|By Andy Mulholland||
|November 25, 2008 03:15 AM EST||
Andy Mulholland's CTO Blog
‘Complementary’ models are an integral part of Cloud Computing...
I have wondered for most of the last couple of years just how long ‘free’, meaning paid for by advertising, services on the web could go on for, and with a recession looming this seems to be the time that this could get cut back. However when I look into this a little more carefully I find that my impression of ‘free’ as a business model supported by advertising is perhaps already out of date as the successful players have used ‘free’ to reach either ‘freemium’ or ‘complementary’ models. Even more interesting it would seem that the ‘complementary’ models are an integral part of Cloud Computing.
Let’s start with ‘freemium’ as a business model, meaning give something away for free to create a market and demand, then charging those who are looking for more than the basic service. Adobe would be the grand daddy of this to me, just look at Flash, or PDF, to see what ‘free’ downloads have done to create a global market standardised around your technology, then consider what this has created in terms of a ‘locked in proprietary’ market for their professional products. Am I complaining? Well, no I am not, as in general I reckon we are all the beneficiaries of Adobe using the ‘freemium’ model. At one end as consumers and at the other by being able to build documents and graphics that we know people will be able to consume. In short ‘freemium’ models work when the balance is set to win- win.
The challenge is exactly how many areas can this work in? I mean is there an indefinite number of consumer end additions that a reasonable number of us are going to want? Take a look at Silicon Alley where they have compiled a list of companies who are working the ‘freemium’ model, try and see how many you are tempted to download from because it seems to offer reasonable value to you as a user. As this piece comments the interesting thing is some of the best known success stories such as Flickr and LinkedIn started as advertising supported and migrated into ‘freemium’ funding so perhaps I am thinking about this into too narrow a way and the model can apply more broadly to sites and services too.
However the real money, both as an investment to get started and in terms of potential to build an unassailable position, belongs with the ‘complementary’ model, and there is no finer example of this than Google. Hang on a minute is not Google the absolute best example of advertising funding? Yes it is, but the Google franchise runs wider and deep these days so more income is starting to come from other sources. The basis of a ‘complementary’ model is very very old, in fact the usual example is the ability to sell mustard to go with the purchase of a hot dog. This doesn’t work for me as usually I expect to get the mustard for free, but try going into a restaurant for a fixed price meal that looks attractively priced and see how much you pay for drinks plus coffee or tea. That’s where the real margin is made.
Google is using free, as in the search engine, to build a huge information base, which it can sell not just as advertising, but as a widening range of complimentary services to commercial users. Think Google maps as an example. Nicholas Carr treats us to his view on this in a longish, but quite interesting blog which I personally found to have some good perceptive insights, including a comparison with Microsoft.
The key question is how to make the various elements of a ‘complementary’ business model accessible to be consumed, by the ‘net economy’ as Nicholas Carr calls it. This brings us back to the Cloud Computing model, not the current much discussed element around using cheap MIPS, but the two higher layers around business services and most of all around ‘platforms’. If you want to understand the Cloud Computing model and its layers then take a look at my past post on this. If you want to make money by getting people/businesses to buy a complementary service then you have to have a way to deliver it, and unlike content this is not likely to be a static page to be sent, but a full on interactive ‘service’ that has to be able to run independently of the people/business using it as part of their process. In other words there are a whole series of major industry players out there who need to get the Cloud Computing model in place to be apply to maximise the use of their ‘services’ and revenues!
So there you have it; whether its IBM, or HP, Google or Amazon, Oracle or Microsoft just to mention a few names they all want to create the Cloud Computing model as a way of making a better business model for them, and to be fair I think for all of us in the same way as the ‘freemium’ model it will be a win-win. As a colleague remarked the technology of the Cloud is evolutionary, but the business model is revolutionary.
[This post appeared originally here and is republished in full by kind permission of Cap Gemini and the author, who retains copyright.]
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Among the proven benefits, DevOps is corr...
Jul. 5, 2015 10:15 AM EDT Reads: 1,224
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
Jul. 5, 2015 10:00 AM EDT Reads: 1,200
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of profound change in the industry.
Jul. 5, 2015 09:30 AM EDT Reads: 1,580
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at the same time reduce Time to Market (TTM) by using plug and play capabilities offered by a robust IoT ...
Jul. 5, 2015 09:00 AM EDT Reads: 2,381
SYS-CON Events announced today that Secure Infrastructure & Services will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Secure Infrastructure & Services (SIAS) is a managed services provider of cloud computing solutions for the IBM Power Systems market. The company helps mid-market firms built on IBM hardware platforms to deploy new levels of reliable and cost-effective computing and high availability solutions, leveraging the cloud and the benefits of Infrastructure-as-a-Service (IaaS...
Jul. 5, 2015 09:00 AM EDT Reads: 1,462
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, 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!
Jul. 4, 2015 12:30 PM EDT Reads: 1,225
"We have a tagline - "Power in the API Economy." What that means is everything that is built in applications and connected applications is done through APIs," explained Roberto Medrano, Executive Vice President at Akana, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Jul. 4, 2015 12:30 PM EDT Reads: 1,424
The basic integration architecture, as defined by ESBs, hasn’t changed for more than a decade. Most cloud integration providers still rely on an ESB architecture and their proprietary connectors. As a result, enterprise integration projects suffer from constraints of availability and reliability of these connectors that are not re-usable across other integration vendors. However, the rapid adoption of APIs and almost ubiquitous availability of APIs amongst most SaaS and Cloud applications are rapidly redefining traditional integration approaches and their reliance on proprietary connectors. ...
Jul. 4, 2015 12:00 PM EDT Reads: 1,118
Internet of Things is moving from being a hype to a reality. Experts estimate that internet connected cars will grow to 152 million, while over 100 million internet connected wireless light bulbs and lamps will be operational by 2020. These and many other intriguing statistics highlight the importance of Internet powered devices and how market penetration is going to multiply many times over in the next few years.
Jul. 4, 2015 09:00 AM EDT Reads: 2,356
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, will explore the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context wi...
Jul. 4, 2015 09:00 AM EDT Reads: 1,469
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.
Jul. 4, 2015 08:45 AM EDT Reads: 1,128
To many people, IoT is a buzzword whose value is not understood. Many people think IoT is all about wearables and home automation. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed some incredible game-changing use cases and how they are transforming industries like agriculture, manufacturing, health care, and smart cities. He will discuss cool technologies like smart dust, robotics, smart labels, and much more. Prepare to be blown away with a glimpse of the future.
Jul. 4, 2015 08:30 AM EDT Reads: 1,282
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Architect for the Internet of Things and Intelligent Systems, described how to revolutionize your archit...
Jul. 4, 2015 07:00 AM EDT Reads: 1,171
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society-changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his session at @ThingsExpo, Jason Mondanaro, Director, Product Management at Metanga, discussed how you can plan to cooperate, partner, and form lasting all-star teams to change the world and it starts with business models and monetization strategies.
Jul. 3, 2015 12:00 PM EDT Reads: 2,428
SYS-CON Events announced today that BMC will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BMC delivers software solutions that help IT transform digital enterprises for the ultimate competitive business advantage. BMC has worked with thousands of leading companies to create and deliver powerful IT management services. From mainframe to cloud to mobile, BMC pairs high-speed digital innovation with robust IT industrialization – allowing customers to provide amazing user experiences with optimized IT per...
Jun. 29, 2015 12:15 PM EDT Reads: 2,849
There will be 150 billion connected devices by 2020. New digital businesses have already disrupted value chains across every industry. APIs are at the center of the digital business. You need to understand what assets you have that can be exposed digitally, what their digital value chain is, and how to create an effective business model around that value chain to compete in this economy. No enterprise can be complacent and not engage in the digital economy. Learn how to be the disruptor and not the disruptee.
Jun. 29, 2015 11:00 AM EDT Reads: 2,290
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will addresses this very serious issue of profound change in the industry.
Jun. 29, 2015 09:45 AM EDT Reads: 2,642
Business as usual for IT is evolving into a "Make or Buy" decision on a service-by-service conversation with input from the LOBs. How does your organization move forward with cloud? In his general session at 16th Cloud Expo, Paul Maravei, Regional Sales Manager, Hybrid Cloud and Managed Services at Cisco, discusses how Cisco and its partners offer a market-leading portfolio and ecosystem of cloud infrastructure and application services that allow you to uniquely and securely combine cloud business applications and services across multiple cloud delivery models.
Jun. 28, 2015 11:00 AM EDT Reads: 2,346
In his General Session at 16th Cloud Expo, David Shacochis, host of The Hybrid IT Files podcast and Vice President at CenturyLink, investigated three key trends of the “gigabit economy" though the story of a Fortune 500 communications company in transformation. Narrating how multi-modal hybrid IT, service automation, and agile delivery all intersect, he will cover the role of storytelling and empathy in achieving strategic alignment between the enterprise and its information technology.
Jun. 27, 2015 10:00 AM EDT Reads: 2,357
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists peeled away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fillin...
Jun. 26, 2015 12:00 PM EDT Reads: 2,360