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ethics Guide

Cloudy Profit?

Alliance Partners (a fictitious name) is a data broker. “Bart, what are we doing here?” Shelly, the partner in
You’ll learn about data brokers in Chapter 9, but for now, charge of sales and marketing, is challenging Bart Johnson,
just know that such companies acquire and buy consumer Alliance’s managing partner.
and other data from retailers, other data brokers, govern- “What do you mean, Shelly? Don’t you like it here?”
mental agencies, and public sources and aggregate it into “I love it here. So does my husband. But I also know we’re
data profiles of individuals. Alliance specializes in acquiring paying $15,000 a night to rent this island!” Shelly rubs sun-
and analyzing market, buyer, and seller data for real estate screen on her hands as she talks.
agents. Alliance sells an individual profile to qualified real “Well, we don’t have the entire island.” Bart sounds
estate agents for $100 to $1,500, depending on the amount defensive.
of data and type of analysis requested. “No, I guess not,” she says. “They have to let some of the
Alliance is owned by three partners who started the busi- staff stay here. We’re the only paying customers . . . the only
ness in 1999. They endured tough times during the dot-com nonlocals.
collapse at the turn of the century, but crawled out of that “But,” Shelly continues, “that’s not my point. My point
hole and were doing well until they encountered severe rev- is, how can we afford this level of expense? We’ll pay nearly
enue shortfalls in the 2008 real estate collapse. In late 2008, $200,000 for this meeting alone. Where are we meeting
in order to reduce operational costs to survive the downturn, next? Some five-star resort on the moon?”
Alliance transitioned its data storage and processing from its “Look, Shelly, as you’re about to hear, our gross margin
own Web farm to the cloud. The elastic flexibility of the cloud last year was 74 percent. We’re a money machine! We’re
enables Alliance to improve the speed and quality of its data swimming in profit! We can’t spend money fast enough.
services at a fraction of prior costs.
Furthermore, using the cloud en-
abled it to reduce the in-house
hardware support staff by 65
percent.
The partners meet twice a year
to review their financial perfor-
mance, evaluate strategy, and plan
for both the next six months and
the longer term. In 2008, in the
midst of their revenue shortfalls,
they met in a small suite in the lo-
cal Hamilton Inn, ate stale dough-
nuts, and drank watery orange
juice. This year, they’ve rented a
facility in the British Virgin Islands
in the Caribbean. The following
conversation occurred between
two of the partners at the onset of
this year’s meeting:
Source: Eunikas/Fotolia

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