Yesterday, I was talking about PLM vendors buying stakes in infrastructure companies to develop more reliable and cost effective cloud PLM offering. If you missed my article check it out here . Earlier this morning, my attention was caught by PC mag article – Dropbox Is Moving From the Internet to a Private Network. While everyone else seems to be moving from private cloud to public cloud, Dropbox decision can be strange. But here is an alternative view.
The problem Dropbox is trying to overcome is the bottlenecks and slowdown present on the increasingly complex internet. You can’t always guarantee the speed of a connection due to factors outside of your control, so Dropbox intends to bypass them completely with a worldwide private data network separate from the public internet, which it has been working towards since 2015.
Article gives an interesting data point about cost of taking off the public internet network. Here is the passage:
Critics are scratching their heads as the majority of services are moving in the opposite direction. However, Dropbox is generating a profit, according to CEO Drew Houston, and networking costs have been cut in half outside of North America thanks to this shift. If the company can complete a worldwide private network insulated from the internet while remaining profitable, those critics will soon change their minds and applaud Dropbox for a risky move ultimately paying off.
It made me think Dropbox experiment is an interesting reference for PLM companies thinking about future of cloud PLM and cost optimization. The vast majority of PLM implementations today is still on premise and private hosted environments. Public cloud such as AWS can produce more affordable solution if combined with multi-tenancy. However, what if Dropbox idea of private networks has legs? It can be especially interesting for CAD / PLM companies trying to optimize file-based traffic between desktop and cloud environment where transfer of large CAD files can provide significant impact on performance.
Update 22-June-2017.
Future thinking about private networks made me think that some clarification is required. As the article stating Dropbox users won’t see any changes in communication between Dropbox and their computers. At the same time, Dropbox itself will be use more speedy network, which might be also more cost effective. Which brings the need to differentiate between internal communication using private networks and last mile communication using public internet. I wonder how these multiple networks will live together and companies will be able to leverage their existence.
End update 22-June-2017.
What is my conclusion? Current trend is an increased presence of public cloud environment in enterprise software. But it looks like Dropbox engineers are trying to prove something else and take it to the next level with private network optimization. The idea is neat and can resonate with demands of large enterprise organizations looking how to work in isolated, but global environment. Dropbox is on track for $1B annual revenue for 2017 and it is compatible with revenues of CAD/PLM vendors. So, it possible to think about private networks coming as part of CAD/PLM offering. And if it will be a cost saving, it can unlock future growth of cloud-PLM business. Just my thoughts…
Best, Oleg
Want to learn more about PLM? Check out my new PLM Book website.
Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.
Pingback: GHZ Partners | IT Services, Software()