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.
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.