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Key Suppliers in the New ‘Cloud’ Order

Without a doubt, cloud computing idea is going mainstream faster than anyone expected

In the Perezian sense, as the fervor and hype of a technology revolution gives way to a new technological paradigm – a new order, if you will, to the way in which we perceive and do things – there is tremendous disruption among the supply chain participants across entire industries.  Within this disruption there is equally tremendous risk and potential reward.  It is this change process within which we often refer to clichés phrases like ’survival of the fittest’ and ‘the crème rising to the top’, etc.

Without a doubt, cloud computing – or the idea that I can get all the computing power whenever I need it, wherever I need it,  scale up and down on demand paying only for what is consumed – is going mainstream faster than anyone expected.  And you don’t need to consult Gartner or Forrester to figure it out.  Just tune in to any NFL football game on the weekend and spot the slick new IBM advertisement on TV!  (I felt like calling my Mom in Canada and asking her to tune in, since she’s been asking me for five years exactly what it is I do for a living!).

Mainstream media advertising aside, the real impact of cloud computing is still developing and will be for a while now.

As methodologies and best practices for IT deployment align with fundamental technological changes (such as that represented by the idea of cloud computing), empires built on old-world processes and systems can come crumbling down.  Witness the profound directional changes dumped onto companies like Microsoft in recent years.  The existence of companies like Amazon and Google, purveyors of all things cloud, and Salesforce, the grand poobah of SaaS, have literally forced the largest software maker on the planet to change its direction completely or risk its prestigious 30 year reign of relevance to consumers.  I’m not one of the Chicken Little pundits that think Microsoft’s days are numbered. Far from it. But the changes coming from MSFT these days are arguably like none other in its history.

At 6fusion, we see four critical groups in the supply chain that will live or die with the sea-change of cloud computing.  Those groups include:

  • The Channel (IT Service Providers)
  • The Network Providers (ISP, Telecoms companies)
  • The Hardware Manufacturers (Dell, HP, IBM, etc)
  • ISVs (Independent Software Vendors)

Here is what I find amazing about these four groups:  The pendulum for the next several years will be wild and dramatic.  Embrace change and potentially ride a revenue wave like you never thought possible.  Resist change, and leave your fate to chance.  Maybe I need a bit more excitement in my life, but I personally think a front row seat to this action is the best ticket in town! Here are just a few of the major league questions facing industry stewards:

  • Managed Hosting Providers and purpose-built SaaS companies want to own the end user customer relationship. The cloud represents the biggest disintermediation threat in recent memory. How will the modern IT Service Provider stave off the biggest threat since Dell’s direct model in the 1990’s?
  • The network is the most commoditized resource in cloud delivery. As the role of the modern network provider changes, some of the big telecoms firms have decided to become cloud service providers in order to reach beyond the packet for revenue. What are the risks inherent with Telco’s playing in the cloud space? How can Telco’s and ISPs leverage their position as a key raw material component of the cloud to position themselves for a more profitable future?
  • The days of competing on logos and laurels are dead and buried. In a new world where the purchase and supply of hardware is being driven by ROI, footprint reduction, more support for less money and hyper-efficient supply chain logistics, will the big iron shops be agile enough to compete? What are the implications for the big firms that decide to inter the cloud computing service fray, going head to head with other market entrants, possibly even existing clients?
  • SaaS is clearly the future business model for the delivery and licensing of business-value software. But two facts remain: 1) getting there takes a complete overhaul of legacy systems, the kind that represents massive strategic shift and 2) the world is full of legacy systems, contrary to the hype cycle in the industry. Where is the bridge between the old order and the new order for software companies and how will they cross it?

Most that know us know our technology is beginning to play a key role in the future direction of these supply chain participants.  We develop technology with an eye for making computing simpler, which removes proprietary silos that only serve to slow down the realization of a world where cloud computing methodologies are included in standard deployment best practices for IT.

Over the next several weeks I plan to dedicate some blog space to each of these core groups and unfold a bit of what 6fusion has been up to as we continue our quest to deliver the promise of this new technology to the widest audience in the cloud.

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John Cowan is co-founder and CEO of 6fusion. John is credited as 6fusion's business model visionary, bridging concepts and services behind cloud computing to the IT Service channel. In 2008, he along with his 6fusion collaborators successfully launched the industry's first single unit of meausurement for x86 computing, known as the Workload Allocation Cube (WAC). John is a 12 year veteran of business and product development within the IT and Telecommunications sectors and a graduate of Queen's University at Kingston.