Cloud is here to stay

 IT is a commodity

 

During my Cloud workshops and lectures sometimes discussions arise about the marketing hype around Cloud computing. The techies often state  that there is nothing new. Virtualization e.g. is a technology invented in 1947 and already more than a decade proven technology. Business men stipulate that they have heard many times before beautiful IT stories and were left behind disappointed, because the reality was less bright than depicted. Financial managers stress the point that all promises about IT cost reduction oftend end in paying a higher bill for new technology.

 

From Innovation towards utility Services

 

The pay-as-you-go concept is often compared with the way we pay for our electricity. Only the amount we use will be billed. If we don't turn on the light, we only pay a small amount for the electric grid connection. Maybe it is a good idea to look at the steps every industry takes from innovation towards utility service, like electricity, to understand why Cloud computing is here to stay.

 

Every major shift in industry starts with an innovation, something rare, a brand new way of doing things. After the spark of innovation the first bespoke systems will hit the market. When it really fulfill a market need, the bespoke systems will be followed by standardized products. When the products are so widely spread and matured, it will become a commodity and it can be delivered as a utility services. Here are the stages for the electric industry:

 

1. Innovation: 1800 electricity produced by chemical reaction

 

2. Bespoke: 1831 Michael Faraday electricity from rotary motion

 

3. Product: 1878 Thomas Edison distributed direct current electricity

 

4. Services: 1895 Niagara Power station started production

 

CRM as a utility service: Salesforce.com

 

If you look at Cloud Computing you will see the same stages as the electric industry. One nice example is the development of CRM systems:

 

1. Innovation: 1980 early lists

 

2. Bespoke: mid 80's Database marketing systems

 

3. Products: mid 90's Siebel, Oracle

 

4. Services: 1999 Salesforce.com founded by Marc Benioff

 

Why is Cloud Computing here to stay?

 

Cloud computing is not about technology. As we have seen above, virtualization e.g. is already a proven technology for many years. Cloud is the logical step to deliver IT as a utility service, because the basic building blocks of the IT infrastructure are standardized and widely used. IT has become a commodity.

 

The users attitude is there to use IT services as a commodity. Bill Gates brought the information to your fingertips and Steve Jobs has done a terrific job in putting the world in the palm of your hands. So the acceptance of the users is there to use IT as a Service. The concept of Cloud Computing is there, the tech building blocks are there and it fulfills a real market need: functionality at your fingertips, anywhere you go, anywhere you need.

 

www.peterhanselman.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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