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Frankly Speaking 9.24.19

by Frank Wang
   
 
A weekly(-ish) newsletter on random thoughts in tech and research. I am an investor at Dell Technologies Capital and a recovering academic. I am interested in security, blockchain, and cloud infrastructure.

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LET'S BE FRANK

The past two weeks, I've been discussing my frustrations around how certain terms like SaaS and cloud have been misused. It pains me as a technologist. The terms imply certain benefits for customers, and using them incorrectly confuses and misleads them. It also misleads investors into what the company's revenue multiplies should be. The most egregious example recently is WeWork classifying themselves as a tech company when they lack the benefits of a tech company.

Last week, the Forbes Cloud 100 list for 2019 came out, and I talked about what a cloud company is. To summarize, the cloud allows a company to outsource their IT infrastructure management. A cloud company helps facilitate the usage of the cloud. Every week, I will be talking about one or two companies on that list that I don't believe should be classified as cloud companies and why they shouldn't be.

This week, that company is Rubrik, which is in the top 10 on Forbes Cloud 100 list. To clarify, all I'm claiming is that Rubrik isn't a cloud company. I think it's a great business and has great products, but just not a cloud company. I know this might shock some people, but there are great businesses, which aren't cloud or tech. 

Why is Rubrik not a cloud company? Rubrik claims to be a "cloud data management" company. In reality, they provide data resiliency. In other words, they are a backup company. They make it easy for you to recovery from data loss regardless of whether your company uses on-prem, public cloud, or hybrid cloud. The main reason I believe they aren't a cloud company is that it's not a core part of a company's cloud operations. Sure, backups are important, but a company is not regularly pulling data from Rubrik's cloud. If a company is, they have serious IT issues since most companies shouldn't have to access their backups that often. 

A simple way to think about Rubrik's relation to the cloud is the following: say I have an apartment in Boston. If I visit my apartment in Boston once a month, do I live in Boston? In this analogy, Boston is the cloud. Of course, the argument is that it really depends on the definition of "live." My argument is that calling Rubrik a cloud company is really pushing the definition of "cloud." If Rubrik is a cloud company, then every tech company is a cloud company because it uses the cloud. Similarly, not every company that uses tech is a tech company.

The word "cloud" implies certain technical characteristics, and we need to make sure we are using the term properly. Otherwise, it becomes meaningless and confuses customers. 



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Disclaimer: * indicates a Dell Technologies Capital portfolio company or company that I have economic interest in. I am an employee of DELL and own stock directly in AAPL, GOOGL, and WMT. All opinions within are my own and do not reflect those of my employer or any people or groups with whom I am affiliated.

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