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ISVs Moving to the Cloud – New Partners

In my previous Cisco Blog post, I discussed the business models an ISV can deploy in moving to the Cloud. In this Cisco Blog, I’ll discuss one of the most important parts of any software company’s business model: the cost of sales.

Cost of Sales is Highest Cost for any Software Business

cost of sales and marketing

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Building a Successful Hybrid Cloud That Delivers Flexibility, Choice and Control

The debate about whether businesses need hybrid clouds is over. Technology executives see value in public clouds because they offer speed, economics, and scale that are very hard to achieve in a private cloud environment. On the other hand, private clouds offer control, data sovereignty, and security. Businesses need both, which means they need hybrid clouds. The question is; how can they successfully build them?

What makes a true hybrid cloud?

Hybrid clouds are like the Internet. When users connect a device, whether it’s a handheld or a laptop, or another machine, they don’t think twice about how these things are going to talk to each other. Similar to that, hybrid clouds are an “Intercloud” of clouds. That means that regardless of whether it’s a combination of a private cloud, a public cloud, or an extended set of clouds, the environments all work seamlessly together. They have consistent security and networking, and applications and workloads can be moved freely from cloud to cloud.
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Traditional ISVs – Transform your Business into the World of Cloud Computing

If you’re a traditional on-premises software company, you’re in the right place. Today, I will talk about how cloud computing can transform your business. In a subsequent Cisco Blog, I’ll discuss the implication this move will have on your sales and distribution strategy.

Model One Business Model

Traditional software companies have operated in a Model One Business Model. In this on-premises model, the customer buys a perpetual license for software and then pays annual support and maintenance fees, which turn out to be another kind of subscription revenue stream.  While that might seem to be the end of the cost to the customer, it’s not. The customer is going to have to spend money managing the software – and it’s not cheap.

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State of the Cloud: A Case Study of One Company’s Journey

People often ask me: “Is cloud computing really being adopted?”

Over the years, I’ve talked to large and small companies to find out the state of the art in their particular businesses.  There is much more in both the recently released Cloud Computing: Operation Efficiency  and Cloud Computing: Transformation books, but I’ll give you one example here.

Based in Silicon Valley, this company’s revenue in 2014 was approximately $300 million.

Cloud Example

In 2008, I spoke to this company’s CIO and he shared with me that the cloud services in use were predominately application cloud services, in particular: Oracle On-demand, RightNow (later purchased by Oracle), ADP, and Trovix. In addition, the company was using an operations management cloud service Postini for spam filtering security management.

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Seven Software Business Models – Part 2

Many years ago I found myself talking to venture capitalists about the differences between SaaS, outsourcing, ASPs, MSPs, online applications; etc. Also I noticed that my Stanford students had little understanding of the economics of software, so I developed the idea of seven business models to cover everything in the software business, and remove the buzzwords and replace them with economic models.

In my previous blog post we discussed the first four models, this post will cover Models Five through Seven.

Seven Software Business Models

We ended the last blog talking about Model Four being able to provide management of the security, availability, performance and change of the software at nearly 10x less cost.

The question we left with was “how”?

How is it possible to decrease the cost of management without just paying people a fraction of what they made previously?

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