Computing is undergoing yet another seismic shift from client-server architectures to cloud computing. The move to the cloud is driven by dramatic improvements in both the agility of software applications and economies of scale that can reduce the costs of corporate computing by as much as 10X. In turn, this is creating a massive explosion in data as large companies start to exploit the new, low cost computing platform (the so-called ‘big data revolution’).
In the 1990s the move from mainframes to client-server computing swept away much of the ‘old guard’ and created several new companies that are now household names, including Apple, Microsoft, Oracle, Dell, SAP and EMC. The Internet era continued this evolution with the growth of Google and Amazon. The move to cloud computing promises to create just as much disruption and we believe all of the current incumbents are trying to figure out how to avoid obsolescence and win a major share of the new market opportunities.
However, the incumbents always struggle to innovate quickly enough through internal R&D in such periods of rapid change. It is our belief that this creates tremendous opportunities to start new companies and exploit the powerful mandate within the deep-pocketed major players to acquire new products and technologies. For example, EMC recently announced that it has allocated $3bn for ‘big data’ acquisitions in the next twelve months and is set to invest up to $100m per year through its new venture group.