Bessemer Venture Partners (BVP) isnít exactly a household name. But the global venture capital firm has an A-list of cloud companies in its portfolio, one of the largest in the VC industry, or so it says.
I happened to come across a reference to it in my LinkedIn news stream the other day. LinkedIn Corp. , by the way, is one of the cloud startups BVP funded way back when, along with some other names with which youíre probably familiar -- Postini Inc. , Eloqua, and Pinterest, among others.
What grabbed my attention was the headline: "Bessemerís Top 10 Laws of Cloud Computing," a treatise on the "new principles of 'Cloudonomics.' "
The 30-page paper targets cloud-wannabe CEOs, which is not surprising, given BVPs client base of could-be execs of future LinkedIns. But there were also more than a few takeaways for a broader audience -- cloud customers, brokers, consultants, or CIOs -- anyone seeking insight about how to navigate the cloud today and in the future. Here are five I thought were particularly relevant.
Drink your own champagne
In the IT world, this advice is usually offered in a canine context. But it doesnít surprise me that in the rarified world of venture capital, the metaphor has evolved from dog food to the bubbly. In either case the point is the same: To truly understand the cloud revolution, you have to be a part of it, which, BVP says, means understanding the issues, challenges, and opportunities of cloud deployments as well as leveraging the cloud for your own internal systems and employees.
Build for the doer; build employee software
Todayís employees are people who are using rich cloud applications every day to find restaurants, book flights, communicate with friends, and manage their business networks. These employees expect to have similar "cheap and cheerful" products in their work life. BVP characterizes this as "an open revolt against the years of oppression by the likes of SAP and Oracle" enterprise apps. If you are bringing cloud apps to your employees, remember: Youíll need to meet their high expectations about usability and functionality.
Death of the suite; long live best-of-breed and even best-of-feature
The arguments around integrated software versus best-of-breed have been around for decades -- and I wonít repeat them here! Suffice it to say that with cloud computing, organizations can now, in BVPs words, "choose the worldís best application for every need, every user, and every business caseÖ deploy exactly the number of seats you need, where and when you need them." Whatís more, since the Internet is the common underlying infrastructure, "deployments can now be done in days or weeks and service ratios are a small fraction of the software subscription costs."
Make online sales and marketing a core competence
In a cloud business, by definition, sales prospects are all online. So if your business is the cloud, online sales and marketing should be a core competence. But online sales and marketing savvy also makes sense for a lot of other companies, especially those in the business-to-business (B2B) market. How do you develop expertise in cloud marketing? Follow the consumer companies, which, according to BVP, have become "lead generation machines, leveraging social media marketing, search engine optimization (SEO), viral marketing, search engine marketing (SEM), email marketing, and other technically-advanced methods." By contrast, the report says, most leading B2B companies "donít have a clue."
The most important part of software-as-a-service isnít "software," itís "service"
"The only acceptable reason to lose a customer is death (bankruptcy) or marriage (acquisition)," claims BVP. Itís a high bar, but a good goal to keep in mind, whether you are selling cloud services or buying them. Reliability is, of course, a cornerstone of good service. But up in the clouds, where challenges and unique problems abound, itís also important to know how to handle the inevitable service disruption.
Case in point: Amazon Web Services in April 2011, when the cloud company's availability zones famously failed for four days. Hundreds of articles have been written on this outage and the different ways companies handled the situation. Some of the most sophisticated responses came from customers who were very transparent and inventive. They created workarounds that allowed them to bring their systems back online in other AWS zones or on other platforms, even before AWS fixed the probllem.