0

A lot of companies are attempting to hitch their wagons to a star these days with a long layover in the Clouds. Big companies like Sun, IBM, HP, Cisco, Amazon, Google, VMware and Citrix are making major financial investments in Cloud culture. Are they chasing rainbows or will they find gold in the silver lining?

I think there's a good possibility that they will find gold--now the question is, how much will they find.

Amazon proved that it's possible to develop, maintain, promote and make a successful cloud-oriented business. Are they making billions from their new enterprise? No. Will they? Probably not. They are running a successful cloud business and making decent money but we'll know more at this time next year when they've had a chance to grow and cultivate the business a bit more.

Is there room for all the other players in the Cloud? Yes.
Will they all make the billions that they now predict? No.
Why not, you ask?
The answer lies with the way these companies have chosen to do business.
Over the past few years, these big companies have turned the IT business into a commodity and transformed custom, personal support into a "beat to fit, paint to match" commoditized version of its former self.

This globalized and commoditized version of computing is following the design of these big companies but it won't pay off the way their business plans foretell.

First, once there are several cloud vendors to choose from, customer loyalty won't exist. Like phone companies, people will change often and look for the best deals because they'll assume all the services and support are the same. For a company to succeed, it will have to separate itself based on support, service levels and--here's the kicker--ability to deliver customized applications and services.
Second, their cheap labor markets will continue to move around the globe until security breaches, service failures and stolen information unravel their ability to survive.
Third, consolidations and buyouts will have customers scrambling to locate new service providers.
Finally, when these big companies realize that their profit margins still aren't large enough to produce the big bonuses they want, they'll scuttle the service and leave the empty shell behind--much like the mortgage business is now.

Cloud computing is poised to become the next "bubble" market with lots of hype, billions invested, maximum leverage and speculation and then the cloud burst.

The solution is to lower your expectations of the Cloud as a business. It will make money but it's going to require major investments in time, labor (highly skilled and well-paid labor) and realistic expectations.

Sorry to burst your bubble but better now than later, don't you think?

Write back and tell me what you think of the Cloud as a business and your impressions and expectations.

3
Contributors
3
Replies
4
Views
8 Years
Discussion Span
Last Post by khess
0

THANK YOU for the first article I've read about 'the cloud' that takes a pragmatic approach over sales/marketing "fluff". Why does this feel like deja-vu? Oh, I remember now:

Cloud Services == SaaS (circa 2005)
SaaS == ASP (circa 1999)

0

I expect someday to understand what the heck the cloud is, and how it's fundamentally different from anything anyone's done to date. I hope my expectations will be met; so far no matter how much I read about it I still don't get it.

0

@bbc1971 - Thanks.

@admoore - The cloud, for a clear definition--free of marketing fluff--read here: The Cloud is computer services, based on virtualization and commodity hardware, to provide unbreakable service (Uptime 99.999%), inexpensively, so that businesses can startup and operate anywhere with enterprise-level efficiency. Uses for the Cloud include: Web-based applications, email, desktops, file storage, backups, software testing, etc.
In very plain English, the Cloud is a datacenter (or multiple datacenters) filled with computers running virtual machines ready to do work for less money than you could do it for yourself. The Cloud makes it far less expensive to start a new business because it removes the tremendous outlay for computer hardware that breaks, ages, depreciates and requires a expertise to run and maintain. Also, it allows your business to be mobile. You can connect to your services from anywhere at any time.

Have something to contribute to this discussion? Please be thoughtful, detailed and courteous, and be sure to adhere to our posting rules.