Friday, June 13, 2008

Do you recognize the cloud trend?

Let's focus on four business organizations (orange buttons), or enterprises if you like. They own and manage there own software systems (green dots). Even in the Before-Internet-Era, let's say the nineties of the twentieth century and before, there were heavily used mechanisms to have software components communicate (blue lines) across organization boundaries. See figure 1.

Figure 1: the nineties of 20th. century (before Internet)

Then the Internet came raging across the world, let's say in the first decade of the current century, and dropped a cloud. Pioneers on the Internet started offering software solutions from the cloud, much for free, enjoying the pride of being the first.

Commercial SaaS products started to enter the cloud domain and nerdy hobbyists (some from Google, some not) started to create mashup platforms and solutions in their spare time. I won't mention the Google Maps cliché. At the same time standardization organizations were making overtime to define and support open application level communication standards and protocols.

Figure 1 (above) changed to figure 2 (below), the blue lines between the organizations became a blue cloud surrounding the organizations. And more, the cloud not only offers communication facilities, but functional business services to be used as part of your own business processes as well. The green dots not only reside on the orange buttons, but also in the blue cloud. And they are directly in the hands of your employees and colleagues, without interference of your central IT department.

These green dots in the blue cloud are new and they are multiplying like mice; non-stop. Try to imagine what that means... if you can.

Figure 2: first decade of 21st. century

You doubt? What about a very recent example very close to me: Selling discount train tickets on eBay (green dot in the blue cloud). I just found this out by surprise today. I am an employee of the IT department of Dutch Railways and I really didn't know Dutch Railways started offering tickets that can be bought (including payment) on the Internet - as a temporary campaign. A colleague of mine informed me after he was notified by the Google Alerts service (another green dot in the blue cloud); not by the respective employees. Our IT department has completely been kept out (what could we do at all?). I even promoted a more sophisticated variant of a green ticket selling dot in the blue cloud, a few weeks ago on this blog, without knowing anything of this initiative nearby.

And what about yourself? Haven't you ever looked up your supplier via Google? Or looked at the CV of your colleague on Linkedin? Sent a business relevant email via Gmail? Subscribed to business relevant RSS feeds? Ordered some books for your company library via Amazon after querying a service that compares the prices of several book-stores? Booked a business flight via an air booking site? Published the pictures of your department party on Flickr? Sent a file that was too large for email via Yousendit to a colleague at an other location? Archived some files on to be accessed from elsewhere? Well, I did.

Okay, these examples sound all a bit trivial, but it has just started. You didn't do all of these things 10 years ago, or 5 year ago. Before reading this post, did you realize that you and your employees already started using the green dots in the blue cloud as part of your business processes? And that some of your employees already depend on some of these public dots to fulfill their tasks adequately? It will be more and it will be pervasive. Don't be afraid and don't fight it, but seek to cope with it.

The green dots in the blue cloud become more and more robust, reliable and secure. Even better than organizations can organize and guarantee in their own orange button. And at a price that low, that the costs become irrelevant to business cases and ROI's: cost will be no hurdle to usage and change. Just because the software you originally owned and used by yourself is now used by thousands or even millions of users everywhere on the globe. Just because the blue cloud turned up.

Do you think of the electricity costs when you turn on the light in your bathroom? The cost of using software (or listening to music or watching movies) will go the same way as the cost of electricity at home; pay-as-you-go at a very low rate. Because of the scale. And that will become visible in the second decade of our current century.

As figure 3 shows, the green dots will leave the orange buttons and start a new life in the cloud. Some green dots that are very tightly glued to an orange button will stay there. These are the very specific applications that must guarantee your business advantage. But all the others will eventually populate the cloud. Do you notice that figure 3 starts looking a bit like the inverse of figure 1?

Figure 3: second decade of 21st. century

And now back to today, 2008. Do you recognize this trend? Do you think it will go this way? Can you mention any reasons why not? What do you think will happen if you don't believe this, but your competitor does? If he turns out to be right? Are you going to take that risk?

Whether you believe it is rapidly moving this way or not, it is not a bad idea to formulate a vision on this subject and either develop a strategy to cope with it or explicitly conclude you safely can ignore this trend...


Mark Griffin said...

Lots of good points here Jack. However I'm not sure the electricity analogy completely fits or helps sell the idea. Disclosure ( I worked for a power company for 10 years). It's delivery method and use really hasn't changed over the past 50 years (demand has). The consumer really doesn't have very many(None) options on the way it's delivered.

Contrast that with business users who demand a large amount of customization. If every household wanted a slightly different version of electricity well it would be a different world wouldn't it. The reason electricity works from house to house is because of regulations and standards. We are a long ways from that in the computing world when it comes to business applications.

I think there are some things that lend themselves to the cloud but there is still a lot that doesn't. It will be an interesting thing to watch over the next decade or two.

Jack van Hoof said...

Thanks for your comment Mark.

I think you are right about the electricity analogy. I only used the example to illustrate the cost effect. The price of electricity has such a low level that you don't mind the costs anymore. That may happen to software services as well, if delivered to huge numbers of consumers.


Craig Brown said...

Lovely diagrams Jack!

Makes the post worthwhole just for their beauty :)

Jack van Hoof said...

Thanks, Graig.


Sam Johnston said...

Actually I think the electricity analogy is spot on. The enabler for all of this is the commoditisation of the components (eg email is SMTP these days) in much the same way as standardisation of frequency and voltage allowed an open marketplace to develop for energy generation and distribution.

In any case your take on Cloud Computing looks well aligned with mine: 'The Cloud' and 'Cloud Computing' consensus definition?

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