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20090802 Sunday August 02, 2009

Business Models in Consulting, Contracting and Training

Since leaving Technorati last spring, I've been working independently with a few entrepreneurs on their technical platforms. This has mostly entailed working with tools around Infrastructure-As-A-Service (AWS), configuration management (Chef and RightScale), search (Solr) and learning a lot about programming and going into production with ruby and rails. I've spoken to a number of friends and acquaintances who are working as consultants, contractors, technical authors and trainers. Some are working as lone-wolves and others working within or have founded larger organizations. I'm always sniffing for where the upside opportunities are and the question that comes to my mind is: how do such businesses scale?

A number of technology services companies that I've taken notice of have been funded in the last year or so including OpsCode, Reductive Labs, Cloudera and Lucid Imagination. I think all of these guys are in great positions; virtual infrastructure (which is peanut butter to the chocolate of IaaS), big data and information retrieval technologies provide the primordial goo that will support new mobile, real time and social software applications. They are all working in rapid innovation spaces that hold high value potentials but also new learning and implementation challenges that rarefy specialized knowledge.

Years ago when I was working with Covalent Technologies, we tried to build a business around "enterprise open source" with Apache, Tomcat, etc as the basis. Packaging and selling free software is difficult. On the one hand, offering a proven technology stack configuration to overcome the usual integration and deployment challenges as well as providing a support resource is really valuable to Fortune 500's and such. However, my experience there and observations of what's happened with similar businesses (such as Linuxcare and SpikeSource) has left me skeptical how big the opportunity is. After all, while you're competing with the closed-source proprietary software vendors, you're also competing with Free.

The trend I'm noticing is the branching out away from the packaging and phone support and into curriculum. Considering that most institutional software technology education, CS degrees, extended programs, etc have curricula that are perpetually behind the times, it makes sense that the people who possess specialized knowledge on the bleeding edge lead the educational charge. Lucid Imagination, Cloudera and Scale Unlimited are illustrating this point. While on-premise training can be lucrative, I think online courseware may provide a good answer to the business scale question.

For myself, I'm working with and acquiring knowledge in these areas tactically. Whatever my next startup will be, it should be world-changing and lucrative. And I'll likely be using all of these technologies. Thank goodness these guys are training the workforce of tomorrow!


( Aug 02 2009, 08:57:08 PM PDT ) Permalink