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Archive for the ‘amazon’ Category

Amazon has 70-80 percent of E-Book Market?

Posted by Bob Warfield on August 3, 2010

Great article by David Carnoy, and thanks to Techmeme for putting me on to it.  That statistic, if true, is amazing for Amazon.

Some of the other things said really rang true.  For example, that despite the publishers (with Steve Jobs help) having run roughshod over Amazon to drive up e-book prices, customers are voting with pocketbooks:

We have definitely seen a shift. We have data for the last 15 years on books. And since some of the publishers have decided to price their e-book above $9.99, we’ve definitely seen a shift of customers going to e-books that are $9.99 or less. The good news for them is that the selection of those books is very dramatic. We have about 630,000 books that are not public domain titles and of those 510,000 are sold for $9.99 or less. Of The New York Times best-sellers, 80 of them are $9.99 or less. So customers are voting with their pocketbook…

That’s so true in our family.  We wait for the books to come down in price and meanwhile plenty to choose from at lesser prices.  It’s something of a pity Amazon’s recommendation engine doesn’t let me just tell it to leave out anything over $9.99.

Meanwhile, there was this great article about coffee shops and restaurants banning computers and eBooks.  It’s bad enough to see that happening in an enlightened city like NY, but ridiculous in the heart of Silicon Valley.  Yet, the prohibition against computers at lunch was very much in effect the last time I was at University Cafe in Palo Alto.  No matter, customers will vote with pocketbooks there too.  Shameful to do that in the Valley, though.  Just embarassing.

Posted in amazon | Leave a Comment »

Is the Open Stack Cloud Announcement a Big Deal?

Posted by Bob Warfield on July 19, 2010

Open stack MIGHT be a big deal, it awaits adoption to see.

In discussions with the Enterprise Irregulars, the question came up of whether it was a good analog to view Open Stack as the “Android” to Amazon’s “iPhone” (where is their antennagate?).  This is an interesting metaphor as much for what it tells us about where it doesn’t fit as where it does.  It is a good analog to Android in the sense it gives a lot of helpless hosters a shot at the Cloud much as Android gives helpless handset makers a shot.  Similar to the Android, a lot still depends on how well the handset guys do their part, how many great apps wind up on the platform, and on how well the market likes the combined offerings.  Substitute “hosters” for handset guys, and let the other two stand when talking about Open Stack.

I can’t emphasize the point that there is more here than just the Cloud Software.  This goes to the essence of Software as a Service.  It isn’t just software, it’s the whole Service.  In a related discussion, someone came out with the line that SAP ByD was “real but maybe not cost effective.”  ByD has been plagued by delay and the company has said the delays where because the architecture could not be delivered for a low enough cost.  Clearly SAP can write an ERP system.  But just as clearly, a SaaS system that works, but is not cost effective is not a SaaS system at all because the service can’t be delivered.  It’s the sound of one hand clapping.  Yet, a lot of otherwise reasonable folks just can’t fathom that distinction. 

The inability to fathom the difference with the hosters may fall to the other side.  SAP gets software, but apparently not delivering it as a service.  In some sense, there may be a lot of data center providers who understand how to deliver a service, but not a Cloud.  This is why I am harping on all that it takes beyond the software to get it right.  Amazon has clearly gotten it right, and while many argue it is very early in the Cloud market, yet their momentum gets harder and harder to catch as each day passes by.  I look to Salesforce.com as an example for where we are in the market.  Not long ago they passed $1B in revenues.  That’s a big accomplishment for a SaaS company, yet not really big at all for a Software company.  Does anyone really believe they can catch Salesforce at CRM?  Even a really big company?  The EI’s, who argue it is early yet for SaaS ERP, and hence okay for SAP to be so late, hold up Salesforce as an example of too far ahead for SAP or Oracle to catch.  For those that argue it is very early in the Cloud, consider:

–  Amazon will be at $1B (apparently critical mass for SaaS CRM) in the not too distant future.  Can a competitor get it together and grow fast enough to keep that gap from going over $1B with Amazon?  If $1B isn’t the danger zone, what is?  How long did vendors like DEC let the IBM PC gain momentum before it was too late to catch them?  How long did the PC have multiple operating systems before Microsoft’s advantage was too great?  None of these are exact analogies, but there is a critical mass.  If it is reached without meaningful competition, Amazon has won until the next paradigm shift and their opportunity to succumb to Innovator’s Dilemma.

–  Unlike the Android metaphor, Rackspace ain’t no Google.  It lacks the resources on both the marketing and the development side to build the buzz and build the innovation that Android has.  Strong Brownie points for invoking NASA, BTW, for your buzz side.  Lots of us geeks still love the space program.  Not clear we love NASA for what has happened to it though.  Or, as I am fond of saying, “We can no longer fly supersonically as civilians, put men on the moon, or get through an airport without removing our shoes.  Progress?  What progress?!??”

–  Also unlike Android, it really isn’t clear why Open Stack is great.  Open ain’t enough, particularly with a group arguing that Amazons APIs ought to be a standard and Amazon continuously innovating and cutting prices while many can’t seem to even get in the game.  If the Amazon API is available from more than one vendor, it starts to be pretty open.  Rackspace wants to spark up the “avoid lock-in by choosing us debate“, but pre-Open Stack, Rackspace was the one locking you in more than Amazon.  I guess this is a great example of Jean Louis Gasee’s admonition that if you can’t fix it, feature it (great article on antennagate, BTW).

Ironically, after I published the blog post on Amazon API’s becoming a standard, and hearing a great hue and cry about all the things it couldn’t do, Amazon launched a whole raft of new features.  Cluster Compute Instances, in particular, offer the ability to couple servers in a low latency subnet for cluster computing.  It’s pitched as being all about making Cray-Supercomputers-On-Demand available to all comers (some cool ideas about what I’d do with that!), but ironically, the low latency is exactly what a lot of the detractors of Amazon-API-as-Standard said couldn’t be done.  I know Amazon didn’t build it in response to my blog’s comments (LOL!), but I chuckle at how it came out a couple days later and is focused on exactly the problem being complained about.

BTW, sorry for the OT, but read this guy James Hamilton’s blog for lots of good scoop on scaling and data center architecture.

Getting back to the Rackspace Open Stack announcement, there is a lot of nervousness in the Not-Amazon-But-Wanna-Be-Cloud-Kings herd.  It’s understandable.  Not much to point to for scale in the Cloud world but Amazon.  Concerns that it may be running away with the show.  Concerns that the early decision to wait for someone else to figure out the Cloud because we can always jump in if it looks real enough may have been a bad decision (that Innovator’s Dilemma is a B*atch to face!).  There is an interesting post on GigaOm about VMWare looking ahead to the day when server virtualization might not matter because of Cloud Computing.  That’s an ideal line of thought for VMWare CEO Paul Maritz.  After all, his alma mater Microsoft was always worried back in the day about who might “Microsoft” them.  Of course it happened anyway, multiple times and I personally think they did it to themselves by thinking of the problem as holding on to existing markets at all cost.  Innovator’s Dilemma strikes again.

Nevertheless, the herd is restless.  You can smell the fear.  Open Stack is a good response, at least it is something, and from a company that actually is in the Cloud.  As I said in the beginning, it will be a function of how well the Kieretsu cooperate.  Cloud Computing, like SaaS, is holistic.  Barney partnerships can’t make it go.  If the partners aren’t pretty darned good at working together, this announcement could simply turn out to be one of those frequent bits of “the enemy of my enemy…” desperation marriages of convenience we see so often. 

It’s all about how much wood they can get behind the new arrow.  If I had to make a prediction, it isn’t a Big Deal for the Cloud.  It will largely give the “Private Cloud” (which isn’t the Cloud, but that’s another post) new ammunition without affecting Amazon much at all.

Bears close watching.  Good times for customers in Cloud Computing–we love competition!

Posted in amazon, cloud, data center | 5 Comments »

Amazon Web Services: The De Facto Cloud API?

Posted by Bob Warfield on July 12, 2010

Read a couple of posts last week that coalesced some thoughts I’d been having into this one.  First was the fascinating rumor about a Google EC2 clone.  Hat tip to High Scalability Blog for putting me on to this one.  The second was James Urquhart’s musings about the desirability of the Amazon API’s as a standard.

James and most of his commenters are worried that we might standardize on something that doesn’t have all the bells and whistles.  Guess what guys, standards NEVER have all the bells and whistles.  By the time people get done arguing about them and they get enough momentum and use to be more than just standards in name, the world has moved on.  So what?  If we waited for standards to be perfect, we’d would have none.  The point of the standards is that they’re good enough to help reduce friction in areas where innovation at every turn is no longer desirable.

Are we there yet with the Cloud?

I think so.  I’m not saying there is no innovation left to do–there is tons of it coming, and it’ll all be good.  But, there is value at this stage in having a standard too.  There has been a lot of success demonstrated with the Amazon Cloud from companies large and small.  I would be curious to hear whether Amazon thinks their API should be a standard (and whether they’re prepared to give up some control in exchange), or whether they think it still has too much growing up to do. 

I look at it like this:

First, the wonderful thing about standards is there are so many to choose from.  Just because we annoint Amazon as one such standard does not mean there can never be others that are completely different.  It does not mean the standard can never have a superset or optional features to cover many of the cases Urquhart raises.  And remember, there is still that period of making it into a standard during which it can be molded a bit before it settles in.

Second, speaking of supersets, I think it is important to think about Cloud Standards as a layered model.  I would definitely not put all of Amazon’s offerings into the standing.  Perhaps just EC2, EBS, and S3.  Note that S3 is spreading even more rapidly than EC2 as a de facto standard.  These three seem pretty benign, reasonably abstract (meaning they don’t expose too much ugly detail about what goes on underneath), and reasonably proven.

So what do we get for it?

If the standard works and matters, we get a lot more vendors supporting the standard.  That’s a good thing, and something I have to believe every Amazon Web Services client would very much like to see happen.  The second thing we get is that some, but not all, of the innovators will quit trying to reinvent the wheel that is the Amazon layer (IaaS if you must use an ‘aaS name for it) and they will move on to other layers.  Depending on how much more innovation you think that layer needs, this is a good thing.  For those that think it is a bad thing, there is still time for someone with a better mousetrap to put it out there and show us.  But what if making it a standard causes a ton of innovation around how to solve some of the problems like I/O bandwidth behind the scenes without affecting the API?  Wouldn’t that be an excellent thing?  Heck, I’d love to be able to add an “11” to the AWS I/O speed control, who wouldn’t?

But time is a wasting.  For whatever reasons, it seems like the other players are very late to the party relative to Amazon.  If they wait too long, Amazon gets a de facto standard before the market has much leverage to pry loose some control.  This is arguably what happened around the IBM PC, DOS, and Windows.  BTW, you read that like its a bad thing, but it wasn’t.  We accomplished a heck of a lot by not having to continue innovating over the bus, the BIOS, and so on.  It just could’ve been a lot better if there hadn’t been so much control vested in Microsoft and IBM.  As I write this, I wonder a little bit if players like Google really aren’t taking too long.  Maybe AppEngine is the exact image of what they think the Cloud should look like, and the problem is the world just didn’t bite the way they have with AWS.  Google could be saying, “Okay, we hear you, so we’ll do it your way now.”  There has to be some reason they’d endorse S3 and potentially EC2. 

If Google’s ready to go there, why not the rest of us?

Posted in amazon, cloud, Open Source, platforms | 10 Comments »

Amazon Stealing the Cloud

Posted by Bob Warfield on May 17, 2010

I saw a spate of recent articles that had some pretty amazing statistics and news bits on Amazon Web Services and competitors.   In no particular order:

–  A survey of 600 developers by Mashery reported that 69% of respondents said Amazon, Google, and Twitter were the most popular API’s they were using.

–  Even the Federal Government is turning to the Amazon Cloud to save money.  Sam Diaz reports the move of Recovery.gov will amount to hundreds of thousands of dollars.  We found tremendous savings at Helpstream from our move to the Amazon Cloud.

–  Derrick Harris at GigaOm suggests its time for Amazon to roll out a PaaS to remain competitive.  As an aside, are you as tired of all the “*aaS” acronyms as me?  Are they helping us to understand anything better?  BTW, I think the move Harris suggests would be the wrong move for Amazon because it would lead to them competiting with customers who are adding PaaS layers to Amazon.  They should stay low-level and as language/OS agnostic as possible in order to remain as Switzerland.  Let Heroku-like offerings be built on top of the Amazon infrastructure by others.  Amazon doesn’t need to add a PaaS and they don’t need to add more value because they’re afraid of being commoditized.  As we shall see below, they are the commoditizers everyone else needs to be afraid of.

–  Amazon and Netflix jointly published a great case study and announced Netflix would move more infrastructure into Amazon’s Cloud.  I had a chance to talk to the Netflix folks early on about their Amazon activities.  Smart people.  Amazon needs more big organization and big brand case studies to accelerate their Cloud dominance.  Big loves to follow what Big does.

–  A wonderful post on CNet talks about Goldman Sachs’ findings for the Cloud.  There were a ton of them including:

          – A ranked list of apps moving into the Cloud.  Web Conferencing and Salesforce Automation were #1 and #2.  No surprise.  Accounting and Billing were #3, which I found a big surprise, but it only makes sense, especially for billing.   This was one of the fastest growing categories as well.  A lot of discussion among folks I talk to has centered around the idea that particularly accounting might be the last to go because there is little value add, the data is sensitive, yada, yada.

          – The majority of SMB’s now have a “SaaS first” policy, they prefer it.  This was only surprising to me as a blanket declaration.  I had seen first hand that SaaS companies no longer spend much time convincing customers, “Why SaaS?”  The market is way past that stage.  Many of the respondents to Goldman’s survey indicated they were using SaaS in this economy for TCO reasons, to save money.

          – And now the Amazon bits:  Amazon.com is used by 67 percent of the survey respondents. It is clearly the out-in-front leader, despite being a “newcomer” to enterprise IT. For internal clouds, VMware’s leadership remains pronounced, with 83 percent of respondents using its virtualization technology.  Platform-as-a-service layers are gaining momentum, dominated by Amazon’s Elastic Compute Cloud, or EC2, service, with 77 percent of respondents choosing EC2 as a preferred partner, well ahead of Google.  These share numbers are why the title of this post is that Amazon is stealing the Cloud.  They represent remarkable share and momentum.  They also reflect that, much like SaaS, the world is less and less worried about whether to embrace the Cloud and more and more getting on with it.  The weak economy has really accelerated these trends due to the perception that SaaS and the Cloud are big money savers.

–  UK firm Netcraft finds that the Amazon Cloud hosts 365,000 web sites.  Evidently a number of firms have discovered that web hosting is a great commodity use for the Cloud.

–  PC World asks why Amazon doesn’t charge more for its service.  They conclude that AWS is looking to build economies of scale and set low prices that act as a barrier to entry for new competitors.  Like I said, Amazon isn’t afraid of being commoditized for they are the commoditizers.  Even if they kept their prices fixed, and they keep lowering them, Moore’s Law as well as economies of scale would enable them to deliver the service at increasingly profitable margins.

What does it all mean?

If nothing else, Amazon has a pretty amazing lead over other would-be Cloud competitors.  And they’re building barriers to entry of several kinds:

–  Nobody but Amazon has the experience of running a Cloud service on this scale.  They can’t help but be learning important things about how to do it well that potential competitors have yet to discover.

–  There is a growing community of developers whose Cloud education is all about Amazon.  Software Developers as a group like to talk a good game about learning new things, but they also like being experts.  When you ask them to drop their familiar tools and start from scratch with something new you take away their expert status.  There will be a growing propensity among them to choose Amazon for new projects at new jobs simply because that is what they know.

–  Economies of Scale.  Consider what kind of budget Amazon’s competitors have to pony up to build a competing Cloud infrastructure.  A couple of small or medium-sized data centers won’t do it.  Google already has tons of data centers, but many other companies that haven’t had much Cloud presence are faced with huge up front investments that grow larger day by day to catch up to Amazon.

–  Network effects.  There is latency moving data in and out of the Cloud.  It is not significant for individual users, but it is huge for entire applications.  The challenge is to move all the data for an application during a maintenance window despite the latency issue.  However, once the data is already in the Cloud, latency to other applications in the same Cloud is low.  Hence data is accretive.  The more data that goes into a particular Cloud, the more data wants to accrete to the same Cloud if the applications are at all interconnected.

It’s going to be interesting to watch it all unfold.  It’s still relatively early days, but Amazon’s competitors need to rev up pretty soon.  Amazon is stealing the Cloud at an ever-increasing rate.

Posted in amazon, cloud, saas | 17 Comments »

Netflix’s Movie Cloud is Moving into the Amazon Cloud

Posted by Bob Warfield on May 7, 2010

Netfllix has always been an extremely progressive company.  I know the founders, Marc Randolph and Reed Hastings well, and many of the employees too.  There is an amazing amount of brainpower behind the scenes there and it shows with their great products and great story.

I read with interest Larry Dignan’s piece about their usage of Amazon Web Services to move key parts of the Netflix infrastructure into the Cloud.  It doesn’t seem that long since I remember being asked to visit Netflix and tell them about my company’s experience moving into the Amazon Cloud.  I expected to meet in Reed Hasting’s office with perhaps a couple of people, but was surprised to find they had assembled a small auditorium of developers to hear the story.  I spent a little over an hour telling them how we’d done it and answering questions and then went away.

As an aside, this is how smart companies go to school–by sharing information broadly rather than hoarding it at the top, and by bringing in outsiders who can add to the collective knowledge pool.  When was the last time your company did something like this?  It’s so easy here in Silicon Valley, which is dense with sharp insights and hard-won experience.  Take advantage of it, it’s the least you can do after paying the high cost of living here!

I admit, I wondered whether they’d carry it off or even get started, or whether they were just curious.  Moving to the Cloud is a big step for a big thriving company.  There are a lot of moving parts that have to be orchestrated for it to be successful.  But as I said, they are an extremely progressive company with a lot of very bright people.  Color me very impressed with the speed at which they were able to move.

Cool beans!

PS  Amazon has a press release / case study with more detail on just what Netflix is doing.

Posted in amazon, cloud, ec2, saas | 2 Comments »

To iPhone Or Not To iPhone, That is the Question

Posted by Bob Warfield on April 21, 2010

Apple’s strategy towards Adobe Flash drives me nuts.  There’s yet another flurry of posts about it as Adobe officially abandons further work on Flash for the iPhone.  Adobe hints they’re going to be more Google Android focused according to Sarah Perez, and there have certainly been all the right rumblings in terms of a good connection between Google’s Chrome browser and Flash called “Flash Embrace“.  Honestly, these Apple moves are getting a bit too Orwellian.  The new developer agreement that sparked all the controversy reads, “Applications must be originally written in Objective-C, C, C++, or JavaScript as executed by the iPhone OS WebKit engine…”  So they’re basically killing a whole raft of development possibilities, not just Flash.  Clearly their objective is total control under the banner of ensuring a consistently high quality experience.  But the reality here is that this will lead to total monopolization and monetization for Apple

I had to chuckle when Steve Jobs painted himself as the underdog out to help publishers avoid the total domination of Amazon’s Kindle (hat tip to Techmeme for finding that NY Times post).  Doing no evil?  Hardly.  Helping book publishers force Amazon to raise Kindle book prices to help his own iPad get more control?  Absolutely!

Developers and many onlookers, for the most part, are fairly outraged.  There are a few that seem to think it’s a good idea what Apple is doing, but it almost sounds like they’re sucking up to Apple, dislike Adobe, or have some other axe to grind.  GigaOm is starting a series about the whole topic:  Open vs Closed: How much is too much?

Speaking of axes to grind, I have one too.  I’ve written a little application for the CNC machinist’s world called G-Wizard.  For a variety of reasons, I wrote it in Flex, which was well-suited to the job.  It turns out this application would be extremely handy to have in your hot little hand while you’re trying to operate the machine tool on the shop floor.  I’ve gotten scores of requests from users who want an iPhone port.  And in fact, Flex would be the perfect vehicle for this.  G-Wizard already runs seamlessly on PC, Mac, or Linux with no extra effort on my part.  It is delivered over the web and brings new data to itself from the web.  Think of it as a minimal SaaS application (I may write some posts on how that works if there is interest).  Flex’s ability to morph screen layout would be ideal for making it a First Class application on an iPhone.  Unfortunately, Apple is going to arbitrarily make it impossible for me to make my users happy. 

Most of the chatter about Flash versus HTML 5 focuses on its use for video, but my Flex application is a completely different case.  Flex is a mature development platform and HTML 5 is a long way from that.  What are the alternatives?  Writing it in Objective-C, C, or C++ is just out of the question.  I know those platforms well, and they would make it much harder to build G-Wizard.  Javascript would be extremely cumbersome too.  None of those tools would be as productive as Flex, and each would require a total rewrite of the application.

Can I borrow a page from Adobe and just focus on the non-iPhone Smart Phone world?  I guess I could, but so far I have had many requests for an iPhone version and no requests for, say, an Android version.  I run Google Analytics on my web site, and it provides a nifty report of mobile visitors.  It turns out that 84% of my mobile users are using an iPhone, iPad, or iTouch.  Sure, Android is growing like crazy, but its got a long ways to go to catch the iTsunami that is here today.

It looks like I’m stuck suffering the slings and arrows of outrageous Apple behavior.  Rats!

Posted in amazon, apple, business, saas, strategy | 5 Comments »

10 Things You Don’t Need to Do In the Clouds

Posted by Bob Warfield on May 25, 2009

Sometimes a breakthrough paradigm shift eliminates the need for all kinds of things.  Word processors and laser printers killed a lot of other things that were once thriving including typewriters, liquid paper, and Linotype machines.  So it is with the Cloud.  When I chat with my Director of Operations at Helpstream, we’re always chuckling about how much better life is in the Amazon Cloud for our company.

As I read through unread blog posts with Google Reader, I’m going to note 10 things we don’t need to worry about since we’re in the Cloud:

1.  NetApp’s new DataDomain data de-duping product.   NetApp bought a company with a cool technology.  Plug it in place of you tape backups and you can backup to hard disk because this thing eliminates redundant data–sort of a very backup-savvy compression algorithm.  But if you’re in the Cloud, who cares?  Your Cloud vendor worries about this stuff.  You just buy it by the gigabyte, as much as you like, and do whatever.  Backup already looks like it is a hard disk with S3 and especially Elastic Block Store.  This is one whole chunk of costs and complexity you can safely ignore because it just doesn’t matter to you and you couldn’t install it in your vendor’s Cloud if it did.

2.  Server power consumption.  It’s out of your hands.  Sure there are really cool new technologies, like Dell’s Fortuna server that is the size of a hard disk and uses 20-30W.  But it doesn’t matter.  You aren’t choosing the servers in your Cloud.  The good news is that any really large scale Cloud vendor like Amazon will be choosing servers with great performance per watt, because it lowers their cost basis.  If they’re selling a commodity, like EC2, they’ll have to pass those savings on to you too.  Best of all, you can feel good about these being more green solutions than you’re likely to have the expertise to create in your own data center.

3.  Worrying about big iron or little iron (or little big iron where a proprietary cpu is in a small chassis?).  Should I run the best servers Sun (or some other Big Iron vendor) can provide?  Or should I just run lots of little commodity “Lintel” (Linux + Intel/AMD) boxes?  Quit worrying about it, because you can’t affect this.  In all likelihood your Cloud vendor has Lintel.  You have no idea which hardware brand they use, so you can quit caring about that too.  All those specs, which rack form factor, yada, yada, just don’t matter any more.  You have a handful of virtual machines you can choose from.  There are relatively few specifications to focus on for those virtual machines.  Someone else has probably already figured out how to set up memcached or whatever on those machines and how to optimize the software for that footprint.  You should certainly try some experiments because your software may be different, but the search space is sharply limited.  That’s a good thing, isn’t it?  Now you can focus instead of poring over a gillion spec sheets outer joined to a gillion different purchase deals.

4.  Worrying about MIPs in general.  As Om Malik so correctly points out, its the megabits (of connectivity) not the MIPs that count these days.  We haven’t been able to get more MIPs like we used to for a while, because of the multicore crisis.  Sure, we get more cores, but we don’t get faster clock speeds.  Everyone is ooohing and aaaahing that the iPhone will get a 1.5x faster cpu.  Does anyone remember back when you got a PC twice as faster every 18 months?  They never felt twice as fast.  Most of the time you could only tell if you went back to the slower machine, which seemed sooooo slooooow.  People will hardly notice the faster iPhone, unless they go back to an older one.  Meanwhile, those in the clouds can get all the MIPs they want, provided they’re ready to use elastically scaled cores loosely coupled over a LAN.

5.  Wholesale bandwidth costs.  Why worry about it if all your data is in the Cloud?  All you care about is how fast an individual browser can access that Cloud.  Granted, a big office requires a fair bit of bandwidth, but nothing like a data center.  Moreover, your Cloud vendor probably has multiple data centers in multiple geographies as well as CDN capabilities, so you are now geographically distributed in terms of connectibility.

6.  Which load balancing box to buy.   Forget about it.  Your Cloud vendor does this for you, and even if they didn’t, you’ll have to use software because you don’t get to install any custom hardware in their Cloud.  With the advent of Amazon offering load balancing as a service of their Cloud, all you need to think about is how to use it with your application.  Life gets simpler and more focused again.

7.  Hardware monitoring.  Amazon’s new CloudWatch service tracks all the usual low level monitoring (cpu load, disk i/o, network i/o, and so on) on one minute intervals.  The data is kept around for two weeks.  This is all stuff you’d have to monitor somehow.  You’d have to find some monitor software, install it, learn how to use it, yada, yada.  With CloudWatch, you just have to learn to use what’s already there.  Amazon had to get this and a lot of other things to work just to have a Cloud.  You get a handy assist from that.  People who want to compare Amazon on a raw server cost basis never look at these kinds of costs.

8.  Creating multiple data centers for redunancy and for multiple geographies.  Werner Vogels, Amazon’s CTO, makes it sound so simple:

The Amazon Elastic Compute Cloud (Amazon EC2) embodies much of what makes infrastructure as a service such a powerful technology; it enables our customers to build secure, fault-tolerant applications that can scale up and down with demand, at low cost. Core in achieving these levels of efficiency and fault-tolerance is the ability to acquire and release compute resources in a matter of minutes, and in different Availability Zones.

Elastic availability of compute resources in multiple different Availability Zones (e.g. datacenters) in a matter of minutes?  First, it’s impossible for small companies to afford multiple redundant data centers.  They all reach a scale before dealing with that.  The Cloud levels that playing field so anyone and everyone can afford it day 1.  Just the sanity of having your data backed up to S3 with multiple copies in different physical locations is wonderful.  Second, even when you reach the size of being able to afford multiple data centers, it is a hugely expensive and complex undertaking.  Why would you ever want to deal with this if you didn’t have to?

9.  Exactly how to configure complex software like MySQL for my particular server instances.  Most of the Clouds have libraries of machine instances where somebody else (hopefully even the vendor who made the software) has set it all up, blessed it, snapshotted the image, and made it available.  Mount that image on an EC2 virtual server and away you go with something you know works.  Even if you are not on Amazon and don’t have Amazon Machine Instances like that, other clouds have these options too.  3Tera, for example, builds software for Cloud Owners and has what they call their Enterprise App Store.  These are pre-configured and ready-to-run instances. 

10.  Worry your engineers are spending valuable time worrying about infrastructure and worse physically visiting that infrastructure instead of doing something that gives your company a distinct competitive advantage.  Why build a datacenter if everyone else has one?  Let them make that investment while you invest elsewhere.  Werner Vogels gives a great example that is appropriate since the Indy 500 just ran Sunday.   Their site has a unique problem.  It requires a huge amount of resources to deliver a rich user experience:  multiple video streams including views from the cockpits of drivers’ cars with audio feeds and telemetry.  The challenge, as Vogel puts it, was that it isn’t used very frequently:

This is a high load application but it only runs three times a year. They found that they had to move a lot of engineers into data centers to keep their servers up. When they moved to cloud infrastructure they made 75% cost savings, the majority of which was on the people side; now they can manage everything from their armchair at home.

So there you have it.  10 things you don’t have to deal with if your data center is in the Cloud.  These are 10 things based on the pseudo-random collection of blog posts in my Google Reader RSS feeds.  There are many more out there, and I’m not even going to claim these are the 10 most important things.

Don’t you need fewer things to worry about so you can focus on what actually makes the difference?

Posted in amazon, cloud, data center | 18 Comments »

eBook Replacing Scientific Calculator?

Posted by Bob Warfield on May 5, 2009

I’m going to date myself here, but the memories are just too fond.  Starting in high school, I was a total scientific calculator junkie.  You know, the programmable kind?  As a pubescent alpha geek, that was my iPhone of the day.  We were past the slide rule era and just pre-PC.  I did have a little CP/M system with a rompin’ stompin’ 4K of hand soldered 2102 RAM for those that remember that sort of thing, and the rich kid down the block had an Apple II that threw out so much RF interference he had to sit in one corner of his room with the Apple II and quint to see the TV monitor in the diagonally opposite corner. 

My buddies and I who couldn’t afford Apple II’s (we did manage Trash-80’s when those came out) were all programming these calculators to do all sorts of funky things.  Lunar landers games of varying sophistication, prime number calculation, iterative equation solvers, you name it.  I started with a Texas Instruments calculator, a TI-59.  I still remember opening the package.  It was probably the first thing I got in life that had all those little gadgets (chargers, memory cards, instruction manuals, yada, yada) and that had that wonderful “new consumer electronics” smell.  Nothing like the uber sleek Apple packaging an iPhone comes with, but for the day it was exhilarating to get a package like that.  In those days, a kid was doing good to get a Schwin bike as a gift, a Lionel train set if they were really lucky.  We didn’t hope for multiple game consoles, cell phones, and the rest of the stuff kids take for granted today.  The $299.95 TI-59 was quite an expensive luxury.

ti59x

But I didn’t rest for long with it.  Eventually I came to embrace the amazing conceptual elegance of Reverse Polish Notation (you know, the calculator only the real geeks could understand how to work?) and that meant an HP.  HP’s fit, finish, and packaging were a whole level above that of the TI.  Texas Instruments may have invented the electronic calculator, but HP perfected it.  After having used the TI-59 for 2 years, I sold it to a friend and bought an HP-41C to take with me to college.

hp-41cv-s

At the school I went to (Rice University), we divided the student body into two types:  Academs and SE’s.   Academs were Fine Arts majors of one kind or another, and Business majors were lumped into that category.  Rest assured that the HP-41C was not a machine for Academs.  They scarce seemed to use a calculator at all, perhaps the little HP-12C financial calculator (still a great little machine!).  SE’s were Science and Engineering majors, the Geeks, and we all had programmables, mostly HP’s if you were a really good geek.

Which brings me to Amazon.  There were always a lot more Academs running around than SE’s, even though my school was primarily an Engineering school.  The world seems certain Amazon is about to introduce a new Kindle intended for textbook reading.  Why not?  Seems like the ideal power tool for Academs.  At last, a knowledge slate able to convey a classical education and not just scientific notation.  The new machine will have 9.7″ screen instead of the current 6″.  Cool!

People wring their hands over Kindle pricing, but if you’ve been reading along you must realize that Kindle is bargain compared to the calculators I’ve been writing about.  We scraped our pennies together in times that were both leaner, and where pennies went a lot further, to pay darned near as much as the Kindle costs today for our little bundles of computational joy.  This doesn’t begin to describe the relationship between the cost of a textbook-sized kindle and the ridiculously expensive wood pulp tomes we used to pay for in the on campus bookstore every semester.  Maybe Amazon can actually cut those costs enough so students are net ahead on spending money.   If nothing else, they’ll head off back problems as students quit having to carry so much weight across campus in their backpacks. 

kindle-dx-2-2009-05-04_22-17-39-rm-eng_2

I think it’s fantastic that the Kindle will be serving the textbook market.  Some important questions remain: 

–  How do I highlight my textbooks?

–  How do I use it to check out books from the University Library?

–  Can I get all the scientific journals without paying the exhorbitant sums these periodicals charge?

Time will tell.

Posted in amazon | 2 Comments »

Jon Hansen’s Cloud Computing in the SaaS World

Posted by Bob Warfield on May 1, 2009

Jon Hansen runs an excellent podcasting/Internet radio show called PI Window on Business. Recently I was invited to join one of these casts, but couldn’t due to another commitment, but I wanted to pass along this program because it concerns Cloud Computing and SaaS. Host Jon Hansen is talking with guest and blogger Michael Dunham from Scio Consulting. They’re talking about the recent McKinsey study that claims the Cloud does not deliver any savings for large organizations, and the program starts with a pretty decent introduction to Cloud Computing.

They key differentiator in Cloud Computing is that like SaaS, it is a Service. The customer pays for it without worrying how it works. The entire infrastructure in the background is transparent. That’s as it should be, BTW. There isn’t a lot of value and there is tremendous cost in having to be aware of every implementation detail to use a service. Dunham likens the Cloud to the telecommunications infrastructure that’s existed for a long time.

I wanted to go back over a number of issues raised in the show and give my own perspectives. This will be a longish post, because it was a half hour show that touched on a lot of issues.

There were lots of interesting parallels raised in the show. One theme is that Cloud really isn’t something completely new. As mentioned, we’ve had telecommunications and other kinds of Clouds for a long time. One of Hansen’s first questions was, “Who needs to be involved with the Cloud?” Will it be confined to an Oligarchy of Concentrated Expertise with the Large Players?

First thing to note is that the Cloud benefits from scale. It is essentially a commoditization phenomenon. There’s not a lot of benefit in buying services from a Cloud that is too small, unless those services are very unique. That will therefore drive scale on the vendor side of the equation except for more specialized kinds of Cloud. A lot of people I talk to wonder if Amazon isn’t already so far ahead of the pack scale-wise that it will be hard to catch them. The good news is that their offering is pretty generic, so there is an opportunity to differentiate. The bad news is that except for the largest possible companies, the IBM’s, Sun/Oracles, and the like, Amazon may already be too far along and so it will be essential for the other players to differentiate.

“Is it safe to say the expansion is occurring as the market is decentralizing? “

I don’t think of it so much as decentralizing as changing the locus of centralization. We move from centralizing around large corporate IT datacenters to centralizing around relatively fewer Cloud vendors’ large datacenters. One of the reasons companies are starting to scramble on the vendor side is this centralization.

The Cloud aggregates transactions. If I am selling servers pre-Cloud, I have lots and lots of customers. Win or lose any particular one, and it is not a big concern. There are a lot of fish in the sea. But, whichever vendor is lucky enough to close Amazon on their servers, wins a whole ton of virtual accounts (Amazon’s customers) by default. The stakes are much much higher. We will see Cloud providers dictating to such vendors the same way Wallmart and GE dictate to their suppliers how business will be done. Major new forces are being created in the market because Cloud Vendors represent the collective buying power of all their customers.

“So the general user and population don’t need to worry about this?”

The general user already spends most of their computing time in the Cloud. Every web app is in the Cloud from the standpoint of an end user. Don’t we already spend the majority of the time on our PC’s in web apps? So we have the reverse of the “last mile” problem of residential Internet access. The “last mile” is in place as we use all these web apps. The Cloud is about the “first mile” where the datacenter begins. What is your web browser connected to?

As the Enterprise grows increasingly distributed, this again favors the Cloud which is purpose-built for a webby world. It’s no accident one of the biggest Cloud vendors is also one of the oldest and most successful Web businesses. They know how to do that stuff!

“What about reliability, dependency on expertise, and support for the Cloud?”

Well, how reliable are your web apps? Do they crash more often than your Microsoft apps (LOL)? Mine sure don’t.

Are we happy with where the expertise lies with these apps? Tim Chou started the SaaS business at Oracle many years ago, and he is the first one I heard talking about the idea of “Who better?” Would you rather have your apps supported by your internal IT? Not me. They’re smart, but this is the first and only time they’ve ever run whatever app we’re talking about, and they didn’t build that app. I want the vendor to run the app for me and support it. They developed it, and they’ve run it for a lot of customers over a much longer period than my IT people. They’re the world’s foremost experts. Who better?

“What is the importance of standards?”

Michael Dunham was very concerned that we haven’t evolved enough standards yet in the Cloud world. I’m a lot less concerned. Amazon is a very straightforward service to adopt. The differences between what you have to know there are no greater than the differences between Sun SPARC Solaris vs HP/UX vs IBM AIX vs Wintel vs Linux Intel in a traditional data center. They’re no different than Oracle vs DB2 vs SQL Server vs whatever other platforms. In fact, they’re actually much less because a big part of what Amazon provides comes from these very same standards already. They haven’t added that much. I think it’s pretty straightforward to understand and take advantage of it. Standards are not holding us back to any appreciable degree, though IT loves to clamor for standards. It’s just their way of delegating some of the responsibility to understand.

What’s much harder for IT is the loss of control. They’ve built a lot of distinctive competencies over thousands of procurement decisions made over many years. They’re loath to revisit that fabric. But the advantages compel them to at least consider it.

“How is the organization involved with Cloud decisions? IT? Purchasing? Does this hasten the obsolescence of the CIO?”

There is a profound impact, no doubt about it. But I don’t think that impact is really that different from mega trends that have been at work in IT for a long time. IT has largely gotten away from being the arms and legs. They manage the arms and legs. I was having coffee with a friend from a Big SI the other day. She was lamenting they hadn’t yet embraced the Cloud, but she went on to say it was for the best because Customers lose control, there are security risks, and all the other chestnuts.

I responded that customers had already lost control and had all the same risks. Most of them are not running their IT today. The bulk of the people costs are going to outsourcers of one kind or another, either overseas, or IBM, or some other large service organization. I’ve worked with Fortune 500 companies that told me only 5-15% of the IT employees were actually employees of the company versus outsourcers. Why is the Cloud so different? She blinked, laughed, and agreed.

“Is there a concern that the big players don’t have enough experience with the Cloud? Remember, nobody ever got fired for buying IBM. Is this a big leveler?”

First, the big players are not blind to all of this. The Cloud and SaaS are highly disruptive. It’s very hard for them to flick a switch and be there overnight. The cost to their business model is just too high, and as was mentioned on the program, it touches every part of the organization and every aspect of doing business.

With that said, big license sales are slowing and have been for some time. Maintenance is becoming an increasing component. Acquisition of other company’s maintenance bases has become the growth vehicle. Ultimately, the source of organic growth will be Cloud/SaaS.
As I say, the big players are not blind. I wrote the post on the Red Cloud. I believe Oracle made the Sun acquisition largely in response to the whole Cloud movement. Moreover, Oracle has been active for many years with a SaaS business. It’s doing very well, though they don’t advertise it very loudly. SAP is less far along with Business By Design, but clearly they also see they need to be developing the expertise.

For the time being, there is still a tremendous advantage for newer players. It is more of an architectural advantage. I’m talking about both their software and their organizational architectures. As was mentioned on the program, it’s easier to start clean sheet for the Cloud than convert after the fact. The bigger the company, the harder to convert, and the slower that conversion must be.

“McKinsey recently said the Cloud is more style than substance because:

 Nobody agrees on the definition
 It doesn’t scale to Enterprise
 It distracts attention from areas where tangible value can be unleashed.

Why would they say that? Are they being influenced because they’re in line with the old model and vendors?”

First, I did not think the McKinsey report reflected a very deep analysis. The coverage I saw on it was universally negative. From my perspective, they picked a conclusion and then drew up an analysis that supported their conclusion, so yes, I’d say they’re part of the Old School “Military Industrial Complex” around IT. They have an agenda.

SaaS eliminates a lot of value from the ecosystem for third parties like McKinsey precisely because it is service and that’s what McKinsey and the SI’s are in the business of delivering.

That particular report did a lot of silly things in analyzing the cost of the Cloud for larger organizations. The per-server cost for corporate IT were ridiculously low compared to many other estimates I’ve seen (just the power costs alone from data center studies I had seen were a big fraction of what McKinsey claimed). They burdened the analysis with a lot of costs that were irrelevant to the choice of Cloud or Data Center. That just added a lot of fixed costs that masked variable cost differences.

Given their great name, the study really doesn’t reflect very well on their expertise. But it will be a handy piece of collateral for those that want some air cover from the advantages the Cloud is bringing and the attendant disruptions that entails to an industry.

Posted in amazon, business, cloud, data center | 4 Comments »

A Vision for Oracle’s Cloud Platform: The Red Cloud

Posted by Bob Warfield on April 22, 2009

Helpstream’s CEO (my boss), Tony Nemelka, penned a great piece on the Helpstream Blog about what the Oracle/Sun acquisition might mean.   A lot of attention has been focused on the potential for negative outcomes.  Will Oracle kill MySQL or at least damage it with worse than faint praise (fascinating post by fellow Enterprise Irregular Josh Greenbaum)?  Other note (quite rightly) that Oracle can’t really kill MySQL because of its Open Source basis.  I found WordPress founder Matt Mullenweg’s post to be particularly eloquent of this.

What I found intriguing about Tony’s post was the more positive scenario it envisions.  Read the post, but let me summarize for purposes of this discussion.

Tony was recently in Japan and has a long history there having been an executive for PeopleSoft, Epiphany, and then Adobe in charge of the region.  Needless to say, his contacts are pretty high up the food chain, so they know what’s going on.  In that world, the System Integrators are the gatekeepers for the market.  They’re very powerful, and the interesting discovery Tony made is that they absolutely love Force.com.  It’s not hard to see why.  The SaaS model squeezes the SI ecosystem.  The normal meat and potatoes business around just getting on-premises software installed is greatly reduced.  The business of just keeping the lights on is almost non-existant for SaaS.  Yet SI’s have a lot to bring to the table.  A good SI often understands the Domain, its Best Practices, and the key Business Processes better even than the software vendor.  Having access to a SaaS platform makes it possible for the SI to turn that valuable knowledge into product which can then be sold.  That’s why having a platform on which to do that is so important to them.

Tony goes on to speculate that Oracle is picking up the components necessary to create such a platform.  If nothing else, Oracle’s Japanese SI’s are screaming that they need one.  I have to imagine SI’s everywhere are grokking the essential value of a platform to the SaaS ecosystem.  There’s nothing about the Japanese market that would make that a unique requirement there.  So far, Oracle is really stuck in that department.  I suppose they would argue the coming Fusion represents such a platform.  At the same time Sun, like every big hardware vendor, was hard at work crafting a Cloud strategy.  They all know the Cloud is a tidal wave that can profoundly impact their businesses.  The Cloud represents the federation of many smaller deals into fewer gargantuan deals.  One over simplified way to view it is as a whole new sales and marketing channel.  Failing to suit up for the game guarantees a loss and the stakes are high. 

Some I’ve talked to say that Oracle just “doesn’t get it.”  They don’t believe in SaaS, they don’t understand SaaS, and they can never execute this kind of nuanced strategy until it is way too late. 

The idea that Oracle wouldn’t try or wouldn’t deliver anything is not something I’d want to put too much money on.  It’ll probably take them longer than anyone would like, or they might surprise us too.  Even Oracle can’t really fight the Cloud/SaaS tidal wave.  Remember that the guy at the top believes it in, don’t forget that Larry Ellison has put his money into SaaS companies many times.  It happens to be inconvenient at the moment for the various financial metrics Wall Street cares about for Oracle to switch wholesale to SaaS, but even that is something they can manage over time.  Also, we know Sun was working hard on their own Cloud strategy.  Suddenly there is a lot more Cloud DNA coming into Oracle. 

I suspect Oracle’s vision of what a PaaS (Cloud Platform) is will be a lot different than what you or I might choose.   If nothing else, it won’t be a clean sheet of paper approach.  Let’s think about what it might be.

First, I would expect the initial version will not be multitenant.  Multitenancy as it is delivered today is too deep in the guts of the application.  It forces too much change to architectures, which creates too much adoption friction for a platform at the outset.  Oracle will want to deliver the promise of running any app on their Cloud Platform, or at least any app built to run on their now very comprehensive stack.  It spans hardware (SPARC et al) to OS (Solaris) to DB (Oracle/MySQL) to App Server (BEA) to Business Intelligence (Hyperion) to <you get the idea, phew!>. 

Second, if not multitenant, what?  Think virtualization.   Don’t they need to buy VMWare to get that?  They may buy VMWare, but they don’t need it for virtualization.  Sun Solaris has a wonderful virtualization capability built right in.  I’ve used it before to create a SaaS application and it works extremely well.   Imagine an Amazon-like capability to start up these virtual Solaris machines.  If Oracle is smart, and they usually are, you’ll be able to start up virtual “appliances” in the Red Cloud (my new name for Oracle’s Cloud) that deliver database, app server, and many other functions.  Consider:

–  Storage:  This one is obvious.  Sun has a big storage business, Jonathan Schwartz has blogged about their great ZFS storage technology, and so Oracle can easily deliver the “Amazon S3” storage piece of the Red Cloud.

–  Identity Management:  Control over who logs on to the Cloud.  Sun is strong in Identity Management, for example.  Oracle already had a business there.  The combination of the two would create a leader to rival IBM and possibly be the world leader.  Having Identity Management built into the Red Cloud would be a decided work savings over Amazon, for example.  And Identity Management is one of those things on-prem apps are used to farming out to another module.  Hence it would facilitate their migration to the Red Cloud.

–  Business Intelligence:  This is another of those modules everyone wants to OEM instead of having to build for themselves.  It’s an ecosystem component, like Identity Management, ETL, and a host of other things.  Oracle can again deliver a virtual appliance in the Red Cloud that makes it simple to connect.

–  Integration:  This will be essential to making the Red Cloud Appliances work.  But when you have one vendor that controls so much of the stack, they should be able to make it work better than anyone else.  This is where the vision of being the “Apple for the Enterprise” can best be seen.  This is where a lot of the Fusion work, as well as work from BEA could tie in.

OK, that’s a pretty darned impressive first tier vision if you ask me.  It’s taking the old pitch about buying a suite from one vendor and ratcheting it up significantly in terms of scope.  Not everyone will buy into it, but Big IT might just need something like this before they can start moving to the Cloud.   If Oracle can deliver such a thing, it will be an enormous business.  Someone I was talking to recently said they thought Microsoft was Oracle’s ultimate acquisition target, but I think Larry has a shot at rivaling much bigger entities if he can execute.  The IBM’s and HP’s are starting to appear on his horizon.

But there are some warts.  It will be a hodgepodge unless some Fusion-like glue can make it all fit.  It will be an enormously complex offering to market and sell.  It will be nearly impossible to take in the scope of it or understand all of it.  All of the Enterprise complexity that Big IT loves, but that SaaS has tried to ameliorate will be there.  Granted, this is better than the old on-prem complexity.  Oracle can deliver at least some of the SaaS advantages.  But what about cost?  Can we really get the SaaS cost advantages without multitenanacy?  In a word, “No!”  I just wrote an article about the pitfalls of thinking virtualization is a substitute for true multitenancy.  I stand by every word I said.  But Oracle has a unique opportunity to virtualize multitenancy itself, not in the first iteration of the Red Cloud, but in later iterations.

Whoa!  What the heck is Bob on about now?  Virtualizing multitenancy, what does he mean?

What I mean is a mechanism whereby single tenant applications can be made to have all the benefits of multitenancy without radical architectural change.  There are two ways this can happen. 

The approach is to have the database itself virtualize multitenancy.  The most popular model for multitenancy is what I call columnar:  a column in the database tells which tenant each record belongs to.  A suitable feature set in the database server can completely automate this and make it radically simpler for the application to work along this model.  A second common model gives every tenant their own set of tables.  Here again, special support in the database can radically simplify the implementation.  Note that Oracle already does partitioning (they may have invented it, but I am not sure of that), which is a feature that makes a bunch of physical tables look like a single table and that greatly improves scalability.  So now Oracle could deliver a Multitenant DB Appliance in the Red Cloud.

The second approach attacks the costs of being single tenant.  In my post on the subject, I talked about the idea of fixed costs and variable costs.  The difficulty is that the database server uses up a bunch of system resources on each virtual machine even if there is no data loaded into it.  This is because the database server is unaware of the other database servers in their respective virtual machines.  They are isolated.  But what if they were aware of each other and could pool those fixed cost resources to reduce the overhead?  What if the operating system itself facilitated this?  Those fixed costs could be dramatically reduced.  Moreover, if a comprehensive integrated feature set was aimed at reducing the cost of administering such as system, we would likely start closing in on true multitenant efficiency levels. 

That would be my vision for Oracle’s Red Cloud.  It would be a first-class Cloud platform, although much more Enterprisey and Old School than the New Cloud Age SaaS and Amazon-style Cloud visions.  Oracle and BigIT will view that as an advantage.  The biggest challenge in all this will be execution.  It is a gargantuan task on a level Oracle has never delivered before.  It involves both coordinating a lot of existing parts and pieces as well as delivering some genuine innovation (Virtual Multitenancy will be non-trivial!).   They may not be able to pull it off.  But the stakes are very high, and they will have years to work at it.

What do you think of the Red Cloud?

Posted in amazon, business, cloud, data center, saas, strategy | 4 Comments »

 
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