The WSJ posted a story yesterday that explores a similar topic. I had not read that story when I posted mine yesterday morning. But the theory is the same: small-businesses will benefit from reduced capital costs.
The real beneficiaries of the trend towards Cloud Computing (if there is such a thing) are the small to medium size businesses (SMBs). I suppose I should start by defining Cloud Computing as IAAS, PAAS, or SAAS with a measure of Utility Computing.
Several decades ago, before the emergence of computing, if you wanted to start a new business and you had to set up an office to accommodate your employees. The office would have staplers, desks, lamps, etc. You might have wanted to get a mimeograph machine as well. These were all things that could be leased or purchased.
Over the last two decades, there have been rapid changes in the amount of computing resources needed to perform office duties. If you wanted to set up an office, you needed to purchase or lease computers. In addition, you needed to purchase licenses of software, hire expensive technicians, etc. The capital costs of opening an office skyrocketed. And you still needed to purchase a mimeograph machine, which they were calling a “photocopy” machine.
Out of this shuffle, there is now a general consensus about core hardware and software that is needed to successfully open a new office. For example, we know that each employee will have a computer with monitor, email, internet access, a word processor, a spread-sheeting program, etc. If you didn’t have the latest version of these software programs, you couldn’t do business with suppliers, partners, and customers.
So now the technology and bandwidth is available to host these office applications securely at a central site, and to provide employees with on-demand access to it. If you want to think about it another way, you can have someone else lease the package as a service. In addition, you can lease thin clients, and get the same services at lower monthly cost. This dramatically lowers the capital investment needed to open a physical office. You’ll probably still have to purchase staplers and lease a scanner or photocopier.
The true effect of Cloud Computing is to lower the cost of business for SMBs. Why SMBs? Because newer, smaller organizations will be better positioned to embrace this shift. They have the most to benefit, since capital costs for computing would have previously consumed a far greater percentage of their resources. Because of the complexity, older and larger companies will find it much harder to embrace this Cloud Model. Also, larger companies already have established IT budgets and it consumes far less as a percentage of their resources. Lastly, there is a false consensus that control over IT resources results in security or advantage.
There is a good article on Reuters where Monty Widenius talks about Oracle and MySQL. There is a quote that caught my attention:
Widenius said that while the code could be easily copied, the main problem was the ecosystem around MySQL — companies making business from it, developing it and using it. “If it would be easy to fork (copy) it, no-one would have paid a billion dollars for it.”
It isn’t a revolutionary concept. However, it illustrates the point that the real value of Open Source projects is not the code, but the community and ecosystem around the project. Growing the community and eco-system should be the primary function of a company that “owns” an open source project, since that is where the long-term value is. This in turn drives adoption and revenues.
Massachusetts has weathered the downturn pretty well. The unemployment rate is at 9.3% right now, which is under the national unemployment rate average of 10.2%. However, the New England Economic Partnership is predicting many more job losses for the state.
The Massachusetts economy will shed tens of thousands of jobs over the next year with the unemployment rate peaking near 10 percent around summer, according to a forecast released today. – Boston.com
On the bright side, one of the economists quoted in the article believes that homes are at their most affordable since the mid-1990s.
I am really shocked by this report that pension plans, for executives, are on the rise in the US. The report says that executive pensions grew an average of 19%.
Executive pensions grew even though the share prices at the firms dropped an average of 37 percent in 2008, while many companies froze employee pensions and suspended contributions to retirement plans, noted the newspaper.
In 1980, 35.9 million private-sector workers (46 percent of all private-sector workers) were covered by a pension plan. (source).
For non-executives, you are considered “lucky” if your company offers a match. According to this article, about 69% of all employers offer a 401k match.
The NYT cites that about 8 percent of companies have eliminated the 401k match during the downturn. The same article talks about what to do if your company has eliminated the 401k match.
My company recently decided to move their Help Desk functions overseas. Previously, these were all located in Provo Utah. Our conversations over IM used to be short and sweet. This is my most recent conversation with our new offshore help desk.
(02:35:10 PM) Sal Darji: hi, are we having problems with teamsite?
(02:35:25 PM) HelpDesk2: Thank you for contacting the IS&T service desk. My name is Rio. How may I help you please?
(02:35:36 PM) HelpDesk2: i understand your concern sir
(02:35:48 PM) HelpDesk2: we are currently having an outage on the teaming website
(02:36:09 PM) HelpDesk2: what we can do for now is that i will create a ticket
(02:36:21 PM) HelpDesk2: a team is already taking care of the situation
(02:36:25 PM) Sal Darji: ok
(02:36:46 PM) HelpDesk2: we will inform you soonest on any developments to correct your issue
(02:37:21 PM) HelpDesk2: let me provide you with a ticket for reference and a specialist shall contact you through email
(02:37:35 PM) HelpDesk2: please wait for the incident ticket thank you
(02:37:38 PM) Sal Darji: ok, thanks!
(02:38:34 PM) HelpDesk2: please provide me with your contact number and novell email address
(02:39:11 PM) Sal Darji: shouldn’t you already have that?
(02:39:35 PM) HelpDesk2: this is just for update and verification sir
(02:39:46 PM) Sal Darji: <>
(02:39:53 PM) Sal Darji: <>
(02:40:17 PM) HelpDesk2: HDnnnnnnn this will be your ticket number sir
(02:40:26 PM) HelpDesk2: hope to resolve your issue soonest
(02:40:29 PM) Sal Darji: ok, thanks
(02:40:53 PM) HelpDesk2: your welcome is there anything else that i may assist you?
(02:40:59 PM) Sal Darji: no, thats it, thanks!
(02:41:37 PM) HelpDesk2: ok your welcome , we will keep you posted for more updates and development on the current issue thanks and have a wonderful day
I am in Singapore this week for business. Because of my limited access to the Internet, I will not be able to blog consistently.
We parked in one of the many car parks in the city today, and I noticed that the parking structure had a sensor above each spot. The sensor allows the car park to know what spots are open. Open spots have green LEDs. In addition, a board announces the number of open spots on each level.
I noticed this when I was in Europe too. It strikes me as odd that I have never seen this type of system in the US. There may be a few in the US that have this system, but it it isn’t that common.
I found an interesting piece, a paragraph really, in the NYT while reading some of the Xerox/ACS post-deal coverage.
The services shift is driven by both financial and strategic motives. Services businesses tend to be steadier sources of revenue and profit than product businesses, which move more closely in line with economic cycles. Services businesses also foster closer relations with corporate customers, and often yield higher profit margins.
Although services can yield higher profit margins than physical products, they definitely have lower margins than software. As an enterprise software vendor, we have to watch our revenue mix pretty closely to make sure that our margins are not reduced by a large services revenue stream.
However, it is necessary for enterprise IT companies to have a services arm that provides coverage of the product portfolio. The NYT understates this as “Services businesses also foster closer relations with corporate customers.” The enterprise IT market is driven by partnering, deal-making, and face-to-face schmoozing and sales. This is why enterprise IT companies have well-compensated salespeople and business development personnel on staff. By having persistent services personnel at your client’s physical location, you have a cheaper source of sales revenue.
Computerworld is reporting that Larry Ellison and Oracle won’t spin-off MySQL.
“No, we’re not going to spin it off,” even if asked to by the EU, Ellison said. The EU is concerned about Oracle simultaneously owning MySQL, the leading open source database, and its own Oracle enterprise commercial database.
What I found to be even more interesting is the way he is dismissing Cloud Computing. In a time where many companies are embracing the cloud, and management thereof, Ellison is focused on the basics – databases, operating systems and hardware.
“Cloud computing is not only the future of computing, it’s the present, and the entire past of computing is all cloud,” he said. The cloud still requires components such as databases, operating systems, and memory, said Ellison. He pointed out the seeming absurdity in which cloud computing previously was called the Internet, software as a service, and on-demand computing.
He seems to be embracing almost all aspects of the Sun acquisition, including flash storage.
Via Spatially Relevant and John Eckman I found this slide deck that goes through a brief overview of Strategy. Authored by Marc Sniukas.
