Over the last two years, I have had the chance to validate these guidelines with many SaaS businesses, and it turns out that these early guesses have held up well. The best SaaS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8. And many of the best SaaS businesses are able to recover their CAC in 5-7 months. However many healthy SaaS businesses don’t meet the guidelines in the early days, but can see how they can improve the business over time to get there. — SaaS Metrics 2.0 – A Guide to Measuring and Improving what Matters | For Entrepreneurs
Customers who move very slowly or who believe that a private cloud platform should integrate tightly with the old world are not our target customers. Companies who want to extensively customize their own cloud platform are not our target customers. Organizations who are looking to employ large groups of IT staff in building and maintaining a private cloud are not our target customers. — Eucalyptus Empowers the New World of Software | Eucalyptus
In truth, though, the best way to understand these companies is to listen to what they say. — Simplicity — Benedict Evans
We’re looking for industries with big margins and that are relatively stable, and then [to] find startups that can disrupt that sector,” said Thurston, Ironstone’s CTO and fund manager. — » More VCs bet on algorithms to mine for deals
AWS vs. CSPs: Hardware Infrastructure
There's big expectations mis-alignment in OpenStack-land -
While this dude’s tone is pretty harsh, there’s not too much wrong here if you peel that back. The issue is one of contextualizing OpenStack. I think a lot of people want it to be a finished, done product.
There’s even the sense from some OpenStack die-hards I’ve spoken with over recent years that commercializing at this point is a joke: it’s too early. I don’t think any of them realize that’s what they’re thinking, but when you hear about modularity and customization, it’s a good sign that the person is implying “it’s not fully baked yet” (though not always).
The rest of the world is desperate for OpenStack to be a full fledged product now. Something that you could download and get up and running quickly in the same way that I could download Windows Server and get it up and running after installing it. I don’t think the community really wants that at the moment and is instead looking at vendors to do that over the coming years.
That message never gets articulated well. The OpenStack community is very developer-think oriented, not product oriented. What it needs is some additional product marketing efforts to explain itself. The Eclipse Foundation is very good at this: “The Market” is rarely confused about how Eclipse projects fit in and expectations are generally set. And at the same time, within the Eclipse community, commercialization strategies abound. TaskTop is a good example here.
Now, there’s cases of large companies working on internal private clouds with OpenStack (to me, that’s the short and medium term commercial driver of OpenStack), and this week at the IBM software analyst event I heard that many of their new SaaS offerings are running on OpenStack. We covered some of the newer case studies in a recent 451 write-up as well, and also check out our general overview of the recent OpenStack Summit (subscription required, or a 30 day trial, as always)
There is no “Java product” to be downloaded: there’s just several engines to pick from and then a whole bunch of other stuff you need to wrap around it to finally be able to develop and then deploy an application.
OpenStack is sort-of-kinda in that same spot…except everyone is kind of confused about it. As the title here says, there are massive expectation mis-alignments in the OpenStack world and it’s clearly time to fix them.
(Geoff Arnold has an excellent write-up of this topic, you should go read it.)
A $50m super computer for $33k -
Amazon today operates at a scale that most people are unaware of and find incomprehensible when they get a glimmer of understanding of it. Just to offer an example, one weekend Cycle Computing used EC2 spot instances to create a 156,000 core supercomputer that spanned 8 AWS regions and provided 1.2 Petaflops of processing power. In its presentation, Cycle noted the tremendous cost savings this offered: $33,000 instead of the $50 million plus it would have cost if the equipment were purchased.
Why vendors can’t sell OpenStack to enterprises
Dear Dumb Founder, what are you going to do? As the Denzel Washington character says in Training Day:
You know you’ve done f-cked up now.
Here’s what you’re going to do: you are going to make it worse by using drugs. You start over-marketing your shitty product. When you realize that’s not going to work, you decide that the company should do something else. You start talking about “what you really want to build” because you’re not up for the challenge of executing against what you actually have in front of you. You claim the first idea was really just a way to get to the second idea, which is like having kids because what you really want is grandkids.
Dear Dumb Founder, you made this bed, now sleep in it. Make the company that you started work. Just do it. Nobody cares how. — Dear Dumb Founder — What I Learned Building… — Medium
More broadly, though, AWS hasn’t really had innovation competitors to date. Microsoft Azure is a real competitor, but other than in PaaS, they’ve largely been playing catch-up. Thanks to its extensive portfolio of internal technologies, Google has the potential ability to inject truly new capabilities into the market. Similar to what customers have seen with AWS — when AWS has been successful at introducing capabilities that many customers weren’t really even aware that they wanted — I expect Google is going to launch truly innovative capabilities that will turn into customer demands. It’s not that AWS is going to simply mount a competitive response — it will become a situation where customers ask for these capabilities, pushing AWS to respond. That should be excellent for the market. — CloudPundit: Massive-Scale Computing | the business of Internet infrastructure, cloud computing, and data centers