Tuesday 13 November 2012

Big Data: Big changes

I was fortunate enough to attend a briefing session on Microsoft's latest update to the Windows Azure Platform yesterday. While I found the technical update interesting, I found the potential changes to ISV's (that's application developer's to you and I) future business plans the most compelling.

While listening to the session, I started to wonder about the following questions?
  • Do you create a new cloud application or migrate your legacy code to the cloud?
  • Will you be able to charge the same for the cloud option as your on-premise application?
  • Will your cloud-application cannibalise sales of your local applications?
  • Will monthly recurring revenues feed into existing sales plans? Do we have to have two sales teams?

After a little bit of reading on the topic, it became apparent, that I am not the only person asking these questions. There is a great white-paper written by David Chappel (who wrote a lot of the current Windows Azure website documentation) on the changes to developers business models as a result of the move to the Cloud. 

In David's paper, there are a few graphs that demonstrate the differences between the standard (or legacy) model of on-premise applications and cloud based recurring monthly revenue models as outlined in the following image;

Some of the key features of the SAAS model include; larger initial investment, smoother growth and a potential for greater long term revenue. I have a couple of (potentially naive) challenges to this model. 

First, I thought that the cloud as development and deployment platform was supposed to be cheaper - and, so why do we require longer initial investment? Second, better longer term growth is good, but it's still early days for the Cloud, and so how do we really know that a cloud based application will generate longer term in growth?

This paper and the venture capitalists group Bessemer' 10 Law's of Cloud Computing and SAAS are well worth a read. You can find out more in the references section in the bottom of this post.

Also, I did not know that Microsoft now supports a version of Hadoop through their Azure "Big Data" Insight HD Server. You can find out more on how Microsoft plans to offer data-mining and large-data set analyse here: http://www.microsoft.com/sqlserver/en/us/solutions-technologies/business-intelligence/big-data.aspx


Read more about Hadoop here: 

Microsoft's Azure Overview Poster

Bessemer’s Top 10 Laws of Cloud Computing and SaaS 


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