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Interesting. Assuming "enterprise" really is that big of a deal in this arena, they had a chance to integrate with Red Hat's customer base and lost it to IBM. I

by rhexs 8y ago

Interesting. Assuming "enterprise" really is that big of a deal in this arena, they had a chance to integrate with Red Hat's customer base and lost it to IBM. I suspect IBM will handily pull into third unless they manage the acquisition like most of their other acquisitions.

whoisjuan 8y ago
> Assuming "enterprise" really is that big of a deal in this arena. Enterprise is not a big deal. It's literally everything when it comes to cloud infrastructure. You can thrive with SMBs but you will never be able to match the revenue potential of closing enterprise deals. The hardcore SaaS sales motto is that if you win the enterprise, you win the market... That's a very very real statement. You're unlikely to capitalize on any expanded and growing market if you're just a niche player catering companies under 10MM ARR. That doesn't mean you can't build a great company that caters for SMBs, but you just won't be a significant player in the market (Think Digital Ocean). You can try to capture all that theoretical mass of small and medium businesses which in theory looks larger and more profitable when seen as a block, but you will burn yourself harder and get less return over those deals. It's simple math. It's better to go after an account that will spend 20MM on your services (for instance Netflix), than trying to close 200 accounts that will spend 100K on your services. The logic here is that by earning the trust and loyalty of the enterprise clients you can slowly capture the other segments of the market. Not the other way around. If Google's plan for their cloud is to focus on SMBs, they will get crushed even harder and potentially disrupted by niche companies which ironically will build their own offerings on top of more feature-rich public clouds like AWS or Azure.
- jpatokal 8y ago
  You're incorrectly conflating "enterprise" with "large" here. For example, Snap and Apple are very large companies in terms of Cloud spend, but they're very much not an "enterprise"/Fortune 500 company that moves at the speed of an arthritic sloth and needs to be sold on the benefits of moving to the cloud.
  - whoisjuan 8y ago
    I'm basing this on the actual technical terminology for classifying business segments. Snap and Apple are definitely considered Enterprises if we go by the Garter definitions that represent business segments as cohorts of different IT needs. SMB (Small and Medium-Sized Businesses) 0-100 Employees with ARR of $5-$10 million SME (Small and Medium Enterprises) 100-1000 Employees with ARR of $10 million to $1 billion. Large Enterprise Over 1000 employees with ARR of over a $1 billion. Of course, there are always going to be outliers or companies that can't be classified exactly in one category because they may have unusual large IT spendings and Infrastructure needs. That's probably the case for Snap and Apple, but that doesn't mean they are not enterprises by definition. As an IaaS, the bulk of your revenue is not coming from Snap anyways. It's coming from companies with those arthritic speeds you mention and that are just starting to realize why it makes sense to move their huge workloads to the cloud.
  - manigandham 8y ago
    Enterprise has always primarily meant size, not "old". It's about the complex requirements that only really come in at a certain scale.

by rhexs 8y ago

whoisjuan 8y ago

> Assuming "enterprise" really is that big of a deal in this arena. Enterprise is not a big deal. It's literally everything when it comes to cloud infrastructure. You can thrive with SMBs but you will never be able to match the revenue potential of closing enterprise deals. The hardcore SaaS sales motto is that if you win the enterprise, you win the market... That's a very very real statement. You're unlikely to capitalize on any expanded and growing market if you're just a niche player catering companies under 10MM ARR. That doesn't mean you can't build a great company that caters for SMBs, but you just won't be a significant player in the market (Think Digital Ocean). You can try to capture all that theoretical mass of small and medium businesses which in theory looks larger and more profitable when seen as a block, but you will burn yourself harder and get less return over those deals. It's simple math. It's better to go after an account that will spend 20MM on your services (for instance Netflix), than trying to close 200 accounts that will spend 100K on your services. The logic here is that by earning the trust and loyalty of the enterprise clients you can slowly capture the other segments of the market. Not the other way around. If Google's plan for their cloud is to focus on SMBs, they will get crushed even harder and potentially disrupted by niche companies which ironically will build their own offerings on top of more feature-rich public clouds like AWS or Azure.

jpatokal 8y ago
You're incorrectly conflating "enterprise" with "large" here. For example, Snap and Apple are very large companies in terms of Cloud spend, but they're very much not an "enterprise"/Fortune 500 company that moves at the speed of an arthritic sloth and needs to be sold on the benefits of moving to the cloud.
- whoisjuan 8y ago
  I'm basing this on the actual technical terminology for classifying business segments. Snap and Apple are definitely considered Enterprises if we go by the Garter definitions that represent business segments as cohorts of different IT needs. SMB (Small and Medium-Sized Businesses) 0-100 Employees with ARR of $5-$10 million SME (Small and Medium Enterprises) 100-1000 Employees with ARR of $10 million to $1 billion. Large Enterprise Over 1000 employees with ARR of over a $1 billion. Of course, there are always going to be outliers or companies that can't be classified exactly in one category because they may have unusual large IT spendings and Infrastructure needs. That's probably the case for Snap and Apple, but that doesn't mean they are not enterprises by definition. As an IaaS, the bulk of your revenue is not coming from Snap anyways. It's coming from companies with those arthritic speeds you mention and that are just starting to realize why it makes sense to move their huge workloads to the cloud.
- manigandham 8y ago
  Enterprise has always primarily meant size, not "old". It's about the complex requirements that only really come in at a certain scale.