Industry Observer

US governments view on Cloud Computing

2009-05-13T17:33:00.000-07:00

Here is an interesting viewpoint on cloud computing from an actual large scale buyer,the US govt, as compared to vendors who corrupt the definition of CC to align with their product/service positioning. The view points have varied from as diverse as - James Governor calling -"If there is a consultant in the room it is not a cloud" and Mckinsey saying that only the IaaS piece is cloud computing.

The US Govt issued an RFI for procurement of Infrastructure as a Service and articulated a very clear definition of the cloud and what they are looking for.

Here is what the Fed say's :
________________________________________________________________
"Cloud computing is a pay-per-use model for enabling available, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is comprised of five key characteristics, three delivery models, and four deployment models."

They go on to describe the 5 key characteristics of
On-demand self-service , Ubiquitous network access , Location independent resource pooling , Rapid elasticity and Pay per use.

the Delivery models of SaaS , Paas and Iaas and the Deployment models of Private , Community, Public and Hybrid Clouds.
______________________________________________________________

I like their view point as it is an inclusive definition and does not restrict to Infrastructure only while also preserving the key tenets of CC like pay-per-use , location independence and rapid elasticity.

Seems like they are asking the right questions and are actually ahead of the Enterprise's in their thinking. The cool thing about this RFI is that it will potentially serve as a template for other Large Enterprises for procurement of Cloud Services. Funny how the govt has is becoming the leader in tech adoption in 2009 .

Summer of the Java Cloud

2009-03-26T14:51:00.000-07:00

For those widget company ideas (like here and here), which are typically worked upon by some developer as a hobby - paying $75 per month to Amazon,with the added overhead of managing your systemimages , seems too much.

I am to glad to see that java in the cloud with pay on true usage shaping up. After all Java is still the most popular language around. The options on the horizon include
a) Stax
b) App Engine for Java
c) Sun Cloud

On Pricing:
Most of the widget company ideas start off as a hobby and get a life if the idea has potential so to expect a developer to pay $900 per year(the base version of Amazon EC2) on something that is just an experiment is way to much. The starting price has to be free

It seems to me that google has the best handle on this market -The innovation sourcing market. They have a free entry point but then tie you down to their proprietry and great tools. Note that to a developer GREAT is a more important than propreitry and to the google business managers PROPRIETARY is more important than great. Not to say that one can substitute or replace the other. Ley us see what sun microsystems comes out with - They promise on interoperability but will they be able to give something great within the constraints of interoperability.

Note: I must also say that I recognize that sun's and google's customers are different and their Cloud strategy will have to align with their customer's needs. For Google it is all about recruting developers as franchise's of their advertising business. For sun it is really about Enterprise and Datacenter

Death of billion dollar opensource company.

2009-03-20T10:29:00.000-07:00

For those coming in late - IBM intends to buy sun for 6.5 Billion.

I read the news as the death of opensource as a revenue model, and validation of opensource as an important tool for running a software related business.

First of all let me start this blog piece on my definition of “what is an opensource company?” It is a company where you can associate the revenue of the company directly to the opensource product/service. While this statement sounds quite straightforward, it is in-fact not that clearly established viewpoint in the industry. People tend to bundle companies that exploit opensource technologies into the category of opensource companies. As per this metric companies like HP,Google IBM and even Microsoft all fit it as opensource companies because all are successful exploiters of open source technologies. I disagree. If someone like Capgemini was to say that they are in the People Business I can understand, because they make money from selling bill time of people. But if Google was to say that they are in the people business because people are there single differentiating factor - I would not agree. Google is in the advertisement business to any Financial Analyst.

To me companies like Sun Microsystems, Redhat , springsource and a ton of small companies are “opensource companies”.

Now going back to IBM-Sun. How are IBM and Sun really different from an open source strategy perspective?

IBM has a clear demarcation between for-profit-revenue generating products (like websphere , db2) and for-leverage-cost-only-opensource products(like eclipse , apache software etc), while SUN on the other hand has a phase-customer-in approach where all products are free to use and you pay for it only if you want an insurance policy against something going wrong.

This demarcation IMHO is the key to successful use of opensource. Opensource in itself is not a revenue generating business. It is a leverage and an execution strategy. It can be a very good market capture strategy (downloads leads to adoption), a very good component sourcing strategy (the way IBM uses Apace foundation), a cost effective developer relations approach and a very good distribution vehicle.

Today – Sun Microsystems and Redhat are the biggest opensource companies in the world. Sun software and services is more than a billion while redhat is still about 300Million. After Sun gets bought over by IBM there will be no billion dollar open source business and my guess is that someone like redhat might also get absorbed by Oracle /HP.

So my viewpoint is that future of an successful open source company is to get bought out to enable better monetization or somehow undergo metamorphosis in the way they think about revenue. To be able to monetize better you need to have relationship managers that talk to executives that actually make purchases. Yes downstream adoption of the technology in the organization is a good thing but it is not a differentiating factor for a purchase decision. You need to have a flavor of the product branded differently that has a mandatory cost(Rational studio and eclipse). Yes you might tolerate piracy but you need to make the customer obligated to pay.

Free for all approaches work for the first $50 Million revenue but do not scale.To grow to a billion dollar of revenue , you need to make customers obligated to pay after certain thresholds are reached.

How many computers does the world need?

2009-03-06T12:25:00.000-08:00

An interesting discovery for me today was - around 20 per cent of all the servers sold around the world each year are now being bought by a small handful of internet companies -including Microsoft, Google, Yahoo and Amazon.

And all this before cloud computing as really taken off. in-Aptly said by IBM CEO in 1943 and then aptly re-phrased by Sun Microsystems CTO in the present context - The world only needs 5 computers

The movement of 20% to 80% is where all the usage patterns and architectural patterns are going to change. As pointed out by Rashid in the FT blog - "every time there’s a transition to a new computer architecture, there’s a tendency simply to assume that existing applications will be carried over (ie, word processors in the cloud)."

A case in point to me is spreadsheets. The current-form-spreadsheet IMHO will not scale in the cloud architecture. With the massive amount of data available to business users in the cloud architecture - Datamining techniques like Clustering , Decision Trees , Network Analysis will be available as features and the current charting capabilities would really move to the world of visualization.

So I finally wrote a google gadget

2009-02-10T17:16:00.000-08:00

one of things I really miss in me from my collage days is the ability I had to solve math problems without a paper. I could solve problem in air because I remembered math tables upto 20 , generally remembered fractions till about 10/10 and also the pow() functions till about ^3.

So to try out the Google GWT API's what could have been better other than to write a Math Practice Gadget. Here you can click on the google button below to try it out

Thinking about the Google Apps Reseller Program

2009-01-14T14:43:00.000-08:00

Google seems to be serious now about making money from Google Apps . Read here

So the deal is that a reseller sells GApps at $50 per user/per year and gets $10 per user/per year as his commission. To the buyer the price is always $50 (irrespective of where he buys from Google directly or reseller).

So to make this a viable business proposition for a reseller - if you staff one full time employee to get this business going (fully loaded cost of about $100K yearly) you will need to sell 10,000 seats to break even. 10,000 seats is no small number. What kind of a business will need > 10,000 seats and which has such an hybrid- and semi controlled IT Environment that only SaaS based web apps with zero installation and server side control do a justice.

My answer: Organizations that have three layers in their business. i.e the consumer , the agent/broker and the Company. The middle layer in these types of businesses has been the most difficult to manage from an IT Standpoint because it is typically a small business and a different legal entity but is associated with the Company .

Just ask the your Real Estate Broker or your insurance agent how they get their Century21 or ReMax email. The more you will drill into the economics of just a simple email address the more you will realize the opportunity for Google Apps type SaaS solutions

Cloud Vendors and why Amazon should buy Sun Micro

2008-11-14T10:56:00.000-08:00

I added one more slide to the my Walk in the Clouds presentation .

What this slide try's to do is provide a heatmap of the the possible strategy of different vendors in the cloud computing space.

Let me start with Google and Microsoft- Clearly they have a 100% overlap in their desires and they are going for the end consumers of IT - Create a platform , Provide Software Apps and Make your devices work all in the cloud. There approach might be different(i.e Google trying to enter the market via Consumers --> Small Business --> Enterprise and Microsoft going the other way round - Move their Enterprise Customers first --> Then go small business ) but they are essentially targeting top part of the IT Supply Chain.

Sun : Like always wants to be everywhere- Dont know if they really can be though. They have a software and platform strategy while also having a Baremetal and HaaS strategy. I would really question their J2ME Strategy considering that Android is probably going to kill J2ME.

HP - To me is a still the traditional big iron vendor. Focussing on Hardware and leaving it to Google , Microsoft and Amazon to fill the PaaS , SaaS stacks. Their view of the world - Be an arms supplier to the Enterprise IT Armies of the world.

Salesforce.com : Started off in the SaaS space for the Enterprise and will continue on that route. There is a strong case for Google to buy Salesforce.com when it really gets on the Enterprise IT bandwagon.

IBM : a pure play Enterprise play. They have three businesses - Big Iron(like HP) , Enterprise Software (Websphere , Db2) and Services. I think they will really focus towards the "Private cloud" model because it fits in quite well with where they want to be. An interesting thing about "Enterprise Software" Vendors like IBM and Oracle is that they not have a lock-in (from a technical standpoint) .i.e they generally adhere to standards and interoperability(which at this time is really a must to be playing in the Enterprise Software space) - their Lock-in is really in their notion of "On Stop Shop" - "Sales Process" - "Relationship Management". Dont be surprised if you start seeing a move from IBM talking about interoperability of Clouds.

Now Finally - Amazon. This has been the greatest success in this space. A wildcard entry they really realized the notion of cloud computing. But now that the market is established - what do they do next? My guess is that they either need to go up the ladder(ie compete with Google and MSFT) or go down the ladder(Compete with Sun , IBM and HP).Sticking in the middle limits their opportunity for innovation. The next set of Innovations in cloud will now either come from the orchestration of consumer facing technologies (Cell phone , PC , applications) as a continuum or it will come from basic innovation in hardware. As the economics of hardware moves from being distributed(commodity PC's) to centralized (server based ) who says that x86 and multicore will continue on its run. Also as the business model for going for the low end of the market with Ec2 is proven - It is only logical to assume that the next real innovation in data center technology will come from the big-iron vendors.

So at a Market Cap of 3 Billion Sun is dirt cheap and hence a good opprtunity for Amazon to downstream in the supplychain of Cloud computing

Insurance 2.0 : Googlelization of the Insurance Industry

2008-11-03T09:40:00.000-08:00

When I got to know that there was a suggestion at the Gartner symposium that google is the next big entrant insurance carriers should be scared off, the first though that came to my mind was - Balooney - why would google enter a totally unrelated business which has no leverage from its existing business - at best I though they could come out with insurance products for the cloud computing space - i.e data security insurance , open source indemnification(which is really an insurance business).

It was not until I was relaxing for about half an hour in my hot water tub that I realized - Why not?.

What is Google's greatest asset? I would argue that it is - They know their customer too well. By knowing there customer I do not mean the traditional meaning implied by having a CRM some excellent relationship managers etc. What I really mean is having the ability the drill down to each individual customer and knowing what is going on in customers life- what is on his mind(google search) , what kind of news is he reading(google news) , what does the customer watch(youtube), where does he generally travel and at what speeds does he travel (google Android) , What kind of friends he has (open social) etc.

Next question. If you ask an Insurance executive what is the key differentiator for an insurance company? You will probably hear - Underwriting and Rating. And what makes better underwriting and rating - Knowing your customer very well. How many miles does he travels to work everyday. DMV records , Credit history , Claim history ,Demographic information and a whole bunch of other factors- most of it available as Pay for use data by data vendors like DNB, Choicepoint etc.

So needless to say that there is a clear leverage google has from its existing business to the insurance space. and getting into this space will further strengthen its dataset on each customer as it will get a different aspect of data on the customer.

What has been missing in the underwriting equation in today's insurance companies is knowing about an individual more than the bucket (category) he belongs to. i.e Per Customer underwriting and more predictive modeling based capability as compared to historical statistical analysis of categories. i.e would you be more willing to underwrite a type-a profile (no-accidents , no-claims in the past) but who has recently been searching on - "How to get a gun" and has been generally out of house between 11.00 PM and 4.00 AM (known via Google android) to someone with maybe one accident in the past one year. In todays model of underwriting the second example will be deemed as riskier which is probably not right.

Irrespective of whether google enters insurance or not I do feel that the next generation insurance company (Insurance 2.0) will have to be a Web2.0 company - that harnesses every interaction of an individual in the digital world (Searches , Movement - via android like technology , Relationships-via social networking ) to better its underwriting and rating capability and choose a better risk.

Google = Microsoft and Amazon = IBM

2008-10-30T10:46:00.000-07:00

Wow - how did I come up with the equation.

Here goes the story.
Google's strategy is what Microsoft's strategy was in the PC era.
- Start with bottom of the market (Consumers --> Small Business and then Enterprises)
- Create Lock in in some form or fashion. Google creates lock in with non-standard based technologies
a) Google App Engine(a totally google technology that no one else supports or has).
b) Android - intelligent way of creating proprietary technology while also leveraging the user base of Java without using J2ME.
On Android: The key customer for Android IMHO is small business. When all small business's try to sell their stuff via google(adsense , Location based advertising) - that is when google will make money. Android is really a play of getting more and more small business's rely on google for sales.

c) Google Apps - Hosted on the cloud with Google API's - once a small business gets hooked into this - the switching costs to something like office live is not going to make it worthwhile to move.

Google is clearly going after the small business now. Their aim - make it as simple as possible for getting small business onboard and don't bother of open standards , interoperability etc which generally come into an Enterprise Sale discussion.

Amazon IMHO is now really targeting the Enterprise. Although Amazon has also come to the market from bottom up(Startup's were their first customers) but now it is clearly going for the Enterprise

It is not a tightly integrated stack. i.e you can pick an choose EC2 , S3 , SDB or SQS independently and hence no lock in. There are some non-standard technologies like SDB and SQS but they are really at the edges of the offering.

Amazon in reality has an open offering. Use EC2 and if you do not like it you can quite easily switch elsewhere.

The key to Amazon's success is going to be Cost of operations which will be achieved by getting scale and being efficient while key to Google's success is going to be Customer Lock which will be achieved by releasing compelling technology to build a developer ecosystem.

So what happens to the Hp's IBM's and Sun's of the world. Lets See... I dont have an answer yet.

Let the real test of open source business models begin

2008-10-09T13:24:00.000-07:00

After reading about the dooms day in venture cap , I could not help thinking about the impact this might have to the open source world.

With things like zero-based budgeting and re-looking at the base fundamentals of your financial models – it is going to be very hard to justify investments with no direct link to revenue – i.e open source is going to come under a lot of scrutiny.

Besides, when every company is financially stressed out, there will be a lot of pressure on improving the productivity levels in the corporation and as a result the supply of free developers/testers that the open source world gets at the cost of the corporate world will now be constrained.

People do open source for several reason but from a business model standpoint – You do it essentially for two reasons

1. As a Market Capture strategy – Achieve ubiquity, trade revenue for market share. The strategy here is that make pennies on a large number of transaction as compared to dollars on a small number of transactions. The issue in the current financial environment is that if you have a product that has not yet reached ubiquity you will have a negative cash flow because you probably do not have year maintenance contracts.

Sun Microsystems is right into this category of open source players and I think has a mix of successful and un-successful open source products. Sun seems to think that it will benefit from the downturn , but I would be hard pressed to believe that some of its products like openoffice will not be questioned for further investments.

2. As a sales influencer to some other product or a service. A case in point is google - Google does a whole bunch of stuff that is free hoping that you would ultimately end up clicking its advertisements if you are somewhere in the google world. With the pressure on Google Stock and lets say a decreased add spending – what happens to projects like GWT would be worth observing.

Comparing AppEngine , EC2 and Caroline

2008-10-08T15:44:00.000-07:00

I gave a talk to the Los Angeles Java User group on the topic of "Comparing Google App Engine , Amazon Webservices and Project Caroline".

A lot of what I presented was really distribution of existing content and discussions. The only unique perspective that I think I added was the slide below.

The way I look at any player in the Cloud Computing space is one of the four buckets

1. Bare Metal - People and Process driven , essentially traditional style with some Hypervisor - the only service opportunity here is the traditional EDS type outsourcing that utilizes skilled labor and pooled labor.

2. HaaS - Hardware as a Service. My Definition: Programmatic Interface for Hardware Provisioning . EC2 fits in perfectly here. Moves up from BareMetal as it minimizes on "People Services" and focuses on Pooled hardware capacity and real-time provisioning of hardware. Typically billed by Clock time - offers a lot of flexibility in terms of choice of language runtimes.

3. PaaS : Platform as a Service . The issue of scaling has been abstracted out by the Platform and you have flexible services that automatically provision computing. Also refered to as Fabric . App Engine is an excellent example here. Another interesting point here is that you billing will typically move from Clock time to CPU cycle time - because there is no longer some instance you need launch.

4. SaaS : software as a service. Gmail , salesforce.com , ebay etc. You basically do not care what is happening beneath the stuff. You are the consumer of the software and expect the application to run

Here is the full Presentation.

Cloud Computing

View SlideShare presentation or Upload your own. (tags: ec2 appengine)

The coolest feature of chrome

2008-09-04T16:25:00.000-07:00

So - What do I like about Chrome . "Create Application Shortcut" - This is probably the reason Google created Chrome. Isnt it all about the platform.

You can create shortcut , put it on your desktop and open it directly as an application.
Now there is nothing new about this.

The cool part is that for Javascript heavy applications like gmail , Google Reader - it zooms. and atleast for google apps It seems like I do not sign in again.

I also like the application like look for chrome when opened through the shortcut.

Considering that Chrome's starts a new process for every tab - this use-case seems like the most used case for me , as pure HTML browsing is not cool in chrome , firefox is probably better .

So what does Google open source ?

2008-09-02T15:14:00.000-07:00

In light of the announcement by google to develop a new Open Source browser Chrome , I could'nt help notice that all open source products from google (GWT , Android and now Chrome) are client facing and essentially fuel for making Cloud Computing a reality.

Very eloquently said by Nick - that "the weakest link in the Cloud is the browser" and taking it to the next level of serving applications only brings them closer to making Google as THE platform for SaaS development.

Note that google has not open sourced any of its server side technologies like BigTable, MapReduce etc. and I dont think they would open source them unless these become commodities (with Hadoop etc) and there is cost leverage by open sourcing them.

This also make me think - why is Sun Microsystem (NASDAQ: JAVA) open sourcing its core revenue streams(software products). If their vision is really to make money from hardware and they view software as an enabler to hardware sales - I can understand. But they are not doing a great job at hardware also.

SOA adoption down from 2006 - Are you surprised?

2008-08-27T22:36:00.000-07:00

Not me. Having read the story and a very valid perspective from Joe McKendrick . I think a point that got missed is that : wasn't this expected?

To me it was. The reason at a macro level is that time and again we have seen that "Information Technology Industry " is the definition of a cyclical industry. Just when you thought that Rational Unified Process was the silver bullet for software development , Agile methodologies came about and challenged RUP. Just when you thought that the only way to build high performance websites was by purchasing high-end Unix servers , Horizontal scalability avatar was realized via google and showed that you can put together a ton of small PC's and run a web-scale application like that of google's(note that this might change again with red-shift).

The problem in IT and business is that just about the time when you can solve a problem , it actually moves elsewhere. SOA came into existence when the mantra for doing business shifted from "Think Globally and Act Locally" to "Think Globally and execute globally" . So executing globally required lot of governance , control and to some - excessive redtape. It lead to the creation of a new position in the IT organization - VP shared services , responsible for managing all shared assets by the organization.

Now the Mantra for business seems to be "Think Globally , execute globally and Collaborate Globally" - By collaborate globally I am referring to Crowd sourcing and open source techniques. The collaborate aspect changes the IT organization structure yet again. Instead of having a business head for "shared services" whose aim in life was to own everything common used in the Enterprise , The Lines of businesses now have the option to use crowd sourcing techniques and leverage SaaS type solutions to achieve their goals. When they do that there obviously will not be any synergies between the styles of consumption of services but clearly there will be a lot of JBOWS (Just a bunch of services) . As a result in my opinion the SOA concept of coming up with a master API that will be used by everyone is failing.

Why the Cloud Computing paradigm will enter Enterprise faster than you think?

2008-07-30T22:33:00.000-07:00

The discussion of adoption of the cloud computing paradigm in the Enterprise generally shifts towards outsourcing of infrastructure and the associated security concerns for an Enterprise. While the outsourcing part is an important part of the story that will have significant effects on the low end of the market (Small to medium business), my take is that it will not have a big impact on the Fortune 200 Enterprise clients.

What will probably happen to the Enterprise Clients is that they will end up building their own grids for internal consumption. You will start seeing vendor offerings like Sun sell -Project Caroline, that will probably be the key differentiators for the big iron vendors. (although Project caroline will potentially be the Sun Grid offering to the Small and midsize business’s - I can very easily see a situation where Sun Sales force goes to a client like Morgan Stanley and makes a sales pitch for Solaris and its hardware based on its Project Caroline based capabilities)

So going back to my original point about why do I think a case like above will come to the Enterprise faster than you think.

Most of the Large Enterprises typically have an infrastructure group that manages its data centers. This is how the provisioning of new hardware typically works in an enterprise

Applications VP - I need to unarchive some 300 GB of data and then use it for some analytics that I need to perform at least once every month.

Infrastructure Guy - 1GB costs about X $ and 1 LPAR with 2 CPUS is about Y$ per year. You need to multiply this by 5 years to get the ROI calculation for your project.

Applications VP - Wow ! Why is the cost 1.7 times Frys.

Infrastructure Guy- Well it is all the overheads; The Company needs to pay guys like us who ensure that additional storage is installed correctly and that your group adheres to all the norms we have established

Applications VP- OK (whatever! Since I do not have any options!) , when can I get it.

Infrastructure Guy- it will take 2-4 weeks after the purchase order is approved and quote submitted.

This is how it will work when you have a Computing Cloud running internally in a large Enterprise.

Applications VP - I need to unarchive some 300 GB of data and then use it for some analytics that I need to perform at least once every month.

Infrastructure Guy - Here you go , call this API for Adding Storage and launching an instance. You will be charged by the hour

Applications VP- Cool , I am charged ½ of what you guys charged me earlier and I have the ability to turn off my meter when I do not need to computing power.

Infrastructure Guy - Yes , They have cut down on group and all my buddies who did not have scripting skills and just PowerPoint skills have been asked to go. I guess our overhead is now 1.1 X as compared to 1.7X .Besides if you consider the savings you get by switching your computing off when not needing it , we are probably cheaper than frys.

So to sum it up- the fine grained transactions between the apps group and the infrastructure group will become coarse grained via development of API's and when that happens the labour costs will go down like anything.

Cloud computing : Its not just about the infrastructure

2008-06-30T17:34:00.000-07:00

So what is the value of Cloud Computing to me(someone who is not an infrastructure guy) ?

The important shift in my opinion is the change that will take place in the programming model for Enterprise Apps as a result of this new paradigm. The SDLC is going through a major change from Develop - Test - Deploy - Release as time/people sliced functions to Develop-Test-Deploy-Beta-develop-test-deploy-Beta2 to functions within the scope of developer responsiblities.

Imagine having your dev/test/prod environments in the cloud all driven through eclipse/netbeans and the movement between the environment's driven through course gained services like AWS webservices API that interact with your hardware to provision the application.

Imagine a library of widgets/services that will make into the Enterprise just has open source made its way in.It is really the re-birth of the Component Based Software taken to the next level.

Imagine treating things like -webscale computing , massive parallel processing- hadoop , specialized analytic capabilities , etc as commodities that can be purchased at any point of time for an application.

Imagine having a large number of small software vendors that thrive on delivering small specialized services/widgets to whom infrastructure is an operating expense and not a capital expenditure.

The above to me is the big switch. Besides the aspects of driving efficiency in infrastructure as a result of scale , the could computing paradigm will enable the building of a large number of software services players that will ultimately compete with the Application development department in the Enterprise.

Note: the link to Eric Schmidt's Bear sterns conference as an interesting observation of -"there will be small number of big players and a large numbers of small players in the cloud computing space"

Realtime Analytics for the rest of us

2008-05-16T12:03:00.000-07:00

My two cents added to the discussions here and here.

John's points about the DW purchase decision being pushed to the SaaS vendor and being less relevant to the enterprise (analytic application mid-market customer) is the key to the big switch. A similar analogy would be that when an Enterprise gets its electricity from the electrical company (the GRID ). All that it cares about is the SLA – Can the supplier meet my XXX Megawatt per hour demands at peak loads of YY, 24/7 and after that the pricing is the decision point. What kind of generators the electrical company uses (Hydro , coal , windmills) is an important decision for the electrical company but certainly not relevant to the Enterprise using the electricity.

So this analogy leads to a bit of soul-searching for DW appliance vendors like Terradata , Greenplum etc. “Who is their customer?” are they taking up the role of GE (who manufactures turbines , windmills etc) to serve the SaaS vendors OR do they want to be offering solutions at a level higher to the end consumer that ultimately end up using their appliances. I think a little bit of both and mixture of a lot more partnerships is probably what is going to happen.

It is also interesting to note two other trends that will shape the BI world.

Fragmenting of DB market to specialized Database
Availability of webscale level specialized Databases like BigTable , Hadoop/Hbase at very low entry points.

These trends will lead to a development of a longtail-type market for real-time analytics in an SaaS model (example – Recommendation service based on collaborative filtering, using Predictive modeling results during the underwriting workflow for approving a quote).The reason this will happen is because

a) These kinds of applications are more focused and can be performed in silos’. The whole concept widgets moving at the next layer of functionality and reuse.

b) They are also better served by vendors whose livelyhood depends on bettering the algorithms that power the analytics engines.

c) With things like Bigtable , Hadoop/Hbase exposed to the world at a very low entry point , all it takes is one guy to improve an algorithm and expose to the world as a service.

Update: May 22 ,2008 : I ran into one more Cloud computing Data analytics solutions which is another Column oriented database check it out at Vertica

Cloud computing and Datawarehousing

2008-04-09T11:57:00.000-07:00

Following my last blog entry , my brain continued elaborating on the thought of Cloud Computing Adoption in the Enterprise.

Having worked in the Enterprise Space for So long , I am hard pressed to come to terms with the notion that Enterprises will be willing to completely outsource their Information Management and IT infrastructure and more so in a constrained environment like that of Google AppEngine.

Amazon AWS with its ala carte is still a better option to Enterprises as compared to Google App Engine. As you can pick an choose what you want. I think the key is that any Cloud computing vendor needs to "FIT IN" into the Enterprise's Architecture . This basically imply's that more entry points you have to the cloud infrastructure the more use-cases you will have for Enterprise Adoption. So , it seems like Amazon has a better strategy for Enterprise Adoption. Another use-case for Enterprise Adoption is via an SaaS vendor case in point - Vertica . Vertica is a user of cloud infrastructure from Amazon. But the way the cloud is coming into the Enterprise Architecture is via an SaaS vendor.

Another use-case that came to my mind is the impact to the EDW world. With things like BigTable and simpleDB exposed , why would an Enterprise invest in highend Databases like TerrrData - why not use a proven scalable platform like BigTable to run your analytics. In any case you need to do your EDW work in house on separate machines from your core systems - So using an on-demand infrastructure for such needs makes sense.

Shame on you if you cannot start a .com now !

2008-04-07T21:24:00.000-07:00

Life could not have been better for developers. I thought that what Amazon had done with AWS was the best developers could have had , But now we have one more entry into the space-- Google App Engine

It is interesting to see how the SaaS/HaaS space is shaping up. Googles App Engine seems like a layer above AWS. i.e a hosted development platform - the toolset for developing an application on App Engine will be focussed and consequently also limiting. App engine provides excellent integration to google's services(like single signon etc) but it is also limiting , i.e I cannot use Java (at least right now).

AWS on the other hand gives you more power (build your own machine the way you want it) but it has a higher learning curve and if you are running a shop on EC2 you will require a System Administrator to manage your website.

While at this nascent stage of Cloud Computing it seems obvious to compare AWS and Google's App Engine but I think that as the market evolves both the offerings will really address separate markets. Google will get its pie from transitioning the traditional Rapid Application development tool (RAD) customers and Amazon from the traditional IT Infrastructure shops. They certainly converge at some level but it will be years before that happens.

It is also interesting to see that traditional IT Majors like IBM , SUN and HP are missing in action from this revolution. One reason could be that at this point AWS and AppEngine seem like a mom-pop shop offerings(Small business and non mission critical) , how do these offerings translate to Enterprise customers and what are the SLA's that will mature these offerings to Enterprises is something I look forward to understanding in 2008.

Maybe Google and AWS needs someone like Capgemini or Accenture to do this.

If you have the time check out the video on google app engine

The Long Tail - Taken to the extreme

2008-03-20T17:28:00.000-07:00

OK , I have read the long tail and I agree it is a great book. It is very interesting to see how Amazon is taking the concepts of Long tail to the extreme.

Refer : AWS fulfillment service : is a service where you can use the Amazon warehouse to store your products and they will then manage the shipment , order execution and payments for the item.

Earlier , when AWS-EC2, S3 got introduced I really thought that it was vertical integration. But now I am starting to believe that what Amazon is doing is just scaling up every core competency they have. This is not really vertical integration in the sense that it is not coming from strategic business decision of getting into a market, but really coming from the fact of making the overall cost model of operations better. Volume drives costs down and if Amazon can manage to get more shipments there cost per shipment will go down. I don’t thing that they are getting into the warehousing business big time (i.e taking shipments from containers from china etc) , But seems like a experiment that might / might not work.

The key thing in Long Tail economics really boils down to - what is the incremental cost of exposing an Enterprise's inner business functions to the world as a competency. Frankly if you need to re-architect your processes to support this you need to rethink on adopting Long Tail concepts into your business.

Database 2.0

2008-02-20T23:53:00.000-08:00

For a long time (decades I believe) it seemed like the General purpose Database was the silver bullet. Object Oriented Databases tried to take the shine away from RDBMS , but only to strengthen the notion that RDBM’S do best at what they are supposed to do – Store , Query and Update Data.

The application development world adjusted to the notion that the Object Relational mismatch is a reality and instead of fighting it let us work with the RDBMS systems and make world a better place. Tools like Hibernate had great success because they accepted the strengths of RDBMS as compared to competing technologies at that time like EJB's . The Enterprise was also caught up in the ERP wave where everything in the Enterprise needed to have a predefined structure, vocabulary established etc.

2007 brought some interesting changes in the DB world. Web 2.0 brought the concepts of self organization , realization that all information does not reside in-house , that everything cannot be structured , that Information Management is not just EDW / BI - there is a whole world out there with unstructured information and Semantic Web . Consequently SQL and RDBMS is not the silver bullet.

2007 also brought some interesting DB’s to the forefront including SimpleDB , BigTable , HP Neoview , CouchDB each of these serving very different purposes finetuned for particular needs.

So the definition of Database 2.o in my opinion is that it is the realization that all information in the Enterprise cannot be out in the Corporate RDBMS , cannot be structured and that there can and will be multiple datasources to information (within and outside the firewall)

So what is my point ?

I think the Database market is splitting into two layers
1. The general purpose database market - now turning out to be a commodity market
2. The specialized DB market

So finally I would like to close on the trigger that got me to think the above - The mysql acquisition by sun – Why does sun need a database product NOW ? it has severe wall street issues and convincing the market of buyout of a company that gives away free products is going to amazingly difficult.

Here is the answer I came up with .
With the technology and engineering capability needed to build a general purpose database generally available – Building a high performance RDBMS system that competes with the likes of Oracle and DB2 does not seem like a very big challenge. So if competing on price and brand are your differentiator's in the general purpose DB market then what better way to compete by giving the product free.

Now monetization on mysql and revenue potential is a separate discussion. My discussion above is keeping the number of deployments in mind.

more reasons for the Sun / mqsql acquisition

Struts , JSF , spring mvc , GWT - what is it going to be

2008-02-01T18:17:00.000-08:00

I was reading the blog at java based web frameworks for 2008 and ended up doing a query on http://www.indeed.com.

So I compared the following
1. Struts
2. JSF (Java server faces)
3. GWT (Googles web application toolkit)
4. Spring MVC

Here is what I found

And Now comparing the Relative growth

As I had expected Struts is the clear leader and my guess just like Mainframe's still are a very important part of the Enterprise , Struts will always be there in the web 1.0 world.

JSF - to me is really a web1.0 technology -just an upgrade to struts.Sun has a knack of making things complicated and I dont think it has handled JSF any different than EJB's 1.0.

Spring MVC - has an interesting story, Spring Core(the middleware piece) has a very strong acceptance and spring core has a bigger audience than spring mvc. It's simplicity of programming model , well thought feature's make it a good candidate for use.

GWT in 2008 is IMO going to be the real winner. About an year ago I had posted that 2007 would be the year for GWT . Well looking at the numbers I think it was. It has not overtaken struts but the relative growth has been the highest - 30,000 % WOW!.

It has three things going for it
1. Java based (so the corporate java developers have an upgrade path)
2. It exposes a whole new capability of ground up AJAX applications not available in Struts , JSF or spring MVC
3. Simple (in every way - learning , developing , building , deploying)

I ran into a client recently who was using GWT very aggressively , Spring core and Spring MVC.When I asked him about why he was using Spring MVC and GWT- he commented the following

- Everything on website cannot be AJAX based application style. I will have some pages that really are suited for html (jsp) type content . I am using Spring MVC for that(example login page , help pages )
-Also Spring MVC is also a good place to put everything together. It works well with J2EE file structures etc and a great way to launch everything and coordinate the website.

The above view is what I think will shape 2008.

Google Energy and Vertical Integration

2007-11-27T09:51:00.000-08:00

Google’s(NASDAQ:GOOG) announcement to enter the Energy space kinda surprised me but when you look under the hood there seems to be very good business justification for this.

Google is doing what Henry Ford did in the auto industry and Rockefeller did in the Oil industry – Vertical Integration.

Vertical Integration is defined as - The ownership by the same company of different functions in a supply chain relating to the provision of a particular good or service. Vertical Integration is generally done to lower the transaction costs in the supply chain and synchronize the supply and demand across the chain. Vertical Integration was pioneered by business leaders like Rockefeller and Henry Ford , where after reaching a certain size in their business they expanded into owning the supply chain so as to minimize the risk , control quality and lower transaction costs. Rockefeller after owning oil refinery branched out into oil distribution, oil retail and oil production.

Electricity costs for any SaaS vendor ( Google included) Electricity costs are significant and it is only going to get worse with Oil at $100 and the Global warming problems with coal. So it makes sense to manage the risk on the supply side and try to solve the problem. Google with its core competency of managing and monetizing innovation is also well placed to take up the challenge.Besides in my opinion Energy is going to be next frontier of innovation and to keep on sustaining at PE multiples of 50's long term GOOG needs to be looking at the next growth industries.

What got me thinking on reading about the Google Energy post is the approach Enteprise2.0 companies(like Amazon and Google) are taking towards Vertical integration. Thought leaders like Don Tapscott have argued that in the 2.0 world the transaction costs (the costs for collaboration) that justified vertical integration have evaporated to almost nothing now and vertical integration potentially does not make sense now as the integration costs internally in the Enterprise could be more than taking the route of ideagoras or Crowdsourcing

Google’s Energy entry and Amazon’s Webservices business in my opinion are Aspirational Core Competency based Vertical Integration transactions.

For Google:

Aspirational –Energy is the next thing
Core Competency - Managing and monetizing innovation
Vertical Integration – improve downstream supply chain.

For Amazon:

Aspirational - Become an HaaS Vendor
Core Competency - Software Engg and Systems Management
Vertical Integration - improve downstream supply chain.

Update : dec 29th: Here is another example for Googles vertical integration strategy. Also interesting to note that Google has been integrating downstream and not a lot upstream ( Android) , it did not not end up launching a GPhone as people had predicted.

Business IT Alignment and SOA governance

2007-11-07T11:26:00.000-08:00

Congratulation Bryan Mjaanes on successfully implementing SOA program at Zurich Insurance .

There was one slide that I really liked that in my opinion captured the Business IT Alignment problem quite well.

The diagram explains quite beautifully how the information flow and feedback mechanism's work for SOA governance. The link from Enterprise Architecture / SOA to Business Process in my view represents the two constituents in the Enterprise that need to be aligned and in my experience this link is generally the weakest link in the picture. What I have seen in Failed SOA cases is that the shadow IT(part of Business) will end up using SOA tools and technologies (webservices etc) and solve their business problem and keep on shouting to the world that they implemented an SOA architecture. See diagram below , This generally happens when the SOA program does not have a senior management buy in and the Enterprise Architecture group is really a figure head and not very powerful.

Subprime meltdown in layman's terms

2007-11-04T15:47:00.000-08:00

Want to explain the subprime problem to your Dad without boring him??

Funny Video :) Enjoy!