July 08, 2019

It’s Not About The Cloud, It’s about The Traditional Business Disruptions It Enables

Stephen Jones

Stephen Jones
Chief Technology Officer /R3SOLV

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The overused and mystifying term “Cloud” has various meanings to different people and is often perceived as something that it’s not. I would argue that the Cloud is simply a platform that exposes all the “ingredients” of the data center to a secured network. But, with a variable cost model that enables business efficiency, optimization, speed to market, and an ability for businesses to quickly adapt to the new world of mobilization, and the “Internet of Things” revolution.

Some will argue that the Cloud is simply a new marketing term for that which has existed. I disagree. From a high-level perspective, there are certainly commonalities – like paying for computing as a monthly service. However, the level of technology abstraction, options/”ingredients”, and the variability of the cost model today, makes for a functionally different and compelling meaning. This next generation of Cloud is resulting in meaningful change for every single industry, company, profession, and jobs that people do. It is sustainable and is here to stay, but it will ultimately result in more of a hybrid model.

The opportunity for businesses and therefore investors lies in one’s ability to utilize these “ingredients” to build disruptive technologies that enable paradigm delivery shifts for users to efficiently solve problems – and to do so from the palm of their hands. The cloud ultimately functions as the underpinning of the bridge to mobilization. The very bridge that serves as the main driver for the Internet of Things revolution that is currently underway.


The following are a few examples of how the possibilities have been embraced with tremendous success.

Nest Labs – The premise was to reinvent things by designing and manufacturing sensor-driven, WI-FI enabled, and self-learning programmable devices. They launched with a thermostat that is installed in a home, but the objective was to create and monetize a smart-grid that serves to optimize many aspects of electricity companies businesses around the world. The thermostat learns when the home is occupied, automatically adjusts itself to lower heating and cooling bills and can be controlled from a phone. It connects to the internet through the home’s WI-FI and sends data back to a data farm in the cloud. The devices essentially serve as a proxy for electric usage in the home and enable insight into real-time electricity consumption across the globe.

This insight, created via “big data analytics” methodologies, was monetized via the sale of that data to the electric companies. As you know, electric companies have many challenges, but the main one lies in the fact that they can’t store the electricity they produce. If they overproduce, it dissipates. And if they under produce, it leads to rolling blackouts and service outages.

Nest essentially changed the supply chain in the world of the production and delivery of electricity. They not only saved the consumer money. but they also mobilized device control for use from the palm of the consumers’ hands. Electric companies suppliers now mine less coal, they require less nuclear energy, they are creating less wind energy.

In less than 4 years, their $99 thermostat changed a 120-year-old industry by creating a smart grid and has led to an exit to Google for $3.2 billion.

Uber – They recognized that an individual runs all from the palm of their hands. Their objective was to figure out a way to transform an existing industry by using the Cloud to tap into it. They created an alternative transportation network and used the concept of crowdsourcing for taxi driver fulfillment. The Cloud provided the “ingredients” needed to create a disruptive technology-based service that achieved mass adoption. They solved a consumer problem by putting themselves with their solution in the hands of the consumer.

Uber then leveraged insights from the massive amounts of data captured from the user to create unparalleled levels of efficiencies, business optimization, and monetized data services. They are essentially the next-generation Taxi cab company and they do not own a single cab.

The disruptive technology created by leveraging the cloud and adapting to the new mobilized world revolutionized an industry that has documented history dating back to the 17th Century -1605 in London.

Netflix – They rented movies over the internet, that’s how they started. They then built an operating system on top of the cloud that has forever changed the media world. This enabled a scalable and a variable cost based infrastructure to deliver video streaming services. My bet, they will drive mass adoption of virtual reality.

From a consumer perspective, they wanted to create a long-tail based library from which one could select for rental – a library with all choices with the expectation that many would buy a few, but enough would be sold to enable a viable business. Their approach is much like an Amazon. From a business monetization basis, as customers watch, they build user profiles around what they like and don’t. Besides the recurring subscription revenue achieved from DVD rentals, these big data analytics-driven user profiles served as a basis to revolutionized the advertising space for streaming content – Advertisers host their own ads and when needed for the presentation, Netflix presents the user profile to the group of relevant bidders for slot purchase. The result is a more targeted and therefore more user relevant ad in a just in time delivery fashion. The cloud served as an enabler for controlled and variable costs, relevant geographic alignment of content delivery, and the scalability required to grow. They need to be able to grow as fast and as big as the business demands while enabling contraction without loss. This was made possible by the on-demand nature of the cloud’s pricing structure.

Netflix utilized the relevant ingredients to create disruption in an industry that has existed for many many years, and one that was plagued with extremely high barriers to entry. In 2000, Netflix was offered to blockbuster for $50M. They declined and are now out of business. Netflix grew and went public in 2002 at $15 per share and is now trading around $365 per share.

WhatsApp – A social messaging company that was purchased by Facebook for $19B. At the time of the acquisition, their platform was the medium through which more text messages were sent than all the Telcos combined.

Today, WhatsApp has in excess of 1.5 billion users across 180 countries and is said to represent 60%-70% of messages sent worldwide. Did you know that WhatsApp Video and Voice Calls consumes two billion minutes daily?

Facebook didn’t buy them not for their messaging revenue. It was all about the volume of the users that they could bring to their social media platform for monetization through advertising.

They completely changed an entire industry because the “ingredients” offered from the cloud. It enabled them to change the rules with a scalable and cost-controlled infrastructure to power their disruptive technology. They mobilized the consumers’ desires while serving as a creator and miner for monetization of that new natural resource – data. 


The mobilization of our world and therefore the advent of the “Internet of Things”, requires that the cloud be leveraged to not only deliver on its possibilities but also as an enabler for the creation of a new natural resource – data. As we create, so must we mine. It’s the new gold.

Other have led the charge in proving that there are significant monetization opportunities and exit value potential. The good news is that this potential exists for all startups and existing businesses seeking transformational outcomes.

The user, be it defined as a person or a line of business application, requires that their problems are solved, or the solution to a problem is delivered to the palm of their human hand. That human hand now serves as a creator of, or a conduit for, creation and access to data.

Bringing structure to the unstructured nature of the capturing and the storage of this data – via software-defined, abstracted and big data analytics technologies – is one of the greatest potentials for investors and business transformers alike. The globalization opportunities that the cloud enables, and the transformational experience that is aligned with the future, makes for a “business as a service” transition that the new world demands as their reality.

The “ingredients” of the data center, delivered via a secured network, allows for the creation of disruptive technologies that enables a competitive business edge. They essentially allow for effective and cost controlled delivery of the “next big thing” for business, and enables them to enter new markets that were traditionally impenetrable.

Risk, capital and operational expenditures become more predictable. Speed to market with scale also becomes a reality. This next-generation of Cloud has proven to be an enabler for businesses to rethink industries and businesses. Rethink yours.

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