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.
Comment feed for ongoing:
From: Rob (Oct 27 2008, at 16:32)
You forgot the part about it having to be really extremely cheap.
Big companies aren't where the real money is, it's small businesses and individuals whose only CIO is their teenage nephew. Basically, I think there is a tipping point, between a possible minimal benefit and writing the whole investment off.
If you are right and there aren't substantial economies of scale, it is hard to see how the thing will take off.
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From: Gilbert Pilz (Oct 27 2008, at 16:58)
So where does Salesforce figure into your analysis? They seem to be going great guns, but their platform and languages are obviously designed to ensure maximum lock-in. Clearly the CIO's of the companies writing checks for Salesforce seats can't be *that* leary of lock-in. What am I missing?
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From: Tom Altman (Oct 27 2008, at 18:28)
As far as Salesforce, I think it is a pay now or later thing. I think they give you the low barrier to entry - but the price you pay is your stuff is locked in a platform.
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From: John Hart (Oct 27 2008, at 18:43)
I think two of your points (lock-in = bad; AWS=AltaVista) contradict each other.
When you compare AWS to AltaVista, I assume you referring to just how low-level AWS is - bare machine instances whose lifecycle is best thought of as ephemeral. When you use AWS, you are still thinking about the underlying hardware (although the ephemeral lifecycle does enforce a healthy rigor in your scaling approach).
There isn't a ton of lock-in with Amazon - if your system doesn't use the other AWS services (S3, SQS, SimpleDB) then it's fairly straightforward to move your deployments to some other hosting environment.
I think you would argue that, to the extent that cloud providers move away from the AWS model by providing higher levels of abstraction, those other providers become "better" and less AltaVista-like.
But, any movement along that dimension seems to go hand-in-hand with increased lock-in. If Cloud Provider X is giving me this magical hosting environment whose abstractions free me from thinking about machine instances ala AWS, while also giving me significantly more flexibility and power than Google App Engine ... that strikes me as a proprietary set of features. Cloud Provider X's future depends on marketing these features as *differentiations* from the current offerings, while avoiding lock-in is all about sticking to a lowest common demoninator to avoid differencess amongst providers.
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From: Kevin Hutchinson (Oct 28 2008, at 02:11)
I think the amount of lock-in you get with Amazon can be reduced simply by running layers on top of EC2 and S3 to de-Amazon your cloud API.
For example, you could probably run Sun's Project Caroline code on AWS. If so - then where's the lock in? You could be running anywhere with anyone.
So, I'd use the analogy of AWS being like writing C, whereas we'd all like to write Ruby instead (with C bindings, Java bindings, whatever, doesn't matter).
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From: Paul Morriss (Oct 28 2008, at 02:13)
I wonder if there's a sweet spot between cPanel and AMIs which will enable the new Google to emerge.
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From: Bruce (Oct 31 2008, at 09:00)
just as an FYI... "Lock In" is not a cloud or internet phenomenom. Any IT platform, private, public, cloud, or otherwise carries with it that same baggage. SAP, Oracle, Microsoft Server, etc all represent platform "locks" that are harder and more costly to undo the more you advance them in your environment. Any Technology Platform Committment is a big deal, regardless, and proper planning and due diligence need to be performed before any decision is reached. Unless of course the effort is considered R&D and no long term expectations are made.
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From: BillSaysThis (Nov 10 2008, at 16:40)
Another axis of consideration is tooling. RightScale and others have made a business simplifying Amazon usage but Microsoft promises even greater ease of use by putting Azure tools into Visual Studio and Aptana (http://www.aptana.com) recently launched Aptana Cloud, which integrates deployment and management tools right into Eclipse.
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From: Dave Walker (Nov 12 2008, at 13:47)
Given the way I view the world, I just need to know more about what "The Cloud" is supposed to be, so that I can ruminate on how (and indeed, if) it can be secured.
Right now, from what I've seen so far, I'm worried.
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