Butterfly.net Snags Game Deal With Sony

from the one-big-customer dept

Last year when IBM and Butterfly.net just launched I was skeptical. They hyped up the “grid” aspect, when it seemed like just a normal datacenter (for gamers) to me. Things had been pretty quiet on the Butterfly.net front since then, but now they’re heating up again as they’ve

signed a deal with Sony to host online games for the Sony Playstation 2. As Butterfly.net points out this will increase their user base “exponentially”. Certainly good news for the folks at Butterfly.net, but I wonder if they’re going to suffer from the “one big customer” effect. Other big name customers may stay away (have to differentiate, after all) while Sony will demand more and more attention – knowing that Butterfly.net can’t afford to lose them as a client.

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Comments on “Butterfly.net Snags Game Deal With Sony”

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Mike (profile) says:

Re: No Subject Given

No. Of course it makes sense to go after the big players, but you need to do it in a way that makes sure you can keep growing your business.

I’m speaking from experience on this one, having worked at a startup that spent so much time trying to land that “one big client”, that we started to ignore and neglect all of our regular clients. Then, once we landed the big client (in a deal that didn’t bring in much money, because we cut our rates to land that client…) they kept demanding stuff of us.

The question is, have they bitten off more than they can chew?

If you’re in a business where more than 50% of your business is from one client, you are entirely reliant on them. I was just pointing out the risks.

Anonymous Coward says:

Re: Re: No Subject Given

Have they bitten off more they than can chew ? No. I believe like most companies in this or any other business, you eventually have to start landing the bigger clients to keep prospering. How successful you are will depend on how well you continue to support your smaller clients while nuturing the bigger ones. In almost all cases, the more big clients you get, the more your small clients are going to suffer. IF you execute properly, you’ll keep both. If you don’t, you hope to keep growing your large customer base (cause face it, it’s easier to manage one large account than several small ones). And if you really screw it up, you’ll lose both sets of customers which is often the case with many a start up.

A lot of the big boys, started small, got big and now could give a damn about small / mid-size deals (except now where they’re scratching for any loose change because the economy sucks). Do you really think the DELL’s, IBM’s, Microsofts, etc of the world care about the 50 man shop/company ? They probably feel it costs them more money to keep the relationship than completely severe it. And in reality, it may.

If BF.net does grow and forget teh small players, someone will recognize it as a business opportunity and pick it up. Stimulates the economy, etc.

BF net then is in the position of having to stroke Sony while looking for the next big hit.

Business. Not for the meek. Not for me.

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