One of the questions I kept getting asked after CA picked up the Cassatt people and assets earlier this summer was "what's Bill Coleman going to do next?" So, I figured, why not ask him to do an interview for Data Center Dialog, and get him to answer that question directly. Bill, always generous with his time, agreed.
I didn't limit my questions to his current activities, though. Bill has run a billion-dollar company, been president of the Silicon Valley Leadership Group, is currently on the Palm and Symantec boards, and has shown up on the cover of Forbes. So there's a wealth of big-company experience there. He has also repeatedly put his reputation on the line in start-up ventures chasing big ideas, so I wanted to get his take on the economy as a whole and his advice for other entrepreneurs right now. And, while I was at it, I couldn't help but ask him a few things about what he might have done differently with Cassatt and where the cloud computing market is in general.
Jay Fry, Data Center Dialog: I saw the recent announcement about your joining the advisory board for 3Tera. What can you say about your work with 3Tera and your thoughts on their market and approach?
Bill Coleman: As you know, I believe that cloud computing will disintermediate all current models of computing over the next decade or so. A key element of this is to be able to migrate existing three-tier applications from their current model to a cloud model. 3Tera has developed a simple solution that can easily address a significant part of these environments. It is a natural complement and starting point to what we were doing with dynamic, policy-based cloud computing at Cassatt.
DCD: What else are you working on that you can talk about now?
Bill Coleman: I continue to explore new options in cloud computing with start-ups such as 3Tera and Replicus. I think the Replicus Cloudplane technology has the potential to re-invent storage by replacing our complex and expensive model with a simple model that uses replication, bandwidth, and commodity storage to replace all the technologies we use today. I am also spending a lot of time delving into the emerging dislocation that will take place as the smart energy grid is built out. Finally, I am trying to help the Committee to Establish the National Institute of Finance gain traction in Washington, DC.
DCD: Given how rapidly the cloud computing market is changing these days (recent examples: the Cassatt acquisition by CA, DataSynapse being acquired by TIBCO, and Amazon’s Virtual Private Cloud announcement for starters), where do you think we are at the moment? How does the technology map to what customers need and want now?
Bill Coleman: Unfortunately, I think that we are still in the "1.0" version of simple, public cloud implementations. These will evolve to support more general applications with more sophisticated data models and interoperability with enterprises over the next five years. Where we are just beginning to see something real is in private clouds for the enterprise. Today, it is mostly a lot of market hype to sell low-end virtualization capabilities and "bulldoze and replace" sales. However, that will change. I do think that companies such as CA have the opportunity to catalyze that part of the market, which will ultimately commoditize the economics of enterprise IT.
DCD: So, you've been "retired" three times now: once after you left Sun, once after BEA, and now after Cassatt. Why is it so hard for you to stay retired?
Bill Coleman: Good question. The answer is that after trying to retire a couple of times before I know what makes me tick a little better than I used to. I am a self-admitted Type-A personality and an extrovert. What that means is that I get energy from stress and I lose energy when I don't have it. So, I am hooked on the adrenalin that comes with passionately pursuing a cause to "change the world" in some small way. For me that has always been in business, so I will be back in the saddle pretty soon.
DCD: I've heard you talk over the years about the "epiphanies" you've had that led to the founding of BEA and then Cassatt. Have you had any epiphanies about what to focus on next?
Bill Coleman: Well, mostly they look like epiphanies in the rear view mirror, but I have a couple of ideas that seem to be coming together. Stay tuned!
DCD: How do you judge whether a market is worth the time, effort, and resources necessary to build a company around and to go after?
Bill Coleman: For me, it is about identifying a market dislocation that is about to begin that can be catalyzed with a technical solution. It has to be something that will present the opportunity for a new entrant (large or small) to undermine the incumbents with a value proposition that brings customers enough value to justify their switching costs. Finally, it has to be something that I can build passion about.
DCD: What do you think Cassatt got right – and what do you think it got wrong?
Bill Coleman: We really got the product right. The "Skynet" version that would have shipped this year was the version 3.0 implementation of cloud -- totally general, global, and a true utility supporting any policy in any heterogeneous environment and spanning clouds arbitrarily. We had two problems: (1) timing. We were too early. Enterprises are not ready for the full cloud model yet. They are still playing with the first baby steps (e.g. virtualization and cloud 1.0 -- Infrastructure- and Platform-as-a-Service); and (2) the way enterprises run their IT infrastructure. The market has become conservative when it comes to taking risk on start-ups with their mission-critical systems. They are still having difficulties even moving VMware into their mission-critical applications.
DCD: What would you do differently if you were starting Cassatt over right now?
Bill Coleman: Well, enterprise infrastructure software is a large-company game now, except for incremental capabilities designed to get enough traction to be bought by the big guys. These companies are the big guys' innovation laboratory. Today I would focus on vertical market dislocations like clean tech or health care. Or I would focus on Web 3.0 capabilities that bring monetization to social networking. Or on a big-play, leveraged buyout of assets to attack the cloud services market for enterprise-scale private-to-public cloud migrations.
DCD: We're starting to hear some positive signs on the general economy. Where do you think the U.S. economy is right now? Is Silicon Valley poised to play a leading role in the recovery or not -- and has that changed since the beginning of the year?
Bill Coleman: I am not an economist, but my gut is that we are at or near the bottom. That said, I think jobs will continue to be lost for another year or two and the economy will take at least five years to climb back to the levels we were at in 2007. I think Silicon Valley will be part of the new economic growth particularly in clean tech, bio and nanotech, and cloud computing. However, I am very concerned that the U.S. is rapidly becoming less and less competitive internationally because of the continued deterioration in education. And I'm worried about the regulatory drift making it harder to attract the best and brightest from the rest of the world and making it harder for a start-up to succeed. Finally, I fear that the negative drift in our tax structure and our trade policies are discouraging new business growth in this country relative to our competitors in Europe and Asia.
DCD: Based upon your experiences and your view of how the economy is faring right now, what advice do you have for the management teams and investors that are working on start-ups right now?
Bill Coleman: Focus on dislocations. Find and build great teams who have a maniacal focus on customer value. This has not changed. What has changed are areas of focus and the ability to monetize their investments. I don't think that the opportunities in traditional computer or communications software and hardware will be as productive going forward, we are now moving toward commoditization of those technologies. The investments there will be mostly incremental capabilities that will end in acquisition, if successful. The areas I see of most interest in technology are what this commoditization will enable: the Web 3.0 "pull" economy, commoditization and consolidation of all ICT services, biotech, nanotech, and the application of IT to transform service delivery in areas such as energy, health care, and -- ultimately -- education.
Thanks for the chat, Bill. I, along with many others, will indeed be staying tuned.