Drifting Towards “The Cloud”

Possession, it would seem, is no longer 9/10s of the law.  We’re all drifting ever closer towards “The Cloud” – the gradual shift from personal, physical ownership of computer resources to having someone else remotely own and provide these services to you, on demand, over the Internet.

At its Scottish Partner Briefing session in Edinburgh yesterday, Scott Dodds, Peter Ferry and others clearly and unambiguously set out Microsoft’s Cloud Vision, under the tag “We’re all in”:

We're all in

The premise (or should that be off-premise?) for Microsoft is clear.  Many of its corporate customers find its sometimes convoluted on-premise licensing model confusing and overly complex.  Add to this the fact that Microsoft does not directly manage the vast majority of its small and mid-market customers (devolving this responsibility to its Partner Network).  As a direct result, Microsoft currently estimates that it is missing out on potentially as much as 40% of the licensing revenue due to it from its corporate customers. 

So, the cloud-based subscription model, theoretically, allows Microsoft to realise 100% of licensing revenue.  It’s a well-furrowed path which has already been well exploited by the likes of Salesforce.com.  

But it’s not necessarily going to be an easy sell.  Microsoft will face resistance from in-house corporate IT departments, who will not fail to notice that outsourcing to Microsoft the provision of the service which they have (until now) provided represents a pretty significant threat to their job security.

Then there’s the frequently-raised concerns over security of confidential information, privacy and data goverance.

But perhaps most fundamental of all is the paradigm shift from personal ownership.  If we move this from the corporate space to the consumer environment, there is something extremely re-assuring about physical ownership – having what you hold, and holding what you have.  As a music fan, I’ve only recently come to terms with the switch from CDs to storing all my music on iTunes.  OK, I can no longer touch my CDs, but at least I’ve got my physical music files under my immediate control. 

You’ll note that the previous sentence contained 3 ‘my’s.

In a musical sense, the introduction of services such as Spotify and Last.fm begins to shift this essence of ownership away from the self, and into the hands of third parties.  I’m sure it won’t be long before the notion of physical ownership of MP3 files becomes a quaint old throwback to the days of yore.  Instead, all we’ll own is our own, personal playlists – with the physical files themselves held by the likes of Spotify, Last.fm, et al.

Microsoft contends that the shift is already happening.  In the consumer marketplace, it already offers a range of cloud-based services, and all are well used:

• Hotmail has 369 million users worldwide;
• Windows Live has 500 million active ids;
• Bing serves out 3 billion queries per month;
• MSN has 600 million unique users; and
• XBox Live has 20 million subscribers.

If we look at the Corporate marketplace, according to Microsoft, 20 million businesses are already using Microsoft Cloud Services, and this figure is only set to grow. 

Perhaps in this post recession(?), credit-conscious world which we now live in, the most compelling reason for businesses to buy Cloud-based services instead of on-premise services is the move from CapEx to OpEx to meet the cost of their IT needs.  With Capital becoming ever more valued, the ‘pay as you go’ or ‘burn as you earn’ model becomes increasingly attractive to businesses.  It provides the flexibility to cope with peaks and troughs in demand and to throttle back costs when there is a low level of demand for their service.

Whichever way this plays out, one thing is certain – we’re set for a gradual change.  Microsoft views it as a “multi year journey from legacy to cloud”.  And whilst it continues to push Cloud-based solutions to the marketplace, Microsoft won’t forsake those customers whose preference remains for on-premise licensing.  It will continue to service this marketplace as well.

End of the Road for Saab as Economic Slump Claims another Victim

Today’s announcement that Saab will face “an orderly wind-down of operations” is yet another indication of the sheer depths to which the current economic situation has plunged.

Saab

The news that Saab’s owner, General Motors, has failed to find a buyer for the trusted marque has left a number of my work colleagues, who are avowed Saab-groupies, glum-faced.  Andy, Frank, Leena – take a bow.

It follows hot on the heels of the news this week that FlyGlobespan – Scotland’s premium air carrier – will also be wound up.

Personally speaking, I’ve never driven a Saab, but by reputation and recommendation, I hold the marque in extremely high regard as a manufacturer of well-engineered, reliable and trustworthy cars. 

Fly Globespan

I have, however, had experience of FlyGlobespan and have nothing but good things to say about them.  They’ve transported me and my family on numerous holidays, and we’ve never had the kind of grumbles (late planes, plans cancelled prior to travel, surly staff, etc) which I’ve experienced through the likes of Easyjet and Ryanair.

Aside from the personal inconvenience of having to make alternative holiday arrangements, these recent events provide a clear and stark indication of the depths to which the economic situation has plummetted, when trusted and accomplished businesses are forced to wind up their operations. 

And whilst we’re on the subject of brands which are steeped in tradition and known for operating in their field with distinction and have a global heritage for doing things ‘the right way’, please spare a thought for my football club, West Ham United. 

West Ham United

The way that things are going, I genuinely fear that West Ham United will be the next such respected brand which meets an untimely end as a direct result of the economic downturn.  Granted, some appalling mismanagement of the club’s affairs by West Ham’s recent Icelandic owners has played no small part. 

But, for what it’s worth, I urge Straumur (the consortium appointed to represent the interests of the creditors of Bjorgolfur Gudmundsson, West Ham’s former Chairman) in the strongest possible terms to take some decisive action to prevent the inevitable.

As we move ever closer to the January transfer window, West Ham seem incapable of picking up points on the pitch, making the prospect of relegation increasingly inevitable.  If relegation were to happen, West Ham (already reportedly £80 million in debt) would have little realistic chance of avoiding administration – which would see a 10 points deduction and the prospect of Division 1 football (at best) for the start of the 2011 season.

Messrs Sullivan and Gold (formerly owners of Birmingham City) have reportedly had a £50 million bid for West Ham turned down by Straumur.  This raises the interesting (although disastrous) prospect that Straumur (who by their own admission are money people and have no interest in football) may elect to cash in on West Ham’s prize assets in the January transfer window.  By selling the likes of Carlton Cole, Matthew Upson, Scott Parker and Robert Green (all of whom have no shortage of suitors), Straumur would, in a stroke, make an equivalent sum of money to that which Sullivan and Gold were offering whilst in the process removing the spine of West Ham’s team.

The stadium and the London property upon which it stands would be the remaining prime asset, and I’m sure there would be a deal to be done with a housing developer or supermarket.  And all of a sudden – from a financial perspective, this seems like a more attractive proposition than that which Sullivan and Gold have made.

But (and it’s a big ‘but’) this option only becomes attractive as a short term way of stripping the asset if (and it’s a big ‘if’) relegation of West Ham from the Premier League becomes an inevitability.  It isn’t yet.  However, decisive action (a change in ownership and inflow of new net funds before January) is required to avert this.

It’s perhaps ironic that FlyGlobespan isn’t the first airline to go bust in recent months.  XL Holidays – who had been until that point West Ham’s shirt sponsor – went into administration just over a year ago.  Who would have thought at that time that West Ham United could go the same way?

Recession-busting Pants

According to UK retailer, Debenhams, it transpires that we’re all turning to Y-fronts to protect ourselves from the recession.   Sales have increased by 35% since the recession began.

And we’re not talking about the new-fangled trendy ones, as modelled by the likes of David Beckham.  You’ll be pleased to hear, we’re talking about good old fashioned Dad-pants!  Apparently, they provide greater security in times of trouble.

Dad Pants

Looking to front-up to the current recession?  Y would you not want a pair?