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In the Perezian sense, as the fervor and hype of a technology revolution gives way to a new technological paradigm – a new order, if you will, to the way in which we perceive and do things – there is tremendous disruption among the supply chain participants across entire industries. Within this disruption there is equally tremendous risk and potential reward. It is this change process within which we often refer to clichés phrases like ‘survival of the fittest’ and ‘the crème rising to the top’, etc.
Without a doubt, cloud computing – or the idea that I can get all the computing power whenever I need it, wherever I need it, scale up and down on demand paying only for what is consumed – is going mainstream faster than anyone expected. And you don’t need to consult Gartner or Forrester to figure it out. Just tune in to any NFL football game on the weekend and spot the slick new IBM advertisement on TV! (I felt like calling my Mom in Canada and asking her to tune in, since she’s been asking me for five years exactly what it is I do for a living!).
Mainstream media advertising aside, the real impact of cloud computing is still developing and will be for a while now.
As methodologies and best practices for IT deployment align with fundamental technological changes (such as that represented by the idea of cloud computing), empires built on old-world processes and systems can come crumbling down. Witness the profound directional changes dumped onto companies like Microsoft in recent years. The existence of companies like Amazon and Google, purveyors of all things cloud, and Salesforce, the grand poobah of SaaS, have literally forced the largest software maker on the planet to change its direction completely or risk its prestigious 30 year reign of relevance to consumers. I’m not one of the Chicken Little pundits that think Microsoft’s days are numbered. Far from it. But the changes coming from MSFT these days are arguably like none other in its history.
At 6fusion, we see four critical groups in the supply chain that will live or die with the sea-change of cloud computing. Those groups include:
- The Channel (IT Service Providers)
- The Network Providers (ISP, Telecoms companies)
- The Hardware Manufacturers (Dell, HP, IBM, etc)
- ISVs (Independent Software Vendors)
Here is what I find amazing about these four groups: The pendulum for the next several years will be wild and dramatic. Embrace change and potentially ride a revenue wave like you never thought possible. Resist change, and leave your fate to chance. Maybe I need a bit more excitement in my life, but I personally think a front row seat to this action is the best ticket in town! Here are just a few of the major league questions facing industry stewards:
- Managed Hosting Providers and purpose-built SaaS companies want to own the end user customer relationship. The cloud represents the biggest disintermediation threat in recent memory. How will the modern IT Service Provider stave off the biggest threat since Dell’s direct model in the 1990’s?
- The network is the most commoditized resource in cloud delivery. As the role of the modern network provider changes, some of the big telecoms firms have decided to become cloud service providers in order to reach beyond the packet for revenue. What are the risks inherent with Telco’s playing in the cloud space? How can Telco’s and ISPs leverage their position as a key raw material component of the cloud to position themselves for a more profitable future?
- The days of competing on logos and laurels are dead and buried. In a new world where the purchase and supply of hardware is being driven by ROI, footprint reduction, more support for less money and hyper-efficient supply chain logistics, will the big iron shops be agile enough to compete? What are the implications for the big firms that decide to inter the cloud computing service fray, going head to head with other market entrants, possibly even existing clients?
- SaaS is clearly the future business model for the delivery and licensing of business-value software. But two facts remain: 1) getting there takes a complete overhaul of legacy systems, the kind that represents massive strategic shift and 2) the world is full of legacy systems, contrary to the hype cycle in the industry. Where is the bridge between the old order and the new order for software companies and how will they cross it?
Most that know us know our technology is beginning to play a key role in the future direction of these supply chain participants. We develop technology with an eye for making computing simpler, which removes proprietary silos that only serve to slow down the realization of a world where cloud computing methodologies are included in standard deployment best practices for IT.
Over the next several weeks I plan to dedicate some blog space to each of these core groups and unfold a bit of what 6fusion has been up to as we continue our quest to deliver the promise of this new technology to the widest audience in the cloud.
The long awaited Microsoft Azure pricnig model was announced recently. For a while I really thought Microsoft would use its fashionably late arrival to Cloud Computing to build upon the short comings of other vendors and maybe take advantage of the opportunity to establish a leadership position in Cloud Pricing. Alas, yesterday I discovered that Microsoft will instead add to the confusion when it comes to Cloud Pricing. Here is a snippet of what they announced:
Azure pricing is a disappointment on three counts:
- It isn’t true utility or consumption computing pricing because the customer will not end up paying for what they actually use. Compute and Storage hours are a mistake because it presumes the full consumption of compute unit for any part of 1 hour. The customer doesn’t realize it but they are paying for computing resources they aren’t necessarily going to use. This is the hidden margin for players like Microsoft and AWS. While the customer watches the left hand, the right hand is busy taking money right out of the customer’s pocket! This pricing model is the equivalent to the old salami banking scam. Take fractions of cents from a billion accounts and think nobody will notice.
- It will not support the migration from legacy operating models to cloud operating models. I’ve written about this phenomenon before, but it seems like the big cloud players are dramatically out of touch with the average customer. This pricing model means nothing to the customer but a bunch of numbers. How does this pricing model translate to what the average customer doe today in their enterprise?
- There is absolutely zero predictability. And if there is, it sure as heck isn’t simple enough. Can someone tell me what the cloud will cost me for 15 .Net applications I have built before I get an actual invoice from Microsoft? Hold on, let me call my MIT laureates and Actuarial PHd’s to do some predictive billing!
I will say that Microsoft, unlike a lot of other cloud platforms on the market has smartened up to the fact that they need to account for Storage Transactions. Storage transactions can be the silent killer of cloud computing infrastructure. The only problem of course is understanding what that means to my application. How the heck do I know how this translates to a real world operation?