At Structure 2010 this week, both Werner Vogels from Amazon and Marc Benioff of Salesforce both described the so-called “private cloud” solutions being offered by a large percentage of the companies at the conference as “false clouds”. I had the sneaking suspicion that the real reason many of these companies were all focusing on these private clouds was not so much due to the allegedly unique needs of corporate customers such as security or legacy integration as much as it was due to the fact that most of them were being built on the classic enterprise sales business model with it’s inherent dependency on trying to front load as much of the sale as possible. Unfortunately, while this leads to start-ups that are able to show great early revenue traction, the challenges of scaling that sort of business are very well known. The lessons to learn from Amazon and Salesforce aren’t about the technologies of the cloud, they’re about the business model, but there were only a handful of start-ups that seemed willing to follow in their footsteps.
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