The last year I wrote quite a few posts on the business models around SaaS and cloud computing including SaaS 2.0, disruptive early stage cloud computing start-ups, and branding on the cloud. This year people have started asking me – well, we have seen PaaS, IaaS, and SaaS but what do you think are some of the emergent cloud computing business models that are likely to go mainstream in coming years. I spent some time thinking about it and here they are:
Computing arbitrage: I have seen quite a few impressive business models around broadband bandwidth arbitrage where companies such as broadband.com buys bandwidth at Costco-style wholesale rate and resells it to the companies to meet their specific needs. PeekFon solved the problem of expensive roaming for the consumers in Eurpoe by buying data bandwidth in bulk and slice-it-and-dice-it to sell it to the customers. They could negotiate with the operators to buy data bandwidth in bulk because they made a conscious decision not to step on the operators’ toes by staying away from the voice plans. They further used heavy compression on their devices to optimize the bandwidth.
As much as elastic computing is integral to cloud computing not all the companies who want to leverage the cloud necessarily care for it. These companies, however, do have unique varying computing needs. These needs typically include fixed long-term computing that grows at relatively fixed low rate and seasonal peaks. This is a great opportunity for the intermediaries to jump in and solve this problem. There will be fewer and fewer cloud providers since it requires significantly hi cap-ex. However being a “cloud VAR” could be a great value proposition for the vendors that currently have a portfolio of cloud management tools or are “cloud SI”. This is kind a like CDO (‘Cloud Debt Obligations’ :-)) – just that we will do a better job this time around!
(Cross-posted @ Cloud Computing )