Tag Archives: saas

In the Clouds

Cloud Computing is a fancy term these days that applies to many different things. Concepts such as Software as a Service (SaaS), On-demand Computing, Utility Computing, Managed Services or even older ones as Hosting or Outsourcing, seem to all fall under the Cloud buzzword.

The basic concept is that the Cloud provides IT infrastructure (processing, storage, database or applications) on-demand, on a pay-per-use basis. The most renown examples of Cloud Computing are Google App Engine and Amazon Web Services. Microsoft recently launched Live Mesh, enabling users to upload files, folders, and sync PCs and devices info through the Live Mesh cloud. Web applications such as Salesforce.com or even Facebook, are often referred as clouds, providing SaaS, and Facebook giving APIs to develop applications. Even the recent HP bid to acquire EDS, has been tagged as a move to reinforce HP position in the Cloud market.

A vivid example of what Cloud computing can represent for an online startup can be found in NYT’s article Cloud Computing: So You Don’t Have to Stand Still.

[…] Animoto, an 18-month-old start-up in New York that lets customers upload images and music and automatically creates customized Web-based video presentations from them; […] earlier this spring about 5,000 people a day were trying it.

Then, in mid-April, Facebook users went into a small frenzy over the application, and Animoto had nearly 750,000 people sign up in three days. At the peak, almost 25,000 people tried Animoto in a single hour.

To satisfy that leap in demand with servers, the company would have needed to multiply its server capacity nearly 100-fold, says Stevie Clifton, 30, a co-founder […]. But (they) had neither the money to build significant server capacity nor the skills — and interest — to manage it.

Instead, they had already worked with RightScale, a cloud services firm in Santa Barbara, Calif., to design their application for Amazon’s cloud. That paid off during the three-day surge in growth, when Animoto did not buy or configure a single new server. It added capacity on Amazon, at the cost of about 10 cents a server per hour, as well as some marginal expenses for bandwidth, storage and some related services.

The example illustrate the opportunities that Cloud Computing represents for entrepreneurs for prototyping applications with little investment. Startups can launch without the risk of being killed by success, as they are able to easily adapt IT infrastructure capacity to their growth. See “Cloud” price lists from Amazon and Google below:

Amazon Web Services pricing in USA:

    $0.15 per GB-Month of storage used
    $0.100 per GB – all data transfer in
    Data Transfer
    $0.170 per GB – first 10 TB / month data transfer out
    $0.130 per GB – next 40 TB / month data transfer out
    $0.110 per GB – next 100 TB / month data transfer out
    $0.100 per GB – data transfer out / month over 150 TB
    $0.01 per 1,000 PUT, POST, or LIST requests
    $0.01 per 10,000 GET and all other requests*
    * No charge for delete requests

Google App Engine provides 500MB storage and up to 5 million pages per month on the free package. ReadWriteWeb discloses that App Engine price will be:

    $0.10 – $0.12 per CPU core-hour
    $0.15 – $0.18 per GB-month of storage
    $0.11 – $0.13 per GB outgoing bandwidth
    $0.09 – $0.11 per GB incoming bandwidth

The old promise of Outsourcing to convert CAPEX into OPEX is now at the service of the entrepreneur. Clouds can be a true engine for innovation.

Picture: Ricardo Carreon

Microsoft needs to revamp brand

Microsoft keeps losing market share slightly and continuously, in part thanks to Vista.

But let’s admit it, Vista is not that terrible, even if far from perfect. Microsoft  monopolistic habits and greed to milk the licenses cow, make people have a negative feeling (not to say hate) about Microsoft. Steve Ballmer’s arrogance do not help improve Microsoft image, and Gates stepping out did not help either. Bill Gates, still blamed with most of the evils of Microsoft, is a person that can only be admired for what he has done to bring computers to everyone, not to mention his philanthropic actions.

And then we have Apple 2.0. The turn around of Apple after Jobs return is amazing. Driven first by the iPod, then new MacBooks and iMacs, and lately the iPhone, Apple is more than ever the  iconic brand that sets the trend. Microsoft has never raised a fraction of the passion that Apple generates in their users. And with Vista being the excuse of many to switch to Mac, it is no surprise that Mac market share grows.

And if Apple was not enough to threaten Microsoft Status Quo, then we have Google with the same kind of bet for simplicity, user friendliness and its nearly altruist services and software in the on-line world. MSN, Hotmail and Live services inherit the same greedy behavior of Microsoft: did you ever got your Hotmail account reset and lost all your emails because you did not login for 30 days? how slow was Hotmail, partly due to the flashy banners all across the page? how long it took them to match the 1GB capacity of initial Gmail? and what about lack of POP support and removal of MS Outlook support, forcing the user to suffer their ad-intense webmail?

As the browser becomes the OS (by supporting the increasing offering of Software as a Service), Mac and Linux distros become stronger alternatives to Windows. SaaS brings the OS battle on-line, and that explains also the strong interest of Microsoft to become a stronger Internet player acquiring Yahoo.

Windows still enjoys a huge market share above 90%, but its brand is lagging behind Apple’s Mac and Google. That does not have to be a fatal illness, but Microsoft should better look into it before it is too late.

Market Share data source: Hitslink