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Wednesday, April 20, 2011

Cloud Computing and Dot Com

What is right about the “Dot Com” bubble? Yes, the Internet is everywhere now on every PC, every handheld and tablet. You can buy a lot of the things from Internet too, such as from Amazon.com, E*Trade.com, Netflix and so on. The thing that went wrong was the timing, it didn’t fully developed in 2001 but takes an extra 5-10 years for the Internet to be the Internet we know now. The other thing is that not every dot com idea turned into a long lasting idea. For example, we saw Internet grocery idea like Webvan came and go.

Internet's growth and maturing is leading to another big thing – Cloud Computing.

Cloud Computing is experiencing a similar growth pattern. Many cloud computing related companies have high valuation. A lot of the things analysts say will be right too. However, like Dot Com, it will not fully develop in year 2011. Instead, it will take an extra 5-10 years for Cloud Computing to fully develop and mature.

Market Maturity

Why do I need Cloud Computing or Cloud Storage? Just like 10 years ago, people may be asking, why do I need to buy from Amazon when I can already buy it from Wal-Mart or Borders?  In year 2011,  cloud computing will compete with local PC and local storage and most often limited to a supporting role such as online backup.In the future, the role will reverse as cloud computing will be the core IT infrastructure and local PC will be in a supporting role for cloud-2-local backup.

The bigger the organization now (like enterprise), the more complete the local IT infrastructure it has. The local computing competition will be too much for the cloud computing so the adoption in enterprise will be slow and has long adoption cycle.

The smaller the organization (like SMB and consumer), the less IT infrastructure it has so it is easier for SMB to adopt cloud computing and cloud storage.

The SMB is leading the charge into cloud computing and it is taking time for the market to mature.

Technology & Product Maturity

Back in 1995, the Internet is at least simple and unified around HTTP protocol. In cloud computing, it is much more de-centralized, with Amazon, Azure, Rackspace/OpenStack all defining their own standards. There is CDMI trying to be the Cloud Computing protocol as the HTTP protocol was for Internet. However the voice from CDMI is so small that it didn’t attract any of the cloud computing heavy weights.  Every leader is busy grabbing the market share and not many is available to wait for the protocol to develop.

At this stage, simple and intuitive products get adopted quicker. The products and technology overall are still developing and trying to reach maturity.

Partner & Sales Channel Maturity

Cloud Computing is supposed to be cheap and replace high cost local IT labor, right? This may be viewed as a threat to local IT work force and the adoption will take time. It is also cheap so it won’t be the first thing comes to mind for a sales guy when he is trying to make his quota. It will take time.

For  a company that focused on cloud computing in year 2011, it will need to wait for the market to mature, the technology and product to mature and for the partners and sales channel to mature. In the meanwhile, making product and services simpler and easier to use iteration after iteration, version after version. 

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