The Quiet Disruption in Process

Hi. I’m back. Well, at least for a moment.   I’m been radio silent for a while because I didn’t feel I had much to say. Blogger’s block, perhaps. I prefer to think of it as editing in extremis.

Over the past few months we have seen the rise of “cloud computing” or “platform as a service” as evolution in the world of IT.   From one perspective it is an incremental evolution.  We have moved from proprietary data centers to hosting environments to platform environments.   The technology isn’t what is revolutionary; it is the economic model.

Go back to 1998.  We bought big iron, big o/s, big RDBMS, and big pipes all in service of building web applications.   Open source drastically cut the entry price for a good idea.   We saw an explosion of creativity unleashed in Web 2.0 beginning circa 2003-4.  The cost of entry went from millions to thousands of dollars.

Now the cost of provisioning the systems in entirely has gone to zero.  Google Apps is a free developer sandbox for web apps, at least for web apps that meet their design constraints.   I think it is reasonable to assume that the Python-only, non-transactional computing model that Google offers today will drive others to offer other computing stacks that support other flavors of development models, all equally free.  There is a phase transition between cheap and free.  I assume the growth of free application provisioning environments will cause another renaissance on the scale of Web 2.0.  (I will resist the temptation to label it. You're welcome.)

Let’s fast-forward another ten years.  If the market price of provisioning an application goes to zero more broadly, who is impacted?  What does this mean for

• SaaS application providers? 
• Enterprise IT?
• and vendors like BMC, IBM, and HP that dominate data center automation today?

Perhaps the value will shift from applications to infrastructure. Security, disaster recovery, archiving, etc., will still be needed - as services, not products. Freemium comes to enterprise computing.

We all know that the history of computing has been about platform shifts.  Free is the next disruption.  Like all platform shifts, it begins as a small but structural change in the economics of adoption. It ends with the re-alignment of the market, with a couple of survivors, and many more new entrants. 

Comments

[Nancy Kramer]

Excellent post. I am looking at cloud computing for some new projects I am doing. Since I am self funded it is definitely the way to go.

[Megan Cunningham]

Peter, you make some thought-provoking points. But in my experience there's still a significant gap in the enterprise between the avg TDM and BDM's knowledge base. Until the bean counters understand the economics of deployment --and what is gained, what is lost, and where the cloud can be utilized for optimal performance, while still ensuring security-- I think it's a tough sell in the enterprise. Too murky, frankly, for most biz folks to trust. My prediction: this disruption will happen, but adoption will occur at a glacial pace.

>Google Apps is a free developer sandbox for web apps...

I would cite the RIA technologies (Expression Blend, Silverlight, WPF, AIR, Flex, etc) as a far more important market accelerant, given the seismic shift in global ad dollars from print & bcast to web and mobile. You forget: top developers are not all launching startups; most are expecting phat paychecks, and long vacations; the agencies are the ones that are paying. And their clients need to hear the sizzle* before they order the steak.

* ajax-y apps, FB widgets, and post-viral, media-driven web apps and -god help us- microsites...