As an avid user of my GoPro (Hero3 Black Edition) and a huge fan of GoPro user videos on YouTube, I’ve been watching the IPO of the company today with great interest as I am a big fan of investing in companies and products that I am a customer of. However, the most interesting thing about the process for me has been learning how GoPro perceives itself. They have positioned themselves as a media company, not a camera company, with 2.8 years of crowd sourced media that they can utilize to generate revenue. It is a very forward looking way to develop their company’s value, by deciding to monetize all of the user videos created with their cameras through a branded channel and selling advertising.
I do find some parallels between this approach and how Cloud software companies are creating their value. By leveraging a common datacenter for their customer base (economy of scale for infrastructure, support, and physical resources), while these Cloud companies are perceived as software companies (much as GoPro is perceived as a camera company), they are actually generating a substantial portion of their revenue as “infrastructure” companies. Utilizing their economies of scale on the infrastructure side, they are creating the great savings for their customers but also generating increased software revenue for themselves. It is a financial “win” for everyone involved, assuming that the Cloud software can adequately meet your business needs, as the customer realizes savings on the infrastructure side while the Cloud company realizes profits while providing it.
Much as GoPro cameras are not replacing all cameras, with Cloud software it comes down to using the right tool for the right purpose. While a vanilla implementation of Cloud software can be a cost effective investment, it only makes sense if it meets your business needs. In our next blog, we will contrast Cloud and On-Premise software implementations and considerations in ensuring you invest in the “right tool for the right purpose”.
Here is one of my favorite GoPro videos on YouTube, which still blows my mind and gives me vertigo on a large monitor! Enjoy.