Editor’s note: Billy Marshall is founder and chief strategy officer of rPath, a startup focused on virtualization software (the ability to operate multiple operating systems on one device) and applications for “cloud” (collaborative) computing.
It’s no secret that the days of cheap capital might be over. While it is obvious that startups with lean capital structures are already embracing cloud offerings such as and , it seems to me that this trend might accelerate further for both startups and even enterprise customers.
Cloud consumption in the startup segment is poised to accelerate as investors like Sequoia Capital warn their portfolio companies to “tighten up” in the face of this credit crunch. Even the well capitalized SaaS (software as a service) software providers might begin reconsidering the “ridiculous” expense of building out their offerings based upon the classic salesforce.com model of large scale, proprietary datacenters with complex and expensive approaches to multi-tenancy.
They might be better served by a model where on-demand application value is delivered via virtual appliances. In this model, the customer can deploy the software on existing gear (no dedicated server required) because the virtualization model makes for a seamless, easy path to value without setup hassles.
Or they can receive the value of the application as a SaaS offering when KnowledgeTree spins up their instance of the technology on Amazon’s elastic compute cloud. In both cases, the customer and KnowledgeTree both avoid the capital cost of acquiring dedicated gear to run the application.
Large enterprises as well will be reconsidering large scale datacenter projects. When credit is tight, everyone from municipal governments to the best capitalized financial institutions must find ways to avoid outlays of precious capital ahead of the reality of customer collections.
More and more of these customers will be sifting through their application portfolio in search of workloads that can be offloaded to the cloud in order to free up existing resources and avoid outlays for new capacity to support high priority projects.
Just as the 9/11 meltdown was a catalyst for the adoption of Linux (I witnessed this phenomenon as the head of enterprise sales at Red Hat), a similar phenomenon might emerge for incremental adoption of cloud associated with the credit crunch of 2008. All new projects will be further scrutinized to determine “Is there a better way forward than the status quo?”
As enterprises of all sizes evaluate new approaches to minimize capital outlays while accelerating competitive advantage via new applications, rPath is offering that might serve as a convenient bridge to close the credit crunch capital gap.
For those that are interested in exploring this new model, along with strategic consulting firm Forrester, Amazon Web Services, and Momentum SI.
If necessity is the mother of invention, we might be poised for some truly terrific innovations in the cloud space … and we will owe a debt of gratitude to the credit crunch for driving the new architecture forward.