Are Service Providers the “Storage OEMs” of the Public Cloud?

Again, maybe I’m a slow learner, but it dawns on me that service providers — Rackspace, Savvis, Terremark that was, and all kinds of MSPs for the SME/SMB market — are going to be the trusted providers of public cloud services in the near future.

Maybe not this year (it’s fashionable to sneer at public cloud nowadays, which means nothing except that it’s passing through the Trough of Disillusionment).  But in 3 years, or 5 or 7?  You betcha.

And, just like customers today won’t buy storage systems from startups, but buy them from VARs and OEMs today, customers won’t buy public cloud from startups.  They’ll buy it from service providers and MSPs.

Which puts these guys in a similar structural position to storage OEMs: they need to buy startups in order to get R&D, and startups them them to partner with in order to show a great balance sheet and other stigmata of credibility to their customers.

My impression — pretty uneducated, but I’ll look into it shortly — is that service providers are still somewhat green at the partnership/BD/M&A game.  That should change rapidly.

Your thoughts?

Death of the PC

Maybe I’m behind the curve here, but it strikes me that we need to start seriously planning for the death of the PC.

Those of us who remember the Larry Ellison/Scott McNealy “network computer” chatter of the ’90’s will wince a bit, but this time it’s for real.

Consider:

  1. The network is now ubiquitous enough and reliable enough for an almost-always-connected model to work.  Not perfect, but good enough.
  2. New clients (tablets, to be sure, but netbooks and smartphones as well) are gorgeous and compelling, more usable in some ways than desktop PCs and creeping up on laptops.
  3. We are beginning to understand how to connect cloud backends with multi-client front ends.  These will get better and better.

All of this is a recipe for multiplicity of clients, and a accelerated drop in share for PC clients.

HP’s move to spin off its PC business, and Dell’s flailing about with new acqusitions and acquisition models are evidence that the top two PC makers are planning for the deatfh of the PC.  Microsoft’s bluster about the robustness of its Windows and Office franchises is typical disruptee talk.

More later on how to invest.

NoSql and its Skeptics

A September 2010 post by Michael Stonebraker was the subject of some back-and-forth in a recent CACM.  Dr. Stonebraker was saying that enterprise customers were skeptical of non-SQL or anti-SQL approaches because, among other things, they lacked ACID coherence and didn’t have a uniform functional query language like SQL.

The discussion was reminisicint of many in the “disuptor/disruptee” wars of technology: noSQL approaches (lumping them together for the moment) are inadequate for the cutting-edge needs (OLTP) of the cutting-edge users (big enterprise customers).  Of course, there are a number of niche applications — processing Web logs, for example, or call data records, or maybe BI applications in general — where the noSQL-based solutions are “good enough”, or, maybe, even better.

The trick for the noSQL vendors — and their investors — is to find out which niches those are and suffice them, quick.

Backing the Ferber Brothers

Seven years ago, AOL acquired Advertising.com for some $500M, a nice payday for brothers Scott and John Ferber, who had co-founded the company, named TeknoSurf.com, in 1998.  Valhalla founders backed the company as investing professionals at predecessor firms.

Estimates are that the company, before and after the AOL acquisition, has grossed some $3B in online products and services.  Understandably, the Ferbers (and other investors) felt that we left money on the table by what now seems a “premature” acquisition.

A made-to-order Serial Entrepreneur scenario.  Scott Ferber has taken another turn at bat with TidalTV, a video ad network founded in early 2008, and this summer John Ferber has stepped up as co-founder of Domain Holdings, a “domain-lifecycle management” company.

In both cases Valhalla has invested in its winners.  Why not?  These are brilliant guys with a great business sense and a technology-enabled advantage that should help them win — and win perhaps even bigger than before — in their new ventures.