Note: I will use new formatting technique in this post. Instead of posting the complete blog in the body area and leaving the comments section for the readers. I will post part of the content in the comments area and enable you to comment separately on each part of the blog by replying to the comments. Please read my previous post The shortest path to creativity to read about the origins of this technique.

The cloud business is booming. The trend started in 2006 with Amazon EC2 announcement. At the beginning most analysts were skeptical thought that it is Jeff Bezos’ Risky Bet. On the other hand, Shai Agassi from SAP was quoted on March 2007 saying: “[it is] the most important industry development in the last 10 years”. While Larry Ellison from Oracle On September 2008, still asked “What the hell is cloud computing?”. To be fair to Larry Ellison, he shouldn’t be blamed for missing the cloud. After all, he also completely missed in-memory rational database, which unlike cloud computing at the time, is core to his business 😆

What was almost impossible to predict just few years ago is common knowledge by now.

Everybody can list some incremental benefits of the cloud architecture to the on-premise architecture. It is faster, cheaper, easier, and alike. But can we also think of transformational evolution due to the cloud? Can the cloud enable business models that were not viable before the cloud?


Neils Bohr once said, “it is very difficult to predict — especially the future.”. Never the less, we will give it a try.

The cloud stack is constructed from 3 different types of Cloud Computing services commonly referred to as Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). In this post we will stack it a bit differently: The hardware layer, the data layer and the process layer.


Reviewing a concept from a different point of view enables us to make new observations which were not possible using the standard definitions.

Now for the fun part: Please move on to the comments section below to read about each of the cloud layer and my prediction for evolution in this space.


Like the layer that you think is more likely to evolve in that direction.


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6 Comments

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  1. Itzhak Shoshan Post author

    Hardware Layer

    Definition: Unlimited computing power, immediately available, for short or long term.

    New Business Model: Launch services that are applicable for very short time frame and requires large computing capabilities.

    Example: Live stream sports stats and analytics information to mobile smart devices of fans during March Madness series (college basketball game series during March).

    Why: One time opportunities or seasonal businesses are very problematic for on-premise architecture as they requires huge investments that are unutilized in the off season period.

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  2. Itzhak Shoshan Post author

    Data Layer

    Definition: Store large amounts of information, from multiple organizations, using similar database schema.

    New Business Model: Share aggregated data from all customers hosting their data on the cloud to the other customers on essential topics which they don’t compete on.

    Example: share payroll data per role to enable each company to benchmark their payroll expense against the industry and adjust where needed.

    Why: On-premise architecture make it harder to share the data since each company leverage different database schema and different master data information. While cloud model, provide this functionality instantly at no investment from the participating sides.

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    1. Peter Russo

      Hi Itzhak, very interesting post… For this example, wouldn’t you say this is already happening for SAP customers with the Ariba Network? Since they essentially are tapping into a large pool of vendors? Helping to lower priccing through a highly competitive bidding process?

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      1. Itzhak Shoshan Post author

        Hi Peter,

        Thank you for your feedback. I agree that with Ariba network SAP is making a step in the right direction and could potentially leverage the gathered data for new innovative information based offerings.

        From my knowledge, today with Ariba Network SAP mainly facilitate B2B transactions. If for example, SAP will leverage the data gathered in the network and analyze demand and supply for a certain domain and make suggestions to the vendors based on this analysis that would be a great new offering.

        To be specific, if SAP will analyze demand and supply for database administration services and will find out that there is a great demand for in-memory database expertise while there is decreasing demand for no-sql database expertise it could suggest to the vendors to re-skill their employees.

        Without SAP control of the network, no one would see the big picture and could understand the trend.

        Thanks, Itzik

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  3. Itzhak Shoshan Post author

    Process Layer

    Definition: Execute best practice processes for multiple industries, across multiple value chains.

    New Business Model: Orchestrate processes across companies along the value chain.

    Example: We can take the coffee supply chain as example. Managing the complete value chain from the agricultural phase till the retail coffee shops phase on a single cloud with cross companies integration can streamline supply and remove complexities of managing international businesses.

    Why: The on-premise architecture can deliver good b2b integration which is costly and typically quite limited. Having the processes executed at the same cloud leveraging similar best practices can streamline execution and simplify the collaboration across different companies at different geographies.

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