Experienced cloud entrepreneur working to create better cloud storage infrastructure. I have been thinking about this problem myself. Happy to see at least one person working on it. (Hat tip to @doubletate)
One of the easily overlooked features of cloud-based solutions is the potential for network effects. Because a cloud (especially SaaS) vendor has some metadata about their customers, there is the potential to learn something interesting by analyzing that data. Now, every superpower can be used for good or for evil, so let’s be clear about what I am proposing. Evil usage is to try to extract personal information about your clients, and use it against them, or sell it to a random third-party without their permission. Good usage is to use that data to make your service better for your customers. The key to network effects is that the more users you have, the better the solution becomes for the users. These benefits are potentially very valuable, and any solution that ignores them will probably be surpassed by a competitor that uses them well.
Here are some quick ideas on how to create network effects in your cloud-based solution.
- Best Practices: compare one user’s usage patterns to the average of all users, or of users in a similar class. Financial ratios are a great example of this kind of thing, but your users probably have some industry / application specific metrics. Everyone likes to know how they are doing compared to everyone else.
- Common Interests: based on usage or user selection, you can recommend people or things that a user might like, based on what other, similar users like. Think about the “you might also like” feature in the Amazon book store.
- Busy / Free / Location: Which other users are available or nearby right now? Obviously you want to use this in an appropriate way – not every solution should incorporate a “stalker” feature. But if users want to communicate or meet with other users, you may be able to help with this.
- Viral Features: If users might want to pass on certain information, e.g. quotes, screen shots, photos, links, high-scores, etc., make it easy for them to do this. You definitely want to make it easy for existing users to invite new users, and make it easy for the new users to get basic functionality. (remember how limited email was when half your friends didn’t have it?)
- Crowd sourcing: Let users tag or rate things to determine relevancy (e.g. once 10% of your users tag something as spam, you can automatically block it from all the rest), or answer questions to build a knowledge base.
- Social: Maybe your customers will be more interested in certain features or content if they know that other people are using them too – these could be their friends, or they could be influencers in the industry. You can also help people discover hidden influencers, or hidden relationships. Linked-In does this for your second-level network.
- Feedback: this is only sort-of a network effect, but it gets ignored by almost every business. Every customer assumes that if you have lots of other customers, you should know a lot about what those customers want, and how they use your product. Most companies have no idea – they are only slightly better informed than any individual user. If you make it easy for a customer to provide feedback, then 1000 customers can easily translate into 1000 real data points about preferences.
This is a place where first mover advantage can actually be defensible – if you have a bigger database of relevant recommendations than the new start-up competitor, they will have a hard time catching up.
I bought this book a few years ago, and left it to languish on the shelf. I finally picked it up a few days ago, and the first chapter had me glued to my chair. In business school, they told me to avoid start-up business ideas that tried to “boil the ocean”. This book could be aptly retitled “How to Boil an Ocean”.
I haven’t finished it yet, but it reads like a combination of a TED talk and a how-to guide.
Based on my recent work with Double-Take Software’s Cloud business, I guess I am now officially a cloud computing entrepreneur. I am looking for my next project, and just decided to go open source with this. Here are ten ideas off the top of my head – they definitely need some refinement, and some of them will probably not pan out, but feel free to steal them, offer improvements, or how about this – contact me to collaborate on one.
- Modify an existing open source cloud platform into a drop-in solution for hosting companies, with a global ecommerce site and management interface. Hosting companies can get into cloud easily; customers get broad geographic coverage with a single interface. (I know at least one company is already claiming this, but it is a big, big market).
- Take one (or more) existing open source web applications or frameworks (like MediaWiki, Django, Sugar CRM, etc.), optimize the deployment for a highly scalable distributed system (i.e. load-balanced front-end web farm, distributed / scalable db back-end, memcached, etc.), and make it available at a very low-cost for entry users, with the price scaling up with usage.
- Acquire an enterprise-class (or academic usage) simulation / analysis solution, and modify it to use map-reduce. Deliver the results of massive calculations in a few minutes (or seconds), and only bill for the usage. Commoditize massive calculations at a price smaller users can afford.
- Build a management platform to transparently migrate virtualized workloads from a private cloud up to a larger public cloud provider, and back down. (This can be expanded to cross-cloud, or cross-region migrations.)
- Create a encrypting, deduplicating network transport protocol and file system that minimizes the bandwidth and storage required to keep workloads synchronized between private and public clouds. (Useful for #4.)
- Use one of the open-source cloud platforms to build an Amazon compatible cloud in places where Amazon doesn’t have a data center. Amazon is expanding rapidly, but it is a big world, and most countries have regulations restricting businesses from hosting data outside the country. Europe is an especially fertile market for this.
- Build a GUI macro editor with building blocks that include Amazon (or another, or all) cloud resources, ecommerce, and maybe some social and / or mobile features. Let customers build new cloud-based web applications by drag & drop.
- Create a web app that lets a product manager or a sales person enter the typical problems their customers face, and the features of their product that solve those problems, and the ultimate benefit. Let their customer walk through a wizard, checking the boxes to describe their needs, and automatically generate a beautifully designed, customized proposal, based on their requirements. The whole thing is based on standardized templates, but it feels totally customer for both the vendor and the customers.
- Build a Linux-based file server appliance for SMB, with HSM and version archiving to the cloud. It basically has storage that never ends, and the most current / relevant files are always local.
- Add virtual machine recovery and remote access capabilities to an existing laptop backup solution. When your laptop blows up, you are happy to know that all your files are backed-up on-line. Wouldn’t you be even more excited if you could boot up a virtual machine of your laptop on-line, and finish the task you were already late on?