Wednesday, March 2, 2011

Opportunities and Obstacles for Cloud Entrepreneurs

John Cowan, CEO of 6Fusion

Cloud computing is defined by the NIST as “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

This concept is at the very root of almost every innovation cycle for technologies geared toward data center operations.

The advent of the client/server era spawned unprecedented growth in employee productivity as well as systems integration and management.  Titans of industry leveraged massive purchasing power to use this technology to create competitive advantages in the market.  The cloud is shifting the balance of power and changing the landscape of the ‘applied technology for competitive differentiation’ equation.  Much like the internet made vast amounts of data available to common users, the Cloud is making massive computing infrastructure, at affordable rates, available at the whim of anyone, business or personal consumer, that needs to access it to support or grow their business operations.   

According to 451 Group, the results of their latest survey data show that “about 65% of respondents suggested that they will adopt a SaaS offering within the next 12 months. The same survey showed that slightly more than 60% of respondents suggested that they would adopt an IaaS offering within the next 12 months.”  If truly materialized cloud-computing stands to alter forever the dynamics for how we apply technology to either drive our top line or improve our bottom line.   

Herein lies the big gap in the market – and thus the opportunity for aspiring or savvy entrepreneurs thinking about the cloud:  Taking the promise of what the cloud represents and turning it into strategic and tactical execution.

In a complex maze of customer problems, political issues and legal wrangling this is much easier said than done.  Add to this that the sales process for any nascent market like the cloud can be double or triple that of more mature industries and it can become very easy for entrepreneurs to fall into endless traps (or Rabbit Holes, as we often call them) chasing business that never really materializes.  This can cripple a budding start up.  

My business partner and I started a company called 6fusion a few years ago to develop technology for the IaaS cloud market.  For the first couple years we learned very hard lessons about introducing “innovative” technology to the business world – and we’ve managed to survive long enough to tell the story!   

I would like to share the most valuable lesson we’ve learned and what I would deem sage advice for any would-be innovators looking to take on the cloud market:  
In order to succeed in this fascinating new world of IT delivery entrepreneurs must not only focus on innovation and ideas.  They must focus on the application of ideas and innovation to do one of two things regardless of whom the consumer audience happens to be:

1)  Demonstrate how your technology makes it possible for your target audience to increase it’s top line revenue at a disproportionate rate to overhead
2)  Demonstrate how your technology can make a material impact to improve the bottom line for your target audience

It’s not always easy to simplify complex technology and systems.  And the exercise of evaluating your own ideas and concepts under this kind of microscope can some times be unnerving.  But by boiling down our operating objectives to these two simple edicts we have had a profound impact on not only the way we think about new ideas and innovation at our company, which has translated into a much more focused and manageable commercial effort.    

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