Pipeline Publishing, Volume 7, Issue 1
This Month's Issue:
Into the Cloud
download article in pdf format
last page next page

Uniting App Trend with Cloud’s Potential

back to cover

article page | 1 | 2 | 3 | 4 | 5 | 6 | 7

There is certainly no correlation between development costs, price, and ultimate return. Nor between personal utility and price. For some of these categories, the market follows the dynamics of Fads rather than supply/demand. It is clear that this is a chaotic market system that has not yet stabilized. Often increasing numbers of users and increasing numbers of products stabilize markets, but so far, not in this case.

It is also important to realize that the further down the list you go, the more critical the cloud becomes. If the greatest return is at the top of the list, then cloud computing becomes a sink for resources without return on investment and the cloud will become a bubble that will burst. So if you invest in the cloud, you must develop a strategy for returning investment revenue from these app types. I’m not seeing these strategies and, believing in the Cloud as I do, it greatly worries me.

This is way more difficult than deep packet inspection.


differentiate themselves. At which point you drop all but the most lucrative avenues. So Microsoft faced with a decision, which to pursue: Cloud or Desktop? They peruse both, partial functionality in the cloud apps and greater functionality in the desktop. But those service providers with fewer resources must decide: ‘Win the Platform’ or ‘Win the Apps’? Build their own app store or attract app ISVs. Hence we see embedded 3rd party apps on new smart phones. And ISVs must decide: play or stand pat? For the rest of us, how can we develop an effective strategy to answer these respective questions? These questions are currently being put to CEOs.

For the long term, somehow we collectively need to move the market dynamics away from ‘fad behavior’ and toward the alignment of rewards and performance. For this we


Winning Strategies

So far the winner of a linked grouping in this ecosystem [controlling app, network appliance, app store] is Apple. Their strategy is monopoly: control appliance, app sales and platform but not the app supply. Their windfall is today’s sh*t-storm of apple apps. But many of those app creating companies are folding every day. Success breeds repetitive strategy. Google now plans to sell apps in an app store. We expect Microsoft will respond when the Windows 7 phone is released. But, given the risk on return for new app development investments and subsequent failure rates for apps; rather than seeing risky investment in new forms of apps, we see existing applications being ported into app versions. When the platform companies control the market and the app makers fail left and right, what sensible OSS/BSS vendor would port their high value applications to the cloud as apps? Hence we see a lot of application hosting renamed SaaS.

When you have the resources, in blind/chaotic markets, the best strategy is to pursue all options until, as the market matures over time or information is accumulated, one or another approach


need the likes of Microsoft and Oracle, and the other big hitters, to play leadership roles. When running effective companies, the whole point of the popular Kaplan’s Balanced Scorecards is to align rewards with performance. Short of establishing a monopoly, no single company controls overall market dynamics. Apple likely understood this when choosing to set such strong monopoly controls in place.

Surprise! I have no answer here. But I can help with tools for an individual company to use in developing strategy in this chaotic app market.

Strategic tools

Guessing is a historically sound approach. With guessing you are betting on the person making the guesses rather than on a specific method for creating strategy. You seek out and acquire the team with documented historical successes at setting strategy. You find and pick the market bellwethers. What you do not do is let your existing undocumented team get away with making guesses. That way leads to failure.

article page | 1 | 2 | 3 | 4 | 5 | 6 | 7
last page back to top of page next page
 

© 2010, All information contained herein is the sole property of Pipeline Publishing, LLC. Pipeline Publishing LLC reserves all rights and privileges regarding
the use of this information. Any unauthorized use, such as copying, modifying, or reprinting, will be prosecuted under the fullest extent under the governing law.