eCommerce News

Bill Loumpouridis

Why did it take so long for Oracle, SAP, and Microsoft to truly embrace the cloud?

Business models are funny things. In the Internet Age, the right business model at the right time can catapult a company to fame and fortune practically overnight. Groupon, Zynga and others are a testament to this. Similarly, the inertial drag of an antiquated business model can be the root cause for the rapid demise of others. The tech industry is littered with many flameouts like Palm and RIM.

The obstacles that legacy, premise-based software vendors face to Cloud presence are not so much technical, as they are strategic and logistical. Channel sales and distribution models, which make up the bulk of sales for large legacy independent software vendors (ISVs), rely on one-time payouts for software licenses for their viability. These ISVs have bridged the gap in the short term by slapping “Cloud” stickers on their software CDs and providing financed leases to their software and then passing on the cost of the financing to their customers.

Another strategy is to hedge; buy a cloud company and live in both worlds simultaneously. SAP, with its purchase of Success Factors, and Oracle, with its purchase of RightNow, are buying access to Cloud distribution strategies as much as they are buying technology and customers.

2011 will be remembered as the year these slumbering giants finally woke up to the promise and potential of Cloud technology. Buying their way in is the only way to play catch-up, and that’s great because I hear that Larry Ellison throws great parties. The challenge in harmonizing these disparate architectures into holistic solutions, however, will be formidable.

Bill Loumpouridis

In case you missed it, over the summer Gresso announced the release of a diamond-encrusted iPhone 4.

While there is always a market catering to the egos of hyper-rich, it made me realize that what Apple has done is democratize technology on a level that is absolutely unprecedented. If Warren Buffett decided to spend his entire fortune tomorrow to find a  “better” cell phone, he could not buy a better cell phone with better apps. He could buy a better case from Gresso, but the phone itself is the same one that you or I could buy at our local Verizon or AT&T store. This is the same phone that will be obsolete in 2-3 years because of the amazing innovation machine that Apple sustains.

That’s democratization.

It’s not just the phone itself, either. It’s the access to continuous innovation. The App Store ecosystem is an unprecedented cauldron of curiosity, innovation and genius. While I’m using Apple as the poster-child for democratization, the same is absolutely true of the mobile phones included in the Android ecosystem.

In many ways the Cloud has done the exact same thing for Enterprise IT. For the first time companies with small IT budgets have economical access to Cloud-based infrastructures and applications worth billions. They have access to the greatest security expertise on a time-shared basis. While the milk is not free, it’s silly to even consider buying the golden calf.

Is building out a new corporate data center the moral equivalent of purchasing a $30,000 Gresso iPhone? In most cases, my opinion would be yes, it is. There is a reason that cloud infrastructure companies like Rackspace and GoGrid are displacing corporate data centers: for most businesses, the subscription model for infrastructure is far more economical and enabling than traditional on-premise solutions. And access to the constant innovation for load balancing, performance and security represents democratized access on an unprecedented scale. Far too appealing to pass up.

Bill Loumpouridis

I’m always invigorated by the energy, enthusiasm and out-of-the-box thinking I find at start-up events. The most recent Founder Showcase event I attended in the Bay Area did not disappoint. A bonus for me was that I got to meet one of my heroes – Mark Suster, whose blog I consider one of the finest in the start-up world.

In my own recent blog entry, Spontaneous Ecosystems, I wrote about the fact that “what you get in Web 2.0 is that the barrier of entry goes to zero”. At the Founder Showcase Naval Ravikant’s killer keynote elaborated on this point by describing the current era as the “age of fee leverage”; meaning it has become so inexpensive to start a company that “everyone has done it.”  Leverage in this case is defined as access to cheap “capital, labor, and machines.” The access to “machines” being provided by cloud providers such as Amazon have become ubiquitous. Nearly every startup that I spoke to at the Showcase is using Amazon Web Services (AWS) as their technology platform. In addition to AWS, other IP Platforms mentioned by Naval include Apple’s iOS and Facebook Connect, both of which have spawned ecosystems of a scale unimaginable a few short years ago.

It is really stunning how much Cloud Computing has completely democratized the technology startup landscape. It’s almost like in LA, where 80% of the population is working on their screenplay. Even here in the Midwest, newsletters like Tech Cocktail and Flyover Geeks tirelessly promote countless local start-ups on a weekly basis. I truly believe that we are at an unprecedented age for developing the next big idea. The only barriers to entry left are self-made: fear, uncertainty and doubt.  Beyond that, The Cloud presents no limits.

Bill Loumpouridis

How does Apple keep doing it?  I recently read an article about how Apple is the most undervalued company in America. We’ve come a long way from the time when there was general agreement with my hero Andy Grove talking about the evils of vertical integration he describes in his book, Only The Paranoid Survive – where hardware and software on a device are controlled by a single vendor. I guess Apple proves that vertical integration is fine after all. Especially if your vertical is…everything.

Personally, I abandoned PCs about 3 years ago, and EDL standardized on Apple Macs about 18 months ago. I was a late adopter of the iPad, although I did buy a handful of the devices for our technical staff to play with. Now with the advent of the iPad 2 and iCloud, we are unveiling CloudCraze – iPad Edition, a client application built natively on the iPad.

This is a major step forward for any organization looking to enable a mobile workforce with an enterprise-class, secure and completely un-tethered eCommerce experience. We’re happy to be announcing this application the same week that Apple is announcing iCloud.