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Archive for the category: Cloud Computing

Cloudburst Expected on Wall Street | Xignite Raises $10M

xignite market data cloudWhen not moonlighting at Chaotic Flow and Cloud Ave, I’ve been toiling away at Xignite for the better part of the last three years, and I’m happy to announce that the company has successfully closed $10 million in B round funding. The round was led by of Starvest Partners‘ Deborah Farrington who is #77 on the Forbes Midas List and was the lead VC for Netsuite, and John L. “Launny” Steffens, former vice chairman of Merrill Lynch. Previous investors Altos Ventures, Startup Capital Ventures and Peter Caswell, CEO of Netbase and former CEO of Advent Software, also participated.

While most of the public Silicon Valley buzz in recent years has gone to B2C startups like Facebook, Twitter, Zynga, and the like, I believe we’re at the beginning of a B2B renaissance led by a prominent list of rapidly growing cloud plays like Xignite. B2C startups tend to happen very fast or not at all, and consumers will often forgive their growing pains, even if they’re posting the fail whale on a daily basis. Not so in B2B. B2B startups spend their A rounds very carefully to make sure their offerings are rock solid before they scale. When I joined back in 2008, Xignite had about 150 clients. Today it has more than 900 customers in 47 countries.

The Financial Market Data Cloud

Market data is the life blood of the financial markets Read more »

The Cloud is Dead : Long Live the Cloud!

Recent weeks have brought a bewildering number of competing claims around SaaS and cloud computing. On one hand we are debating whether the SaaS experiment is over, IaaS is just an incremental advance in hosting technology, and the cloud is just hype. While on the other, Gartner estimates SaaS is now 10% of the enterprise market, Amazon AWS is a $500 million dollar business and Jim Cramer is picking his favorite cloud stocks. What’s a person to think? I for one think that recent reports of the cloud’s death are greatly exaggerated, and here is why…

The cloud is real.
The cloud is big.
But, the cloud is slooooowww.

The Cloud is Real. The Cloud is BIG.

It’s absolutely true to say that the cloud is simply the next evolution in computing, but saying it is an incremental change and isn’t all that different from traditional hosting or time sharing is like comparing the Internet to a T1 line. There are lot’s of new technologies and standards, big and small, that go into the cloud. And, there will continue to be others added as it matures. But, you shouldn’t allow the technology to cloud your thinking. The cloud, the REAL cloud, is about bringing any and all of the computing resources available on the Internet together to create Inter-networked applications and computing infrastructures. Consumer mash-ups perhaps being the simplest and earliest of these, but it isn’t that hard to imagine much bigger iron, mission-critical business applications running the same way. Most Internet innovation to date has focused on users and content, and has been strangled by a lack of bandwidth and integration standards. As these constraints erode, the cloud will continue to emerge. The cloud is about the machines. It is as big as all the computers connected to the Internet.

The Cloud is Hard

Security is and will remain the most difficult problem of SaaS and cloud computing, with reliability following close behind. Read more »

Hey SaaS Experts : What’s Your Cloud Computing IQ?

I’ll say it again: SaaS is NOT cloud computing. As the industry rushes to embrace cloud computing, too many SaaS experts and vendors are simply updating their marketing messages with cloud buzzwords. This is not enough.

When I started this blog, the biggest challenge faced by SaaS vendors was getting our heads around the new lightweight paradigm for marketing and selling an on-demand Web application versus the heavy-handed direct sales approach of traditional enterprise software.

SaaS vendors with high cloud computing IQ’s
recognize the cloud as the new channel.

Today, a new challenge is arising. However, this time the threat comes not from the past, but from the future. Just as SaaS vendors have found their Internet footing, cloud computing is destabilizing the very ground beneath our feet. Depending on your SaaS business, cloud computing could impact everything from application architecture to channel strategy. Or, it may not affect you at all. Either way you should know. What is your cloud computing IQ?

The Cloud is the Computer

John Gage’s prophetic remark “The Network is the Computer” beautifully highlights the difference between SaaS and cloud computing. While SaaS applications provide on-demand services to millions of users across the Internet, cloud applications provide on-demand services to millions of other applications across the Internet. The network really is the computer.

Why should this matter to SaaS experts and vendors? Two reasons. Read more »

SaaS Channels | Cloud Channels Will Follow the Money
The emerging PaaS channel opportunity

SaaS channel partners have definitely received the short end of the stick compared to their software channel counterparts. With a few notable exceptions like, Netsuite (and largest, but least recognized as SaaS, Google AdWords) there simply have not been enough customers or enough work to engender a thriving ecosystem of SaaS channel partners, at least not when compared to the sprawling extent of enterprise software channels. I think this is about to change.

Channels Always Follow the Money

There is one universal law that governs all channel management: CHANNEL PARTNERS MUST MAKE MONEY. The biggest channel mistake made by many a SaaS start-up CEO is to fall into the fantasy that SaaS channel partners are there to help your business. They are not. They are there to help themselves. And, how much money they can make boils down to a very simple formula.

SaaS channel money = SaaS channel value-add x SaaS application customers

And right here is the rub. Read more »

Cloud Computing vs. SaaS | Mass Customization in the Cloud

SaaS Do #8 Enable Mass Customization is a core principle for building SaaS applications., for example, has taken it to new heights with offerings such as the platform. However, do SaaS-based development platforms such as represent a fundamental shift in application development, or are they simply the SaaS equivalent of Microsoft Visual Basic for Access? How do they stack up against cloud computing platforms like Amazon Web services? This post examines the potential for competitive advantage through mass customization in cloud computing vs. SaaS.

The short answer is this…
Mass customization in cloud computing is more natural, more flexible, and offers more potential for competitive advantage than in the wildest dreams of SaaS, because cloud computing is built on Web services that are a) inherently abstracted, b) independent components and c) accessible at every layer of the technology stack.

Note: In a previous post, I claimed that the salient difference between SaaS and cloud computing is that SaaS has largely been about Internet applications used by people, whereas cloud computing is about Internet application components used by other computers. More succinctly, Websites vs. Web Services. Although everyone seems to have their own definition of all the cloud buzzwords, I’m going to be rather specific and equate them as such: Cloud = Internet, SaaS = Websites for human users, Cloud Computing = Web services for computer users. My intent is not to debate or define the industry terminology, but simply to keep track of what the heck I’m talking about here at Chaotic Flow.

The Role of Meta-data in Mass Customization
Mass customization in SaaS is achieved by converting hard-coded application functions into meta data configuration settings.  For example, multi-tenancy converts hard-coded deployments of multiple customer databases into a single database infrastructure where each customer deployment is identified by a unique customer ID. All the technical miracles that distinguish one customer’s data from another customer’s data are abstracted to this single piece of meta-data to enable data-driven functionality like Customer[1].Name = “Company X” and “Customer[2].Name = Company Y”. Voila!  Mass customization = meta data abstraction of functional capability.

More Natural – The Inherent Abstraction of Web Services
Mass customization is more natural to cloud computing vs. SaaS for one simple reason: meta-data abstraction is inherent to Web services, but it is optional for websites. SaaS applications must be carefully architected to enable mass customization at all, i.e., it is a matter of good SaaS application design discipline to employ a multi-tenant database, configurable security settings, customizable page views, etc. In contrast, every function of a Web service is inherently abstracted to meta-data in the XML inputs and outputs of the API.

stock quote web service

The Xignite stock quote Web service can return a wide variety of information
such as the current stock price, an intraday stock chart, and financial news
that varies by the stock symbol (meta-data) supplied to it.

For example, given a particular stock symbol (meta data), the stock quote Web service above can return a wide variety of information about a company such as the current stock price, an intraday stock chart, and financial news. Let’s say Company X above is a manufacturer that uses this Web service to create a website with detailed, current financial information about the company for potential investors. Read more »

Obscured by Clouds : Meaning vs. Marketing in the Cloud

It seems that everyone is jumping on the cloud bandwagon.  Cloud this, cloud that, everything cloud. has all but rebranded its entire business as cloud.  Instead of sales force automation, we now have “Sales Cloud 2” (and “Service Cloud” and “Custom Cloud” and “Collaboration Cloud” with nice little TM’s attached, so if you were thinking of using them for yourself, you can forget it!).  I suppose it might be a good thing.  Personally, I was getting pretty tired of trying to “force” this brand, “force” that brand on me.  I really don’t have a problem with the cloud buzz per se.  I think it is good for the industry, because it creates excitement, momentum and funding for B2B Internet companies.  But, I am concerned that all this unbridled rebranding and repositioning is obscuring the underlying technological and economic shifts which characterize this next stage of Internet evolution.

pink floyd obscured by clouds
Cover from the Pink Floyd album Obscured by Clouds.
Not really relevant, but I needed a picture.
Retweet if you’re a Pink Floyd fan!

The Web 1.0 Internet revolution, of which classic software-as-a-service is a part, arose as a result of the universal interface offered by the Web browser.  Suddenly, anyone could access any global computing resource over the Internet as long as they had this one, standard client application.  It didn’t really matter what happened on the back end, because everyone was plugging into the same application on the front end.  I like to think of this as application – user interoperability.  The economic implication of this paradigm shift was that you could now aggregate customers around the globe onto a single Internet application.  Say for example, ordering books or sales force automation.

The shift we are seeing now is driven by increased interoperability on the server side, or rather application – application interoperability.  Read more »

Financial Market Data On-Demand | New Gig at Xignite

After spending the last couple of years consulting around the SaaS and Web 2.0 worlds, I’ve decided to take the startup plunge again and settle down in the clouds. I recently joined Xignite, a cutting edge on-demand cloud services and mashup platform provider that helps companies incorporate accurate, current financial information directly into websites and applications via Web services, i.e., no integration programming required! The company is off-the-charts on the SaaS Success Top Ten Dos and Don’ts as evidenced by everything from the potential market (market data is a multi-billion dollar industry already…based on really old legacy stuff) to the e-commerce Web site to mass customization via the Splice on-demand mashup platform. Plus, the team is great from the sales reps to the board and the culture is pure software-as-a-service.

financial market data saas at
Xignite has a classic SaaS vs. legacy software value proposition
(on-demand web services vs. data feeds and custom code)

We have an Xignite company blog at, so my loyal readers can rest assured that opinions expressed here at Chaotic Flow will remain as objective as ever, but they may start taking a bit of a bent toward the emergence of cloud services…which differ from application-oriented SaaS in some distinct ways that directly impact the economic and business model dynamics–not the least of which is that they are used by computers instead of human beings.  However, the primary value proposition at Xignite remains classic SaaS vs. Software, or in financial services industry-speak financial web services vs. market data feeds.