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Michael Steinhart

History Repeating Itself in Cloud Stacks

Michael Steinhart
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dstrait
dstrait
10/5/2013 1:24:45 PM
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Platinum
Re: Times are changing
Amazon seems particularly adept at low-margin businesses. First there was bookselling, then various goods and now AWS. The old "low-margin but make it up in volume" strategy. I think that Amazon has an advantage because they have always been a low-margin company, whereas many of the companies that are trying to gain traction in cloud are old-school, high-margin software license companies.

That doesn't mean that those "legacy" companies can't succeed. It's not my niche, but I've seen a lot of bile flung about with regards to Adobe's SaaS offerings but the general attitude seems to be that there is no substitute for Adobe products so everyone closes their eyes and goes along with it.

Adobe, however, has niche products. They are not selling virtual machines or bulk storage, which are about as commoditized as it gets in online offerings. AWS remains the default choice for most implementors for those commoditized sevices. IIRC, DropBox uses AWS S3 for it's storage needs.

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Chris B
Chris B
10/2/2013 6:28:22 AM
User Rank
Platinum
Re: Often so
@Shepy that's a very good point.  I've made corporate software buying decisions based on the view that come five years from now the slighltly overpriced, slightly less robust but rather established software will still be around and will be continuing to be updated.  Getting stranded with a $100k system from a bankrupt company sucks.

@Michael I'd say the software license isn't quite dead.  I agree purchased software does tend to be more robust and configurable than SaaS systems.

I guess my point with Amazon was that they continue to be successful even though they have ridiculously tiny margins and lost buckets of money for many many many years, far longer than would seem reasonable, even now they don't make much in terms of profit.  Sure they've got a nice stock price and a well known brand and tons of customers, but just a few drops in the profit bucket.

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Shepy
Shepy
10/2/2013 4:38:18 AM
User Rank
Platinum
Re: Often so
You know, sometimes its not even down to the 'nobody got fired...' so much as 'well i know X will be around in a year, what about these startups with no record?'

 

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Michael.Steinhart
Michael.Steinhart
9/30/2013 9:20:28 PM
User Rank
Editor
Re: Often so
I think that's spot-on, Shepy, especially in the stodgier, more 'risk-averse' industries. Nobody ever got fired for buying... and so on.

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Michael.Steinhart
Michael.Steinhart
9/30/2013 9:19:17 PM
User Rank
Editor
Re: Times are changing
What kind of long-term target are you referring to, hash.era? Some kind of customer loyalty framework that doesn't require payment for services rendered?

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Michael.Steinhart
Michael.Steinhart
9/30/2013 9:17:59 PM
User Rank
Editor
Re: Times are changing
But is Amazon selling SaaS, Chris? Also, and I could be completely wrong about this, so please provide some reality checking, it seems to me that SaaS works for limited, specific use cases. It's not customizable -- or as customizable -- as stuff that you've bought and paid for. And integrating it can be a pain. 

Do you think the era of licenses isn't over?

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Michael.Steinhart
Michael.Steinhart
9/30/2013 9:14:39 PM
User Rank
Editor
Re: Times are changing
What kind of timeframe and software distribution model might you be thinking of, Ariella? Radical openness?

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Michael.Steinhart
Michael.Steinhart
9/30/2013 9:13:54 PM
User Rank
Editor
Re: Times are changing
So to follow your reasoning, DavidAllen, what should the IT giants do with their salespeople and licensing specialists? 

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Shepy
Shepy
9/30/2013 10:37:55 AM
User Rank
Platinum
Often so
"in the sense that its cloud offerings are evolutionary, not revolutionary"

Often the most steadfast way to grow business though, many wont invest or try new products and risk production systems on the unknown, tried and tested nearly always wins even if just in mindshare to get in at the ground of a project.

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hash.era
hash.era
9/29/2013 12:00:33 AM
User Rank
Platinum
Re: Times are changing
@David: Yes true and without profit there won't be a business but still its not the only option you should consider when you think of a business especially if you have a target which has a longer run in the consideration.    

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