Kindle Notes & Highlights
by
Joe Weinman
Read between
May 8 - July 3, 2020
References are provided to more detailed papers and to my simulation Web site: ComplexModels.com, which provides easy-to-use Monte Carlo simulations illustrating the Laws of Cloudonomics.
Disciplined frameworks have been developed to aid such decisions, such as the Boston Consulting Group Growth-Share Matrix, which assesses a company’s units in two dimensions: market growth and market share.22 It builds on the PIMS database—Profit Impact of Market Strategies—which has found a correlation between high market share and high profitability.23 A unit in a high-growth industry that commands high market share and thus high profitability, for example, is a “star.” Conversely, high-share business in a low-growth industry is a “cash cow.” A low-share, low-growth “dog” wastes management
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reading this book, you probably have already internalized a substantial portion of it. The executive summary has assertions along these lines: 1. Cloud computing is a revolutionary new technology and business model. 2. “Cloud” is interchangeable with “pay per use” or “on demand.” 3. Large cloud providers enjoy massive economies of scale. 4. Economies of scale are the key to cloud benefits. 5. Large economies of scale lead to large price advantages. 6. Scale and innovation enable proprietary technologies and thus sustainable competitive advantage. 7. Further benefits derive from replacing
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Consequently, the salient factor is not such conversion, but rather, the lack of commitment that the cloud requires and thus the flexibility it offers users to adjust expense streams.
The key financial benefit of the cloud associated with financing choices is not capex versus opex per se but the notion that resource costs are aligned with resource demands.
There are many elements of differentiation besides cost: customer intimacy and relationships, brand, specialization, proximity/latency and thus improved response time, compliance, portfolio synergies, customization support, reciprocity, and the like.
Normally, though, a reduction in price tends to increase demand. In an observation credited to Stanley Jevons, a nineteenth-century economist, the increase in demand can be greater than the reduction in price, leading to growth in total industry revenues.
Data are important assets. So is money. Money and other valuables such as jewelry can be kept under your mattress—a premises solution—or in a bank—a cloud solution. Which has the better security? The bank can afford stronger security in terms of vaults with foot-thick hardened steel walls, and can have a security team made up of security professionals and one or more people on payroll who stay abreast of new burglary strategies and determine and implement counterstrategies.
As Bloomberg Businessweek’s Ashlee Vance quipped, “The ‘cloud’ refers to the amorphous, out-of-sight, out-of-mind mess of computer tasks that happen on someone else’s equipment. For the past five years or so the cloud has been hyped by companies to mean anything that happens on the Web, which is how ‘cloud computing’ came to rival ’social networking’ in overuse.”1
As mentioned earlier a Cloud, may be defined as a service that has the following attributes: Common infrastructure Location independence Online accessibility Utility pricing on-Demand resources3
Although it varies by industry, a good rule of thumb is that IT costs are 4% of revenue. This means that if all IT projects were 50% over budget, there would be a net difference of 2% to the bottom line.
Customer experience improvements can result in lower churn, higher prices due to perceived value-add, greater engagement and higher customer loyalty, greater willingness to repurchase, greater awareness of offline products and services, and thus increased purchase volumes. The cloud can enhance customer experience by providing a richer, more interactive experience, whether it is at the front end—shopping, awareness, solution design—or the back end—installation, maintenance, support, returns.
J.C. Williams Group claiming that buyers often are driven by one or two of four factors, the four E’s: economical (cheaper), easy (convenience), ego (need for status), and experience (enjoyment of a multidimensional shopping process).
measure of the variability or dispersion of outcomes:
measure of the variability or dispersion of outcomes:
Moving to the cloud can enable “de-duplication.” Rather than tens or millions
Deduplication.” Rather than tens or millions of people all maintaining an exact copy of the same content, whether a PowerPoint presentation or the most recent Saturday Night Live on their personal video recorder, say, only one—or perhaps a handful—of copies would need to be maintained in the cloud, subject to legal and regulatory constraints.
Marketplaces existed even before that: In ancient Greece hundreds of years earlier, the agora served as a general gathering place, one of whose uses was as a market.
white papers at http://aws.amazon.com/economics.
Amazon Web Services provides a number of spreadsheets and white papers at http:// aws.amazon.com/ economics.
draw some
 ONLINE “The Value of Utility Resources in the Cloud,” at http:// complexmodels.com/ Utility.aspx, illustrates the cost implications of various capacity strategies relative to differing demand profiles.
Illusory Superiority Dartmouth Tuck business professor Sydney Finkelstein, author of Why Smart Executives Fail, observed that there are two major recurring themes in major business disasters: “the remarkable tendency for CEOs and executives of new ventures to believe that they are absolutely right, and the tendency to overestimate the quality of managerial talent by relying on track record, especially in situations that differ markedly from the present new venture.” 32
ONLINE “The Central Limit Theorem
ONLINE “The Central Limit Theorem and Combinatorics,” at http:// complexmodels.com/ CentralLimit.aspx, “The Value of Aggregation in Variability Smoothing and Peak Reduction,” at http:// complexmodels.com/ Aggregation.aspx, and “The Value of Resource Pooling and Load Sharing Across a Grid,” at http:// complexmodels.com/ Grid.aspx, illustrate the benefits of demand aggregation: reduction in peak capacity needed as well as increased utilization.
Combinatorics,” at http://complexmodels.com/CentralLimit.aspx, “The Value of Aggregation in Variability Smoothing and Peak Reduction,” at http://complexmodels.com/Aggregation.aspx, and “The Value of Resource Pooling and Load Sharing Across a Grid,” at http://complexmodels.com/Grid.aspx, illustrate the benefits of demand aggregation: reduction in peak capacity needed as well as increased utilization.
Computer In some
9/11 or
proportional to n. Finally, Exhibit 24.1(e) illustrates a tree or hierarchical network, whose cost and
