I've had a series of interesting conversations with people involved in cloud computing who, paradoxically, maintain that cloud computing is-at least today-inappropriate for enterprises.
Stories by Bernard Golden
Clayton Christensen's book, The Innovator's Dilemma, is a touchstone here in Silicon Valley. His book examines the process of innovation as it attempts to answer the question "why do most new technologies seem to come from startups and not from established companies that are also familiar with the technology?" He cites many markets as examples, including tube table radios (displaced by transistor radios), cable-driven steam diggers (displaced by hydraulic diggers), and disk drives (where successive waves of technology were represented in shrinking form factors) that brought new companies to the fore at each new wave. In each of these markets, according to Christensen, innovation shook up the established way of doing things and propelled new market entrants past companies that had dominated the previous technology.
Forrester has just released a report outlining the CFO-ish benefits of cloud computing. The report, entitled "Talking to Your CFO About Cloud Computing," is aimed at communicating the benefits of cloud computing to him or her. (Someone a bit more cynical than me might say a companion report, to help you communicate cloud computing's benefits to a CIO, is in order as well).
Microsoft unleashed a new cloud computing ecosystem at its recent Professional Developers Conference event, even though most observers chose to focus on more obvious, though less important, aspects of its announcement.
Recently the SDForum, a Silicon Valley-based technology and business incubator, hosted an all-day Cloud Computing Symposium. If the presenters at the Symposium are to be believed, cloud computing represents an infrastructure revolution, moving infrastructure use from a capital expense to an operational expense and cutting the overall cost by at least 90 percent.
Gartner echoes my posting on Cloud Virtualization. Except they haven't got it quite right -- they don't quite reach the logical implications of their statements.
As I noted last week, Gartner calls cloud computing the next big thing. I characterized the ability to move from talent-constrained, capital intensive data center management to inexpensive, pay-as-you-go cloud infrastructure as too logical to be denied. Oh, there will be plenty of FUD spread about the cloud's shortcomings, but there was plenty of FUD about today's current champions when they first got started. New things always look risky compared to what you're now using -- because you've internalized its risks, while the new solution's risks are front-of-mind.
In reading this month's Wired Magazine (not yet online unfortunately) I found its article about the new Red digital movie camera fascinating. Based on a new chip, it shoots at very high pixels and can execute enough shots per second to compete with film. Moreover, it has the ability to selectively focus part of its picture while leaving other parts fuzzy, a technique used in every movie to focus the attention of the viewer. Plus, it cost 10 percent of what less-capable digital movie cameras cost, as well as less than one month's rent for a Panavision camera.
Gartner released a report last week on 2008 IT spending that spotlights the next big thing: "per-use service-based models." This is a catch-all term that subsumes both cloud computing and SaaS. According to Gartner, "The projected shift to cloud computing, for example, will result in dramatic growth in IT products in some areas and in significant reductions in other areas."
Recently, both SAP and Oracle announced significant (20 per cent) price increases in their offerings: SAP on maintenance fees, and Oracle on license fees. The numbers are significant: Oracle now charges $47,500 per processor for a database license. These increases fly in the face of what is happening to pricing in other digital goods, viz music, telephone calls, etc. In those markets, digitization and digital distribution have caused end user prices to plummet, to the point of industry disruption and a dramatic change in how the goods are paid for -- some companies now allow you to pay with your time, in the form of listening or watching advertising, instead of your money.
There's more open source in the enterprise than most people think. And there's data to back that up. Two weeks ago, at the O'Reilly Open Source Convention, O'Reilly Radar released a Report, written by me in partnership with O'Reilly Research titled "Open Source in the Enterprise."
"No matter who you are, most of the smartest people work for someone else" -- Bill Joy, co-founder of Sun Microsystems.
I was at OSCON (the O'Reilly Media Open Source Convention) this week and saw the desktop of the future -- and Microsoft should be scared.
There's an (unintentionally) funny article in BusinessWeek online, bewailing the tough business circumstances that SaaS (and open source) face. From the opening paragraph:
Despite the angst earlier this decade that every technical job in the country would be sent to Bangalore, today's US tech employment picture is actually quite different. According to an article in CIOinsight, US tech employment has reached an all-time high of 4 million people, with a tech unemployment rate of 2.3 per cent.