Blog Entry

Mar 25
2011 

The Importance of Data in the Cloud

Software companies that start life in the cloud (pure plays) have advantages over those established in the on-prem world.  One of the most important advantages is the ability to know – at any time – exactly how the service is being and has been used.  And, arguably more importantly, how that has changed.  On-prem ISVs don’t have the same advantage.

This knowledge can be used to drive a number of activities.  All of which are available to on-prem – but are just harder to get and are always less real-time.  “Harder to get” and “less real-time” translate to more expensive and less competitive.

If you are a Marketing person – then you love data.  Data reveals patterns that often show things that counter our assumptions.  In my career I have heard many assumptions made by business people about a certain trend, product, relationship, feature etc… all to have been proven wrong when looking at the data.

Correct understanding of situations can then lead to surprising innovations.  Innovations that focus on benefits derived through observations are always better than innovations that are based on assumptions.

Consider yourself in the position of having a full and feature rich product that sells at a high price point.  You know that offering a lower price point will increase revenues – but you don’t want to cannibalize your existing offering.  Without data you have to make assumptions regarding the pattern of usage that drives your customer base and your prospects.  You either face missing a lucrative new market opportunity – or risk losing significant revenue based on flawed assumptions.

Data is key – capturing and using it is vital – for all companies.  But the cloud guys have an edge here.  Weirdly – over the last 2 years – almost all of the cloud guys I have spoken to don’t capture, measure and trend this data in a reliable way.  That must be because they didn’t think about it in the rush to go to market… well – that’s just my assumption.

Additional Resources:
If you are interested in more information on usage data collection best practices in the cloud I invite you to check out some of resources listed below: