Cloud Computing on Ulitzer

Bessemer Venture Partners (BVP) announced the release of its updated guidelines "Bessemer's Top 10 Laws of Cloud Computing and SaaS." The material can be found in a condensed form as an Op-Ed in the Sandhill.com newsletter and in its entirety on BVP's website at www.bvp.com/cloud. Byron Deeter and Philippe Botteri, co- authors, will also present the material at Salesforce.com's Dreamforce conference next week.

Deeter, Botteri, and the BVP Cloud team define the expanded Cloud computing space as incorporating not only Software as a Service (SaaS), but also the newer segments Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). While SaaS is currently the largest, most lucrative, and best-known of the segments, the other two are experiencing hypergrowth and are becoming increasingly important in the Cloud landscape.

Running and succeeding at a Cloud business requires a different approach from that used in traditional software. The 10 Laws include:

1. Less is More - leverage the cloud everywhere you practically can.
2. Trust the 6Cs of cloud computing--build a reliable CEO dashboard to monitor the business.
3. Study the Sales Learning Curve and invest behind success - only add more salespeople when the sales model has been proven.
4. Forget everything you learned about software channels - the internet is your new channel and Technology Enabled Service providers are among the few partners that actually care if you succeed.
5. Build employee software - employees are now powerful customers, not just their managers! We are witnessing the "Consumerization of Software" so focus on ease of use.
6. Savvy online marketing is a core competence - if you are a cloud business, your sales prospects are online by definition. Become an expert at online marketing to reach them!
7. The most important part of "Software as a Service" is Service - support, support, support!
8. Leverage and monetize the data asset - the data hosted by a SaaS provider can become a valuable asset if harnessed appropriately
9. Mind the GAAP! - Cloud accounting is all about matching revenue and costs to consumption...well, except for professional services!
10. Cloudonomics requires that you plan your fuel stops [financing] very carefully.
    

Bonus Law: While one or two of these laws may be violated, very few companies succeed if they ignore three or more. Great companies innovate, but pick your battles!

"These laws are the product of hundreds of conversations that the partners of Bessemer have had with Cloud executives from our past and current portfolio companies, as well as other leading public and private Cloud companies," said Deeter. "We hope that you can benefit from some of these best practices we've learned through the years and these "laws" can help you run your Cloud business more effectively."