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.
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 this video through Zeb Dropkin’s blog. (Side-note: I went to high-school with Zeb.) Very simple explanation of what Google Wave is, and some of the benefits. No, I do not have any invites to give.
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.
I have focused on enterprise IT, which is really slow and boring, since I graduated from Business School. It is fascinating to me when I find posts about consumer (social) media and Internet development that draws comparison to what I have been focused on. I really like John Eckman’s blog posting, The Assembled Web: Notes Toward a Manifesto.
9. Consumer Technology is beating Enterprise IT, and soundly. If your “in-house” IT can’t compete with a consumer-grade provider available “on the web” you need to catch up and compete or concede the function.
John’s point is relevant, in my experience, when looking at collaboration tools in the enterprise IT space. Providing access to appropriate collaboration tools is something that most companies fail at miserably. Sure, there are companies out there (typically product and marketing) that have very formal workflow and collaboration tools. But the majority of companies that don’t require highly specialized software, consumer technology is a decade ahead of the enterprise collaboration tools. You can recognize the problem when your employees use AIM and spend their time on Facebook and Gmail.
The coming round of consumer technology is going to change the way that people work. If you look at the features of Google Wave, which include file sharing/workflow/collaboration, you can see how it will be leveraged in the workspace. I am not predicting a whole-sale shift to Google for the enterprise, Enterprise IT moves at a snail’s speed. However, I agree that enterprise IT managers should concede the function, with increased competitiveness in mind, to those service providers who do it best.
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.
I edited this video using all open source tools. Avidemux and Cinelerra to be exact. The source was a Flip Mino HD.
There are some things that I need to figure out still, but it isn’t so bad. Of course, there is nothing that can prevent me from making ridiculous titling mistakes – the wedding was actually on 9/19, not 9/21.