Welcome!

Cloud Expo Authors: Yung Chou, Deborah Strickland, JP Morgenthal, Maureen O'Gara, John Cowan

Related Topics: Cloud Expo

Cloud Expo: Article

Four Ways to Profits for Data-Centered Cloud Computing Companies

How do you make money as a cloud computing company aside from the sale of compute capacity?

John Gannon's Blog

How do you make money as a datacenter-focused cloud computing company? Aside from the sale of compute capacity (a la Amazon or Rackspace), what are the other revenue opportunities available? Here are some thoughts...

1. Management tools: The cloud hosters like Amazon are providing basic management tools, but we can already see there is a proven market for higher-order management and automation provided by companies like Rightscale and 3Tera. There are also a variety of companies and products who have figured out IT automation in the traditional datacenter (Bladelogic, Opsware, etc). I’m waiting to see when they’ll start moving towards new product development (or rebranding of existing solutions) that will be focused on management of outsourced cloud environments. As their customers move to the cloud, those customers will demand that their traditional set of vendors move with them. However, I think (in the long term) that the management tool space will end up open source, with revenue generated through other means…

2. Virtual appliances: Virtual appliances are a method of distributing pre-packaged applications that run on top of a specialized (usually Linux-based) operating system. Perhaps the management tool vendors could sell virtual appliances to their userbase through an ‘iTunes‘-like interface. I also see value in virtual appliance solution stacks, where multiple virtual appliances are sold together and pre-configured to be integrated with one another. This would be particularly compelling for SMBs who don’t have the time or money to spend on heavy integrations between disparate software packages.

3. Cloud intelligence: There is going to be a tremendous amount of usage data generated as more computation and data is moved to the cloud. Cloud management tools that are working across multiple customers and multiple clouds will have a birdseye view of how companies are operating their cloud-based applications. That data could be monetized (if done in a privacy-friendly way) to help customers benchmark their usage of the cloud vs industry peers or to help vendors operating within the cloud learn more about how customers are using their products.

4. Services: Companies that have products or services that help customers determine how to best leverage cloud computing should be able to create healthy businesses. We saw a very broad services ecosystem develop around VMware technology and I think we’ll see the same thing occur in the cloud computing world. Because this sector is so hot and there are so many new products and services coming to market, there are few “experts,” and those experts will be able to demand a price premium.

[This appeared originally here and is republished in full by kind permission of the author.]

More Stories By John Gannon

John Gannon is an Associate at L Capital Partners, a $165-million fund looking to advance companies with the potential to take groundbreaking products to market. He blogs at http://johngannonblog.com. Prior to joining L Capital Partners, John worked with Highland Capital Partners and Chart Venture Partners to identify and evaluate new opportunities in the enterprise IT sector. He also served as a consultant advising startup companies on business development, product strategy and venture capital fundraising. He currently sit on the board of advisers of VAlign Software.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


Cloud Expo Breaking News
Why are APIs so important in clouds? Do APIs have to be open? How fast or slow will standardization in the cloud be? Why is ensuring high availability for the cloud service critical? In his session at the 10th International Cloud Expo, Mårten Mickos, CEO of Eucalyptus Systems, will answer these questions and address cloud standards, APIs and the critical question: Will we end up with one, two or more competing cloud standards? And, how will this affect the evolution and adoption of cloud comput...
Very few trends in IT have generated as much buzz as cloud computing. In his session at the 10th International Cloud Expo, Mark Hinkle, Director, Cloud Computing Community at Citrix, will cut through the hype and quickly clarify the ontology for cloud computing. The bulk of the conversation will focus on the open source software that can be used to build compute clouds (infrastructure-as-a-service) and the complementary open source management tools that can be combined to automate the management...
The proliferation of device connectivity is redefining the functionality requirements and capabilities of many embedded systems as more and more of these devices look to leverage the “Cloud.” While many commercial software and hardware component vendors have begun to realign their value propositions to satisfy growing demand, commercial-off-the-shelf products (COTS) alone cannot meet every OEM’s needs. As a result, the Embedded Cloud has injected a new level of uncertainty and a new competitive ...
Hardware and chemistry improvements will make the $1,000 human genome a reality soon. While the massive amount of genomics data that will be generated represents a huge opportunity to advance personal medicine, it also presents an enormous big data challenge. In his session at the 10th International Cloud Expo, Dr Andreas Sundquist, CEO of DNAnexus, will discuss how the cloud will address these issues by enabling the management, storage, sharing and analysis of the world’s DNA data and how it ...
With Cloud Expo 2012 New York (10th Cloud Expo) just four months away, what better time to start introducing you in greater detail to the distinguished individuals in our incredible Speaker Faculty for the technical and strategy sessions at the conference... We have technical and strategy sessions for you every day from June 11 through June 14 dealing with every nook and cranny of Cloud Computing and Big Data, but what of those who are presenting? Who are they, where do they work, what else h...
With Big Data Expo 2012 New York (co-located with 10th Cloud Expo) just four months away, what better time to start introducing you in greater detail to the distinguished individuals in our incredible Speaker Faculty for the technical and strategy sessions at the conference...
In 2011, Apache Hadoop received tremendous attention for helping organizations cost-effectively capitalize on their big data. Hadoop is now disrupting the business of analyzing data. In his session at the 10th International Cloud Expo, Eric Baldeschwieler, Co-Founder & CEO of Hortonworks, will look at the current state of the Hadoop project, lessons learned by deploying it at scale, and the roadmap for its future. Big Data Track attendees will learn about the exciting developments that have ...
The focus of Java EE 7 is on the cloud, and specifically it aims to bring Platform-as-a-Service providers and application developers together so that portable applications can be deployed on any cloud infrastructure and reap all its benefits in terms of scalability, elasticity, multitenancy, etc. The existing specifications in the platform such as JPA, Servlets, EJB, and others will be updated to meet these requirements. Java EE 7 continues the ease of development push that characterized prior ...
With Cloud Expo 2012 New York (10th Cloud Expo) just four months away, what better time to start introducing you in greater detail to the distinguished individuals in our incredible Speaker Faculty for the technical and strategy sessions at the conference... We have technical and strategy sessions for you every day from June 11 through June 14 dealing with every nook and cranny of Cloud Computing and Big Data, but what of those who are presenting? Who are they, where do they work, what else h...
With Cloud Expo 2012 New York (10th Cloud Expo) just four months away, what better time to start introducing you in greater detail to the distinguished individuals in our incredible Speaker Faculty for the technical and strategy sessions at the conference... We have technical and strategy sessions for you every day from June 11 through June 14 dealing with every nook and cranny of Cloud Computing and Big Data, but what of those who are presenting? Who are they, where do they work, what else h...