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 Internet of @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, will discuss 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! Speaker Bio: ...
Oct. 31, 2014 09:00 AM EDT Reads: 2,348
Samsung VP Jacopo Lenzi, who headed the company's recent SmartThings acquisition under the auspices of Samsung's Open Innovaction Center (OIC), answered a few questions we had about the deal. This interview was in conjunction with our interview with SmartThings CEO Alex Hawkinson. IoT Journal: SmartThings was developed in an open, standards-agnostic platform, and will now be part of Samsung's Open Innovation Center. Can you elaborate on your commitment to keep the platform open? Jacopo Lenzi: S...
Oct. 31, 2014 09:00 AM EDT Reads: 3,392
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo, moderated by Ashar Baig, Research ...
Oct. 31, 2014 09:00 AM EDT Reads: 1,419
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, will address the big issues involving these technologies and, more important, the results they will achieve. How important are public, private, and hybrid cloud to the enterprise? How does one define Big Data? And how is the IoT tying all this together?
Oct. 31, 2014 08:45 AM EDT Reads: 2,011