Tuesday, October 27, 2009

Cloud Computing

Every 10 years the technology industry gives a new name to an existing technological paradigm. Then every vendor races to say how their solution is that new name. This is a very effective way to get media buzz and upgrade companies to the next generation service or product. If anyone says "How is this different then the old name?" That person is told that "they don't get it" or are given a line of incomprehensible verbal garbage. Yes, it is true that the technologies and applications have changed, since technology and applications are continually changing. These changes are not paradigm shifts, just next generation changes. To really understand the pros and cons of a so-called new technology that is really a re-named old technology, it is wise to know the old name, and understand it's pros and cons. Then find out what is new. Typically I find what is new, has everything to do with marketing and nothing to do with business decision making.

A perfect example of name changing an existing technology is "Cloud Computing", formally known as "ASP (Application Service Provider)"; formally known as "Time Sharing". Back in the real old days every IT executive had a very clear idea if they wanted to host applications internally or Time Share their applications. Time Sharing was having an application you used hosted on someone else's equipment. You paid a monthly fee to have someone else's people maintain computer hardware and software that you used. It was a strait forward pro and con business decision. Do you want to control your software and data or are you willing to let someone else control your software and data? How trusted is this third party? Who's head will role if something happens to your application and data? Do you have any control over heads rolling? What if the hosting company goes out of business, gets bought, or sold? Can you get your software and data back? Of course it is much easier to pay someone else to buy, manage, and run a data center then it is for you to hire and pay for all that hardware, software, people, and electricity.

The same business decisions existing today with Cloud computing. Do you want control over your data? Control cost something. In today's terms control means that you need to pay to manage your data vs paying a monthly fee to have someone else control your data. For some businesses this is a no-brainer. Cloud computing provides small and medium size businesses or large company departments with access to sophisticated application's they could never bring in house. From the technology industries point of view it is much easier to run a large data center that is tightly coupled with new releases of your software then to manage an extensive network of field support people who need to help your customers manage and run your applications. From a business angle, a consistent stream of monthly revenue is much easier to manage then living on new sales and service agreements.

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