Why wouldn't they bitch it?

For all those skeptics of Cloud computing economics, Nick Carr has a tell all with a NYT illustration. It’s a long post. I am pint sizing it here.

“The history of computing has been a history of falling prices (and consequently expanding uses). But the arrival of cloud computing - which transforms computer processing, data storage, and software applications into utilities served up by central plants - marks a fundamental change in the economics of computing…

In late 2007, the New York Times faced a challenge. It wanted to make available over the web its entire archive of articles, 11 million in all, dating back to 1851….That's not a particularly complicated computing chore, but it's a large computing chore, requiring a whole lot of computer processing time….Fortunately, a software programmer at the Times, Derek Gottfrid, had been playing around with Amazon Web Services for a number of months, and he realized that Amazon's new computing utility, Elastic Compute Cloud (EC2), might offer a solution. Working alone, he uploaded the four terabytes of TIFF data into Amazon's Simple Storage Service (S3) utility, and he hacked together some code for EC2 that would, as he later described in a blog post, "pull all the parts that make up an article out of S3, generate a PDF from them and store the PDF back in S3." He then rented 100 virtual computers through EC2 and ran the data through them. In less than 24 hours, he had his 11 million PDFs, all stored neatly in S3 and ready to be served up to visitors to
the Times site.

The total cost for the computing job? …Gottfrid told me that the entire EC2 bill came to $240. (That's 10 cents per computer-hour times 100 computers times 24 hours; there were no bandwidth charges since all the data transfers took place within Amazon's system - from S3 to EC2 and back.)”

Amazing economics. Now why wouldn’t they (high cost, license based, on-premise enterprise s/w makers) bitch it?

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Have it in the cloud, will burst !

When we rely so much on the internet for our daily dose of email and other web applications, we are exposing ourselves to its fallibilities also. For the web-obsessed amongst us relying way too much on email, blogs and wikis through the day, a couple hours of outage is indeed our idea of hell. Now imagine enterprises that expose themselves to the vagaries of cloud-based computing services? That clearly means loss of business. Apple's MobileMe service was down for a few hours yesterday, and access continues to be sketchy for some, representing the most unfortunate kind of consistency over the past month.

Google found itself apologizing for its Gmail outage yesterday: "Many of you had trouble accessing Gmail for a couple of hours this afternoon, and we're really sorry. The issue was caused by a temporary outage in our contacts system that was preventing Gmail from loading properly. Everything should be back to normal by the time you read this." And an online storage service called The Linkup (formerly MediaMax has closed up shop after losing an unspecified amount of customers' data.

That triggered another round of commentary from the blogosphere about how dicey a proposition it is to trust your data and services to the cloud, especially your business critical applications. But while trouble in the cloud carries the added annoyance of feeling powerless while someone else works on a fix, these outages are just a vaporous extension of what we know to expect with more tangible, earthbound systems, indeed with every device, appliance and service we use. Why don’t we just say, stuff breaks? Systems are going to go down, it’s a fact of life. What’s important is to be prepared when those systems go down which is a major reason that some kind of offline access should be built into systems like email. In theory we’ll reach a time when the cloud really is always on, but we’re not close and it may never happen Maybe it breaks less if you pay enough money, but it breaks. With that as a given, especially so with complex or newer technologies, any plans to use the cloud also require plans to do without it if need be. The advice from the Department of Redundancy still holds: back up. Because the alternative is on-premise enterprise software with its huge license fee, maintenance and hardware costs, frequent upgrades, revisions, consultants and system integrator fee besides long process breaks entailed by complex installation protocol.

Don’t you know there is a liquidity crisis crippling global business sentiment? Economics will win hands down anyday. Never mind the outage…

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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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Despite Bill Thompson I love the cloud

Cloud computing – the technology that connects large groups of servers that often use low-cost consumer PC technology, to spread complex data-processing chores across them. Google's search engine and productivity applications are among the early products of efforts to locate processing power on vast banks of computer servers, rather than on desktop PCs. Microsoft has released online software called Windows Live for photo-sharing, file storage, and other applications served from new data centers. Yahoo has taken similar steps. IBM has devoted 200 researchers to its cloud computing project. And Amazon recently broadened access for software developers to its EC3 (Elastic Compute Cloud) service, which lets small software companies pay for processing power streamed from Amazon's data centers.

While estimates are hard to find, the potential uses are widespread. Rather than serve a relatively small group of highly skilled users, cloud computing aims to make supercomputing available to the masses. Reed, who's moving to Microsoft from the University of North Carolina, says the technology could be used to analyze conversations at meetings, then anticipate what data workers might need to view next, for example. Google, Microsoft, and others are also building online services designed to give consumers greater access to information to help manage their health care.

Enough stuff that makes for hype? Yes and it did raise a lot of dust. Bill Thompson of BBC cuts through some clutter.

“Because behind all the rhetoric and promotional guff the 'cloud' is no such thing: every piece of data is stored on a physical hard drive or in solid state memory, every instruction is processed by a physical computer and the every network interaction connects two locations in the real world…It is often useful to conceptualize online activities as cyberspace, the place behind the screen, but the internet is firmly of the real world, and that is one of the greatest problems facing cloud computing today….Under the US Patriot Act the FBI and other agencies can demand to see content stored on any computer, even if it being hosted on behalf of another sovereign state.”

Well, data protection concerns always remain when you host anything in the cloud. But how about the reduced costs of cloud computing v. licensed software that loads the customer with a 22% maintenance, cost of upgrades, consultants fee and running after patches just to stay live?
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Live by the Cloud, Die by the Cloud

All that jazzed about SaaS suffered a rude jolt when Amazon web services (EC2, S3) had its outage this morning. We had suffered Skype outage before but that was free VOIP calls and you had a fallback. But this could ruin many a small business – especially if they’d put it up in the Amazon cloud. Twitter for one.

The retail to digital media to web services giant has made a lot of progress persuading small and midsize businesses to use its enterprise infrastructure for all their data storage and server needs. The cloud computing proposition sounds plenty compelling: Focus on building your business and leave the driving to us.

But all it takes is a bad crash to give people second thoughts. For the quality of infrastructure and the resultant cost savings that S3 offers, how many would really crow about one outage every two years…? Larry Dignan says you won’t recognize it in the next decade.

Meanwhile I had a look at Amazon’s 2007 numbers and some analysis. Coffee or tech? Looks like coffee isn’t a bad business. Amazon makes $207million on $5.67billion($0.48 earnings, $74.21 stock per share), or Starbucks $208million on $2.8billion($0.23earnings, $19.22 stock per share). Which look like a better business to you?

So, stay put? Nothing to worry? Live by the Cloud, die by the Cloud, I say.

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Cloud fails to capture

Cloud computing may be the in-thing, but if early fanfare is to go by, don't play the requiem music for enterprise software just yet. Those folks with their heads in the clouds about online productivity tools doing serious damage to Microsoft's Office got a reality check recently -- some stats showing just how far away that may be.

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A sampling of U.S. PC users by research outfit NPD found that 73% had never even heard of Google Docs, the search sovereign's collaborative word-processing tool, or any other manifestations of cloud computing. An additional 21 percent had heard of such things, but never tried them. And by the time you get down to those who use the online tools often and to the exclusion of a desktop suite, you have to squint to see the 0.3 percent.

Those numbers tempted some to rush out a declaration that the concept of Web 2.0 office suite was DOA. "The scant adoption makes some sense of Microsoft's Office Live Workspace, which went into broad beta last week. The service clearly is designed to be an adjunct to Office desktop software rather than a Web-based alternative," writes Joe Wilcox. "If NPD's numbers are indicative of real-world usage, Microsoft hasn't much to worry from Google Docs and Spreadsheets or other online alternatives. Maybe too many people make too much about the Web 2.0 threat to Office."

Or maybe too many people made too much of it too early. "We're in the early stages of the 'hybrid phase' of personal productivity applications, when most people will use Web apps to extend rather than replace their old Office apps," writes Nick Carr. "This phase will play out over a number of years as the Web technologies mature, at which point it will become natural to use purely Web-based apps (with, probably, continued local caching of data and program code). ... Once people get used to using the online apps at home or at school, they may well find the idea of buying an expensive piece of software, installing it on their hard drive, and regularly patching and updating it to be awfully old-fashioned. That's the scenario that should be of greatest immediate concern to Microsoft, and it's a scenario that is beginning to play out, even if the numbers aren't yet huge."

But can Enterprise suites get smug and choose to be un-sexy…? Hardly. Here’s to their tomorrow.

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This one is for the masses

Way to go....

I am beginning to like it. Low cost innovation for the third world or just simple computing for the masses.

I am referring to the initiative of Chennai-based IT company, Novatium Solutions, that announced a strategic tie-up with Mahanagar Telephone Nigam Limited (MTNL) for the launch of its Nova netPC, a breakthrough in utility desktop delivery for as low as Rs. 399 ($10) a month (not exactly). Novatium’s Nova netPC is an affordable and simple desktop that is reportedly very user friendly. They say it can be operated like any household appliance at the touch of a button and is quite affordable. The Nova NetPC home user package is available for only Rs. 1,999 ($50) (plus taxes) without the monitor [monitor available at an extra cost of Rs 3000 ($75)] in addition to a monthly subscription starting at Rs 399, including a 30 hour Internet access.

The technology is called Cloud computing – extricating the OS and all its application software from the desktop, host it from a central server and offer it up as a service to multiple clients. The clients neither have to own and maintain storage hardware like a hard disk and CPU at their end nor worry about data security. The most important benefit is of gaining instant computing power without spending too much upfront.

But I feel they can go a little further on its economics. When even many basic services like college admissions, booking a railway ticket, Board / University Exam results services going online, those at the bottom of the pyramid earning under $1 a day too need cheap internet access. They will have ambitions to educate themselves beside their children. The true purpose behind such laudable initiatives – taking computers to the masses - would be achieved only if the cost of minimal hardware (keyboard, mouse and monitor) is kept lower still. It should also be made available as a service or at least on some pay-as-you-go basis. Wider adoption of the net eventually improves the operating margins (eliminating agents in travel services) of many a service provider and Novatium should tap them either for sponsorship, working capital and infrastructure support. The Government can sure waive excise duty, sales / service tax for such mass initiatives. It should bring down the costs further and that should make it a win-win model for all.

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