There’s an interesting argument going on about the business-structure futures of the Big Cloud that everyone assumes is in our future. Some links in the chain: Hugh Macleod, Tim O’Reilly, Nick Carr, and Tim again. A few points about this seem obvious; among other things, Amazon Web Services is reminding me powerfully of Altavista.
Here are a few things that I think are true; the last section gets back to AWS and Altavista.
Monopolies Don’t Require Lock-in · Google has (effectively) a monopoly on consumer search. They have no lock-in; anyone who wants to can switch their default search provider in a few seconds. One could write a book, and several people have, about how they maintain their grip on the market, but let’s skip that and just see this as an existence proof.
Which is to say, history tells us that Hugh Macleod’s vision of a single insanely-huge cloud provider is perfectly believable.
Low Barriers to Entry Win · We should have learned this by now. You don’t have to look back very hard at recent decades to see examples of technologies which have become pervasive even though, when they started catching on, they weren’t nearly as good as the competition. The reason is, they were easy to learn and easy to deploy. I’m thinking, just for example, of Linux and PHP and HTML.
My sense is that the effortless-deployment threshold for the Cloud is somewhere below the effort required for AWS’s EC2/S3 combo; perhaps something like what a smart modern PHP-hosting service provides.
Economies of Scale · I don’t think they’re that big a deal. To play in this game, you’re going to need a few tens of thousands of servers, bulk-bandwidth deals with key carriers, and multiple data centers on the ground in North America, Europe, and Asia. That’s really expensive to build. But once a provider has got past the basic threshold, I’m unconvinced that their cost per unit of service is going to drop much as they get bigger and bigger.
My take-away is that the big Cloud operator doesn’t necessarily need to be a Microsoft or a Google or an IBM. There are multiple pathways by which an unheralded startup could end up on top of the heap.
CIOs Aren’t Stupid · They’re bearing the scars of decades of being locked-in by Microsoft on their desktop software, and by Oracle on their databases; the situation where your infrastructure vendors gain control over part of your budget.
So you can bet that as larger outfits take a strategic view of cloud computing, they’re going to be appropriately paranoid about barriers to exit. There’s going to be a powerful demand for standards and for demonstrated interoperability.
A Historical Analogy · To me, the cloud-computing landscape feels like the Web search landscape in 1996. Back then, Everybody who’d thought about it had clued in that this was going to be really interesting and useful. There had been a few offerings, much better than nothing but not really hitting a sweet spot. [Disclosure: One of them was me.] Then Altavista launched and it was clearly better than anything else. Meanwhile, Larry and Sergey were at Stanford thinking about transitive functions over the graph of Web hyperlinks.
Amazon Web Services smells like Altavista to me; a huge step in a good direction. But there are some very good Big Ideas waiting out there to launch, probably incubating right now in a garage or grad school.
Such an idea doesn’t have to come from a big company. And it doesn’t have to be proprietary to grow fast and dominate the landscape. It has to have no aroma of lock-in, it has to be obviously better, and most of all, more than anything else, it has to be really, really easy to get started with.