A few days ago, I had a conversation with a friend of mine who told me something shocking: a particular cloud company's gross margins on cloud products are below -40%. That is not a typo, it is minus 40% or worse. Essentially, the company is doing one of: burning investor money; running down their own cash reserves; borrowing from banks or the market; or subsidizing from other business lines. Whatever the method they are using to stay afloat, they are burning quite a hole.

Knowing how to outsource a process is challenging enough, and requires serious operational management and help, but does not involve making strategic decisions. Conversely, knowing when to outsource is far more challenging, as it involves making decisions with imperfect information about the future. Caveat: Use this as a starting point, a framework, but do not use it as your sole decision-making process. Get serious help; we are here. The Why There are only two reasons why you should outsource something.

Two months ago, I posted an article about a United Airlines series of failures that, if not so painful for their paying customers - and their employees too - would be laughable. Yesterday, I had the pleasure of reading an interview with the legendary Gordon Bethune, who turned around Continental Airlines in a single year, from a loss of $600MM in FY1994 to a profit of $225MM in FY1995.

What do you do when you want to move towards more rapid deployment, perhaps as close as possible to continuous delivery, but the culture and incentives push against it? This is the exact issue I have had at several clients over the years. When brought in to improve their operational performance, I found that, with all of them, a major issue was instability due to deployments. The flow looked something like this:

In our most recent article, we explored why "true cloud" really matters: it has a significant impact on: Your gross margins Your speed As a company providing technology services, as opposed to products like software, you cannot get cloud-scale gross margins and speed - and therefore valuations - unless you are operating as a true cloud. Today, we will look at a different set of advantages to running your service as a true cloud: how nimble you can be.