A recent post on GaryNorth.com:
“Cloud computing seems to be the next big shift in personal computing. Investing in the companies who will prove to be the big winners may be very profitable. I don’t even know who all the players might be. Google, Microsoft, Apple, and perhaps IBM should be in the mix. I’m thinking Google wins biggest. What do you all think?”
For more than four decades, we have modeled computer systems communicating with other computer systems with a “cloud” in between. I have personally taught classes wherein a cloud was at the center of my course graphics, as far back as the early 70’s.
The “cloud” was merely the short-hand reference to the communications infrastructure. It serves that purpose today.
But what is being communicated? This is not a rhetorical question; it is at the heart of understanding what is occurring.
Today, the “cloud” label is being used as a code-word for the next evolutionary morphing of business process automation from the old “client-server” model (circa 1990), and the prior “mainframe” model (circa 1960’s). But it is much more than automation. It is the next evolutionary phase of that enabler of all business: “communication.”
Both the mainframe and client-server models of computing were based on hardware configurations, which melded the historical paradigm of “big-boxes-in-a-special-room” with “my-box-on-my-desktop.” One global information service provider modeled client-server solutions as five implementation scenarios, on a contiguous scale: At one end of the scale, the computer technology supporting business processes were largely housed in traditional computer centers, as mainframes, and the user’s “PC” was a dumb terminal to access the central (mainframe) computer. At the other end of the scale, the PC on the desktop was the workhorse for processing, and the mainframe computer served up raw data. In between these two ends were combinations of the ends.
Using first the mainframe model, then the client-server model, business could flexibly solve their current business processing needs: compete better, lower costs, improve profitability. But this was still in the days of relying on communication via private networks. It was still largely a “hardware world,” which was expensive. As in capital investment. But, the industry was shifting to a “software world,” in an attempt to overcome the limitations of that hardware world. But, still subject to the limitations of “private” (read: expensive) communications.
Then came the Internet, which allowed ubiquitous data access. Free-market access. Saying this with an analogy, the Internet accomplished the equivalent of America’s intercontinental railways of the last half of the 19th century. It opened communications to an entire continent. Cheaply.
And the key to business has always been communications. Just ask Marco Polo; or Christopher Columbus. Or, just ask this guy.
That ubiquitous communications served to remove the borders and limits imposed upon business by the prior communication systems, which then allowed every Tom, Dick, and Harry to develop and implement solutions while most of the world didn’t realize there was a problem. All kinds of solutions. For example, Hypertext Markup Language, with its brilliant, but little-understood key into the 21st century: the URL. (Invented by a modern-day Jesse Chisholm.)
Today, the Internet itself is a commodity. Low-cost Internet access is everywhere. Just like the railroads 100 years ago.
Because of that ubiquitous communications, entrepreneurs with little hardware, software, and communications knowledge have taken the evolution to the next level: ubiquitous access to business processes; hardware and software independent. In other words, the technical specialists no longer control the market, and one can purchase a business process that operates from almost any hardware/software platform. The process is online; in the cloud.
This means that with a credit card and an Internet connection, I may set up and operate a profitable business from my desktop or smartphone, purchasing or subscribing to the automated business processes that I need, as needed. This also means that the business processes themselves are becoming commodities. All enabled by the Cloud.
For example, the following provide automated business processes at no or low cost:
www.google.com/calendar or mail, or docs, or …
It’s Not Your Daddy’s Paradigm
We no longer live in a hardware world. It has been commoditized. (This is why computer manufacturers have out-sourced; or are out of business.)
We no longer live in a software world. It has been commoditized. (This is why EDS no longer exists as a company.)
We no longer live in a private communication systems world. It has been commoditized. (This is why Cisco is reducing its workforce.)
We are living in a business process world, automation of which is now being commoditized. (This is why in-house applications are losing market share.)
The big companies are scrambling to respond to the demand that has now been unleashed by the shift of paradigm. But, it is a paradigm of commoditized automated business processes. Not hardware. Not software. Not communications.
Because it is a paradigm shift to automated business processes, it is an entrepreneur’s market, not a technology market; and it will be companies like Evernote, Hostgator, and uStream that reap the largest rewards. To the extent that Google and Amazon retain their entrepreneurial modus operandi, and stay with or ahead of the commoditization, they will prosper.
In a sense, commoditization is the result of communication.
This, the Cloud has Wrought.