Blog: It’s time for cloud leaders to start reporting with useful and better metrics, writes GigaOM founder Om Malik. We agree.
Om Malik, all-round cloud guru and founder of Gigaom.com, has penned an eloquent blog post this week calling on cloud computing leaders, such as Amazon Web Services and Google, to offer more transparency in the way they’re reporting their cloud revenues.
Titled ‘Why cloud business needs better metrics’, I can’t help but fully back Om’s view. Part of our job as reporters is to cut through the noise and marketing coming from technology leaders to provide our readers with an honest and accurate point of view of who’s doing what and how well they’re doing. But it’s almost impossible to do that when the companies themselves are not willing to play ball.
It’s understandable, up to an extent, why giants like Amazon, Microsoft, and Google are keeping their cards close to their chests. Cloud has been a pivotal technological shift and holds the key to future success. With the market set to be worth some £13 billion by the end of this year, there’s gold to be had in them there hills.
Malik argues that, whilst revenues and margins are key metrics, there are still more ways companies can report on their businesses. It was last year when cloud leader Amazon Web Services started reporting earnings for its business. Microsoft, with Azure, has also started revealing its earnings, but because they’re lumped in with Microsoft’s other ‘intelligent cloud’ services, it’s hard to judge precisely how well it’s doing.
Malik writes: “I think is time for the industry to come up with a standardised set of growth and usage metrics from those who say they offer cloud services. In order to qualify as a public cloud service provider, the company should offer compute, storage, networking and memory in a flexible, on-demand basis and allow for fractional payment.
Malik proposes five new metrics that he thinks need to be reported on. Total storage capacity (with quarterly growth), total compute capacity (with quarterly growth), total number of developers using the platform, total i/o volume so we can see the amount of data going back and forth between the services, and finally the total number of platform-owned apps.
Those are all excellent metrics to judge the size and growth of a company, but dangerously transparent for those who seem to be bluffing their cloud credentials (Malik alludes to IBM’s press release prowess but lack of actual impact).
But even if we don’t get those metrics, there’s still the simple task of reporting the basics.
“It is time for Microsoft, Google and Amazon cloud to report: revenues per quarter, gross margins per quarter, per customer quarterly revenue,” Malik writes.
“So far we have not asked companies to report these metrics, and as a result we have an ambiguous understanding of the market and the landscape. It is time for the three leaders — Amazon, Microsoft and Google — to step up and set the standards.”
We wholeheartedly concur. Take the veil off your business, and you might just gain the respect and attention from customers to understand not only what you offer but how you’re offering it. It’s scary, but someone has to start.