20. A Quick Recap
• Owning servers and hardware is expensive
• A true utility model provides transparent
linear costs
• The stack is made up of:
• Infrastructure as a Service
• Platforms as a Service
• Software as a Service
My name is James Duncan, I’m the CTO of a company called Reasonably Smart. We’re a cloud platform providing a web development environment -- and hopefully you’ll understand what that means fully by the time we get to the end of todays talk.
Although I’ve been at a lot of start-ups most of those start-ups have turned into, or been acquired by much larger companies so I’ve seen and scaled IT from both ends of spectrum, and lots of the problems are similar, it’s often the solutions that are different.
Now, IT has spent the last decade in a bit of an arms race. Enterprises everywhere have been off investing in IT as a way to gain a hold over their competition and the problem is, that it hasn’t worked.
Having a piece of IT that everybody else has is not a competitive advantage, its a disadvantage avoidance scheme.
That’s why CRM systems used to be built in-house, and now everybody just goes to SalesForce.com. It’s why no-one builds their own database or corporate word-processor any more. It’s why companies don’t generate their own electricity.
If we look at slide 3, which is a trivialization to make a point, we’re imagining a industry with only three participants.
If one of the participants adds a great new piece of software that none of its competitors has then it’s getting a return on investment that provides a competitive advantage.
As soon as one other company has the same or a similar piece of software (and lets face it, they will) the advantage is gone.
The remaining industry participant now has a disadvantage, but thats it. That great new piece of game changing software is now a cost centre and the cheaper it is the better.
Slide number 4 presents a more troubling scenario.
When your company invests in developing a new tool, you get a competitive advantage for a short period of time. While you’re showing profits and getting that ROI a new brand-new company springs up and starts offering a similar tool as a product to all your competition.