Maybe I’m picking an easy fight.  But once again, Larry Ellison (News - Alert) is missing the point when he poo-poos “Cloud Computing” as spin-marketing to a “trend.”  Larry Ellison just said that Oracle (News - Alert) would not fight the computing, but all they plan to change is the wording of some ads.

 

But I’m seeing this everywhere.  The latest was Phil Wainewright, who is an advocate of PaaS (an acronym that is fashionably late to the coat-tail party ) who believes telcos should be a major delivery platform for SaaS, albeit one that has failed to deliver to the SMBs.

 

SaaS is bigger than technology.  It is part of the global migration of the economy from products to services.  The world moves so fast, that you have to what you do well, focus intensely on it, be the best at it, and get everything else as a Service.  This requires a new business model, one that Oracle, one that Telco’s can’t quickly presto-chango transform themselves into.

 

In Telecom, the break between circuit-switched and packet-based, the movement to VOIP, has created another disruption in the market.  This is another chance to reinvent the business model.  So we can really start from the ground-up.  SaaS is the PB, Voip is the J … and the new sandwich is nothing like what the world is used to … certainly nothing a Telco or Enterprise software firm like Oracle could be. 

 

Billing real-time, recurring, over-time as you deliver the service does a funny thing.  It forces a business to be fully responsible for the customer experience.  You can’t just sell a software or hardware element and walk away.  Survival requires a service-driven culture.  And if you are all manual, you’ll fail to scale.  Survival requires automation of great service – most of us would rather swipe a card at the airline check-in Kiosk now than wait on line for a person. 

Then, once you’ve got a organization that can withstand the pressure of actually delivering great service all the time, you’ve got to become active in the SaaS community.  The Business community doesn't want a business model that plays well with certain others; we want one that plays well with all others. Before the internet, our shrink-wrapped VCR-like existence was limited. We look to the next level, networkability - the era of Tivo and not caring about the secret server room. It is the essence of social networks. We have a whole platform and industry players ready to go. PaaS depends on the desirability of being networked, the old school term is interoperability.

 

The world has changed more than a little. All of this reminds me of R. Buckminster Fuller and how he was consumed by the use of space. Fuller noted that office buildings get used only half of the time, schools, homes too. In the real world there are practical reasons why you can't rent...do you see people renting out an office every day? In a virtual world there are no such limits. Services now can be consumed in any space and at any time, and that is way beyond the capabilities of old delivery models.  Just marketing spin?

 

Dan Hoffman (News - Alert) is the CEO of M5 Networks.

 

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