Not so promising Cloud?

Courtesy of Nick Carr, I read Sarah Lacy’s take on why SaaS will drag.

Lacy says

“….On-demand software has turned out to be a brutal slog. Software sold "as a service" over the Web doesn't sell itself, even when it's cheaper and actually works. Each sale closed by these new Web-based software companies has a much smaller price tag. And vendors are continually tweaking their software, fixing bugs, and pushing out incremental improvements. Great news for the user, but the software makers miss out on the once-lucrative massive upgrade every few years and seemingly endless maintenance fees for supporting old versions of the software.”

Well, I have some questions to Lacy. Isn’t that gouging by licensed software vendors (charging fresh-off-the-oven rates even after years of amortization of developmental expenses) in the name of maintenance and support and upgrades and consultancy the reason why SaaS came into prominence? Now won’t the users that are victimized give a longer rope for SaaS vendors to perfect their art? SFDC did succeed after all, didn’t it, albeit in its own niche?

Lacy then asks “Why isn't Oracle a bigger player in on-demand software?” She seems to have some answers as well. But I would rather say - “Ellison just didn’t get it”! On-demand model has to be designed from scratch by some brain that has not been corrupted by the luxuries offered by the licensed software model. Ellison knew he won’t be able to figure it out ever. That’s why he smartly backed Marc Benioff of SFDC who had no such prejudices.

On the same lines, I also differ with Nick Carr as he says -

“The unsentimental Ellison will wait until the profits from traditional software begin to decay, and then will buy his way into the software-as-a-service business, cherry-picking attractive suppliers”.

Given the way software business and user patterns evolve, both licensed model and on-demand model will have to co-exist for a long time until other issues around connectivity, hosted service quality, data storage and security, WiMax spectrum availability are resolved globally. If profits from traditional software begin to decay, chances are that it will be replaced by a more economical enterprise application and not necessarily by a SaaS app. Transition of all things on-premise to everything on-demand may not happen at all. But the economics will tempt a lot of rethink and it is that scenario which might drive some sense into enterprise vendors to stop gouging customers and get real.

So don’t hurry to bitch SaaS. For every believer in enterprise hegemony, there could be ten others that swear by SaaS economics.

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Can we cope?

“In future the geography of the cloud is likely to get even more complex. “Virtualization” technology already allows the software running on individual servers to be moved from one data centre to another, mainly for back-up reasons. One day soon, these “virtual machines” may migrate to wherever computing power is cheapest, or energy is greenest. Then computing will have become a true utility—and it will no longer be apt to talk of computing clouds, so much as of a computing atmosphere” – says the Economist.

Nick Carr says the journey of the itinerant computer has just started. Any more, I have doubts whether we could cope.

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Can't crack your code - make it simple

The noise over advanced encryption technology used by RIM refuses to die down.

Indian officials had put pressure on RIM to provide security agencies with a way around its encryption demanding either a "master key" into data and e-mails sent from RIM’s BlackBerry devices or that RIM set up servers that could be monitored by Indian security agencies. But during a presentation to India's Department of Telecommunications, RIM pointed to four other mobile e-mail systems in the country -- Windows Mobile ActiveSync, Nokia Intellisync, Motorola's Good, and Seven Networks -- that utilize similar encryption. RIM contends that the government would have to also take actions against those companies and not just RIM.

Data on RIM's network utilizes the 256-bit Advanced Encryption Standard. The Department of Telecommunications has said it wants RIM to reduce this to a 40-bit encryption.

Now I ask – Just because you are going on a long vacation, would the authorities want you to leave your apartment keys to them? How safe are our properties with an easily corruptible Govt. official?

By making the encryption crackable, they enable corporate espionage, spying and all kinds of gamesmanship. Why even an obsessed individual can hunt down anyone. Crime rings can have a field day. That's what we all need, more crime.

What’s the big deal about 256 bit encryption anyway? Is it not crackable? Satellites use 1024 bit encryption – do they want them to be downgraded too?

Every bit of encryption is just a complex algorithm that masks data. It can be outwitted by another stroke of ingenuity. It’s like picking locks. For every intricate lock, there is a smart locksmith that can pick it. By asking to limit the level of encryption, lawmakers expose their own strategic myopia. Next what? Will they want all locks to be pickable and make it easy for burglers? Asking for a master key to peep into every e-mail or seeking localized servers serves hardly a purpose. If they want to intercept communications, they should rather allow for the best encryption technology to prevail and then invest in innovative counter-cryption technologies or code-cracking initiatives that can break every code lock. That’s where we want a national policy – innovation investments as a part of counter espionage initiatives.

Yet another aspect worth exploring is when technology levitates more and more services from the desktop to the computing cloud or the internet. When SaaS service providers allow users to have unique encryption keys, will they classify such information as being held in the location of the server or where the key is held? I am not sure the data woven with advanced encryption protocol will cease to be in public domain that the security agencies cannot intercept. Nobody is asking for an intrusion free data haven as yet. We just want our data - say money in the bank - available for our exclusive use and not for any random hack to rob every last dime. But the Government in asking for lower encryption standards from RIM is exactly setting a trend in that direction.

Would they still ask for the cloud servers or their massive data centers to be located inside the Capitol Hill or the Parliament House? How much can they geotarget? Have they ever imagined what it takes monitor such a high volume data? Now the big question – how hard is it to bribe the security official that has access to the master key? Bite what you can chew folks!

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Did you say e-privacy...?

As part of the discovery process in Viacom's billion-dollar copyright-infringement suit against Google's YouTube, U.S. District Court Judge Louis L. Stanton on Wednesday ordered the search sovereign to hand over every record of every video watched by YouTube visitors, including user names and IP addresses --.terabyte upon terabyte of data. Viacom contends it needs the information to demonstrate how YouTube enjoys the fruits of illegally posted video clips. Google's argument that such a release would represent a massive violation of user privacy was waved away by the judge. "Defendants cite no authority barring them from disclosing such information in civil discovery proceedings, and their privacy concerns are speculative," Stanton wrote in his opinion. The judge also pooh-poohed the idea that the logging data was sufficient to be personally identifiable, despite examples to the contrary.

This decision, says the Electronic Frontier Foundation, seems to fly in the face of the Video Privacy Protection Act, which applies, quaintly but sufficiently broadly, to "prerecorded video cassette tapes or similar audio visual materials" and strictly limits disclosure of "information which identifies a person as having requested or obtained specific video materials or services." "The Court's erroneous ruling is a setback to privacy rights, and will allow Viacom to see what you are watching on YouTube," the EFF concluded. "We urge Viacom to back off this overbroad request and Google to take all steps necessary to challenge this order and protect the rights of its users.

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Unless you take special and inconvenient precautions, you leave a clear set of footprints as you travel through the digital world. Between your charges and debits, your cell phone and your GPS, your messaging and your browsing, a set of data points emerge that, if viewed from the right height, can chart your interests, your activities and your path like you were little Billy in "Family Circus." Most of us deal with this exposure the same way we deal with other uncomfortable realities -- shrug and apply some combination of trust, faith and hope that we won't get hurt. But like the occasional temblors that remind us here that we're living in earthquake country, news comes along periodically to remind us that our privacy is also on very shaky ground.

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