Frankly Speaking, 9/17/19 -- What is "Cloud"?
A weekly(-ish) newsletter on random thoughts in tech and research. I am an investor at Dell Technologies Capital and a recovering academic. I am interested in security, blockchain, and cloud.
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Because of its popularity, I turned my previous "Let's Be Frank" section on my definition of SaaS into a blog post for permanency, so you can check it out here.
LET'S BE FRANK
This past week, the Forbes Cloud 100 list for 2019 came out. This really begs the question: What is a cloud? or rather "The Cloud"? Well, here's a picture to make this newsletter look better.
I jest mostly out of frustration. Honestly, the misuse of the terms, SaaS or cloud, have made me sad as a technologist. At a certain point, it's outright deceiving to customers.
What is the cloud? This is easier to define than SaaS, which was the focus of my last "Let's Be Frank." A cloud provides outsourced infrastructure management. In other words, cloud services provide on-demand computer resources, such as storage and computing. The main advantage is that a company does not have to actively manage these IT resources.
More specifically, NIST says that the cloud has five essential characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service. At the end of the day, it's about who manages a company's IT infrastructure. WIth the cloud, a company doesn't have to own its own hardware and maintain it. Simple as that. AWS, Azure, and GCP are probably the main three cloud providers.
Cloud companies help facilitate a customer's transition to the cloud or help them effectively use the cloud. Honestly, I believe this is a pretty broad definition of a cloud company. Even with this broad definition, many of the companies on the Forbes Cloud 100 list are not "cloud companies."
In my opinion, these are NOT cloud companies: Uipath, Hashicorp, Tanium, Confluent, Illumio, DarkTrace, Veeam, Gitlab, Turbonomic, Pindrop, Collibra, Thoughtspot, Exabeam, and Ionic security. These are great companies, but it's definitely not obvious that they are cloud companies. Most have appliances and aren't even pure software companies!
Honestly, if Forbes just wanted a list of the top 100 startup companies, they should call it "Forbes Startup 100." Using the word "cloud" is misleading and deceiving. I know why companies and investors want to describe companies as cloud -- to receive higher revenue multiples because cloud is a high growth area.
I think it's time to be precise how we use some technical terms because they imply certain benefits and usages. Using the word imprecisely or in a buzzy way is just misleading to customers and creates confusion and frustration.
TWEET OF THE WEEK
This is out of control! How have we gotten here as an industry?
