Amazon Web Services Takes the Natural Next Step

Last week amazon announced that they would add a new offering to their web services suite:  a Content Delivery Network or CDN.

I have been waiting for this announcement ever since I first heard about the S3 plans several years back.  It is a natural next step.  And, I think a very smart decision

I have been known to slurp Amazon on this blog in the past, but there is a reason for that.  They often make great decisions that truly help out small and medium size businesses. 

In the past five years, I’ve rolled out five major CDN implementations for a couple different media companies.  One of the projects focused on audio, two focused on video,  and the final two dealt with the caching and distributing HTML content.    All five projects were successful and – despite a few hiccups with one of the video CDNs – I was very happy with the overall performance.

However, the one part of the projects that absoltuely sucked was the contract negotiations.  They were a nightmare.  And the major CDNs don’t make it easy for you.  You have to estimate your traffic up to a year in advance, guess your 95th Percentile Bandwidth allocation, etc.  And then you get sucked into yearly minimum commitments that may or may not be reasonable depending on how good you can predict the future.

Amazon takes this entire problem out of the equation because they use the same payment model as S3: pay as you go.   There are no major contracts to sign and nothing to commit. 

This is a big step for small and medium size business that could never afford a CDN in the first place.

What Google Chrome means for the Cloud Computing

Google recently announced the launch of their new browser to the world: Google Chrome.

At first, it just seems like another browser.  Between Internet Explorer, Firefox and Safari – everyone already has their favorite browser of choice.  So why do we need another one?

Chrome launches with everything you would expect in a browser and then some.  There are some cool new features suchs as dynamic tabs, multiple threads, faster and safer browsing, etc.

However, that is not what is exciting to me.  What is really exciting is that Chrome is not just a browser.  Chrome may be the biggest step forward in the rise of cloud computing and Software-as-a-Service that we have ever seen.

 As Fred Wilson points out – Google is not trying to build a better version of Internet Explorer or Firefox.  They are trying to build a better environment for running web apps.   Nicholas Carr has similar thoughts.

If you think about it, HTML was invented well over a decade ago and has only been modestly tweaked since.  All of the innovations you are seeing on the web today are being done in spite of HTML’s limitations.  With Chrome, we get a fresh slate.  Of course HTML will still work.  But if you want to write a groundbreaking web app – you are no longer bounded by the same rules that we have been dealing with since Netscape was introduced.

Of course, these inovations are still months if not years away.  Chrome is still in beta mode and we have no idea what its adoption rate will be.  Nor, do we know if the other major browsers will follow their lead.   Additionally, developers have to shift their way of thinking about the web in order to take advantage of this new model.

But, call me excited.  This has the potential to be the most groundbreaking innovation that we have seen in years.   Congrats Google and way to push the envelope.

The Future of MS Excel

Excel

In a recent post, I discussed the future of Microsoft Office in light of the rise of Cloud Computing.  However, I conveniently left MS Word and Excel out of this conversation because the discussions on these two software products are  interesting enough to stand alone.  Today, we’ll tackle the future of Excel.

I’m just going to come right out and say it: Excel is a hell of a software program!  I’m amazed by some of it’s functionality and consider it one of my most essential tools. If you know how to use it properly, there is very little that the program can’t do.

Sure, everyone knows how to sum the values in a row or column.  This is Excel 101.  But there is so much more.

There are functions galore, you can reference multiple worksheets and don’t even get me started on macros.  Excel macros have saved me more hours in my life than I can possibly count.   I absolutely love Excel macros.

OK, now that we have established the fact that I am a data geek, let me explain how this relates to Cloud Computing.  The point is that there is no online product that rivals the power and functionality of Excel.   Granted, the basic functionality can be captured online.  And the online products do a fine job at replicating the simple concepts behind a spreadsheet.

But we are more than a couple of years away from having an online product that can compete against Excel.   Give me a call when I can write a macro on a Google Docs spreadsheet.  I’ll be waiting.

I have been a software developer for years and, although I no longer do this on a day-to-day level, I still keep up-to-date with the industry trends.  The fact remains that some functionality is much, much easier to build into a desktop application than a web application.  We have made many great strides in the past couple of years with AJAX, Ruby on Rails, etc. – but there are still some significant limitations.  It will take a pretty ingenious breakthrough to replicate the powerful functionality of Excel in an online application.  I’m not saying it is impossible – but I’d love to see it done right.

In addition to the complexity involved, there is another reason why I think it will be quite some time before Excel gets overtaken by a cloud competitor.  It all has to do with the Network Effect.

Everyone I know uses Excel.  If you are in an office environment, chances are you pass around an Excel spreadsheet at least once a week.  More if you are in technology or marketing.

And these hand offs don’t just happen intra-office, but also with your customers, clients and partners.  You can send an excel file out to just about anybody with 99% certainty that they’ll be able to open it.  Sometimes monopolies are a good thing.

But, these netwrok effects can also hamper innovation.   If you own a small business, everyone who works for you needs to have a copy of Excel on his/her computer.  Without it, you are compromising your ability to do business.  It is just that simple.

It comes down to a game of chicken.  Even if online spreadsheets were cheaper and offered “good enough” functionality, many companies will still be afraid to get rid of Excel.  Everyone will be afraid to dump it before their partners do likewise.  This will be true until online spreadsheets become the standard.

So, does this mean that we’ll still have copies of Excel hanging around on our computer 40 years from now.  Of course not.   Change happens and there is not a single product on this planet that is immune.

But next year and the year after that and even five years from now, I can’t see how Excel will be replaced by a cloud competitor.  We need two major breakthroughs before that can happen.

1) The online spreadsheet options need to improve to reach the level of Excel.  They don’t necessarily have to surpass Excel in terms of functionality, but they need to do a whole lot more than just simple math functions.  Excel has an awful big leg up on all current competitors

2) Online spreadsheets need to become a de facto part of life.  This will come as a result of #1 above.  If I choose to use an online spreadsheet because it is cheaper/easier/more convenient than Excel, I will eventually want to be able share that data as needed.  And I’m certainly not going to want to copy my spreadsheet into Excel every time I want to send it out.  As more an dmore people start falling into this camp, the netwrok effect will begin to crumble.

As i mentioned above, Excel is a great product.  And it is going to continue to be a great, market leading product for the foreseeable future.  I’m very interested in seeing what the online competitors can do to offer a serious challenge to Excel.  Then maybe, just maybe, me and the rest of the world will consider dumping Excel in favor of the cloud.

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Will Microsoft Office evaporate into the Cloud?

 While much of the focus on cloud computing comes from the Enterprise level (S3, EC2, BigTable, etc.), it is also fun to see the effect that Cloud Computing will have the consumer level.

The one program that nearly every consumer has running on his/her desktop is Microsoft Office.   Can this suite of software products easily be replaced by online services?  Does every PC really need to have Microsoft Office installed?

To answer that, let’s look at the programs that typically come included in the Office Suite.

    – Access           – Excel

    – Outlook         – Project

    – PowerPoint     – Word

    – Visio

 

A few others such as Groove, OneNote and Publisher exist – but I don’t consider these to be part of the core.  Let’s break these down one-by-one to see what their future holds.

 

Access – Microsoft Access is a great database that allows home users and small businesses to store and manage data.  That being said, it does have significant issues with performance and scalability.  Amazon and Google already offer solutions that provide a “database in the cloud” with their SimpleDB and BigTable.  However, I don’t consider these to be replacements for Access.

One of the nice things about Access is the ease of use.  Users can modify data schemas, create forms, etc. all with a few clicks of the mouse.  There is very little programming necessary.

But all of these features can be replicated by an online service.  Even better, an online service will not run into the performance and scalability issues native to Access. 

I don’t know if there is an exact replica of Access available on the market right now, but it will soon come.  One of the products that I have used which is very similar is called Quickbase.   It’s a cross between an online database and a Product Management tool – but I absolutely love the flexibility it gives me.  We can easily share data, forms, reports with others on your team.  It also has an extensive API which advanced users can program against. 

I’m sure there are other similar products out there that I just don’t know about.  If you use one, I would love to hear about it.

Conclusion:  Access can absolutely be replaced by an online competitor

 

Outlook – If you are reading this blog, there is no doubt you have a web-based email account.  Whether it resides with Yahoo, Gmail or Hotmail – online email accounts are commonplace for consumers.  And, they provide 95% of the functionality of Outlook.  Sometimes more. 

I’m surprised more business don’t outsource their email these days.  It has become a commodity.  The average company has no need to set up and manage their own Exchange server.   The only time when it becomes necessary is due to security issues.  A financial institution or government organization needs to own their email for security sake.  But, other than that, Outlook has a bleak – well – outlook.

Conclusion:  Outlook has already been replaced by web-based solutions in the consumer market.  It is just a matter of time before the same happens in most enterprise environments

 

 

Project – Microsoft Project is one of my least favorite software programs of all time.  I find the UI horrible, every PM uses it differently and most people don’t know how to update it properly.    If you think about, the collaborative nature of Project Management software just screams out for the SaaS model.  Multiple people need to access it, everyone needs different views, reports, etc. 

Fortunately, there are a load of SaaS competitors on the market today.   Doing a qucik search shows dozens and dozens of options.  Basecamp – from 37Signals – has a strong following.  As mentioned above, I prefer Quickbase.  I’m sure there are plenty of others that are just as good.  Thankfully, the consumer finally has many options.

Conclusion: MS Project is a lame duck and has a very dim future. 

 

 

PowerPoint – Much like MS Project above, the whole idea of PowerPoint is to share information with others. What better way to accomplish this than with the SaaS model.  It makes perfect sense and seems like a no-brainer.

However, unlike MS Project, PowerPoint is actually pretty easy to use and many people know how to use it right.  I’m quite happy with the product and can put together a very professional looking presentation in minutes.  Therefore, getting people to switch will be a bit more difficult.

Mashable has a compiled a list of online presentation and slideshow tools for you to evaluate.   I’m not sure if any of these provide a significantly better experience than PowerPoint.  Nor, do I know if they are easier to use.

Conclusion: PowerPoint will move to SaaS in the long-term.  But, until a competitor comes and blows it out of the water, people will be reluctant to switch.

 

 

Visio – Another MS Office product that I am quite fond of is Visio.  It’s a rather pwoerful tool if you know how to use it right.  It also has some features that will be difficult – but not impossible – to replicate in a browser. 

I have yet to see an online product that comes close to replicating the functionality of Visio.  If you know of one, please send me details. 

Conclusion: Visio is safe for the near future.  In order for an online competitor to usurp Visio, it will require some incredible technical advances.

 

OK.  So I have tackled the question about some of the lesser-used MS Office products.  But, what about the two big boys?   What  does the future hold for MS Word and Excel?

It is such a great question and interesting topic that they each deserve their own blog post.  More to come in the near future….

Bad Day for the Cloud – Google Docs goes Down

Google Docs was down for approximately 45 minutes today.

This doesn’t just hurt Google’s reputation, but puts a ding in the entire Cloud industry.  It gives all of the naysayers out there ammunition when citing reasons why cloud computing won’t work in their environment.

Although Google Docs has been very stable during it’s life, down time is simply not acceptable.  We’re not talking about 99.99% uptime.   The uptime needs to approach Six Sigma levels – which would be 3.4 down units per million – or just under two minutes per year.

I know that sounds unreasonable to some – but the industry will never hit the mainstream until it can reach these type of numbers.

Google, Amazon, Microsoft and the rest of the cloud providers need to hire some Blackbelts from GE and Motorrola.   They have to set seemingly unreachable goals if they want to transform the entire IT industry.  Anything less is simply not enough.

Book Review: Once You’re Lucky, Twice You’re Good

Whether you agree with the moniker or not, the term “Web 2.0″ has really taken off.   Many people make mocking air quotes when the say “Web 2.0″ – yet they continue to repeat it constantly.  However, despite the term’s popularity, it is nearly impossible to define.  As such, that is part of the allure.

Sarah Lacy has taken advantage of the Web 2.0 craze by releasing the book Once You’re Lucky, Twice You’re Good.  The book chronicles a selection of the personalities and businesses that have come to define the Web 2.0 scene in Silicon Valley.  This includes Mark Zuckerburg (Facebook), Kevin Rose  (Digg, Revision3) and Max Levchin (PayPal, Slide) among others. 

Lacy is a talented writer and the book is a quick, good read if you follow the Silicon Valley scene.  But, it is interesting to note that the book really only chronicles consumer oriented companies.  It doesn’t discuss the web sites, the technologies and the people that bring it all together.  For example, cloud computing isn’t even mentioned in the book.

There are a couple of reasons for this.  For one, Lacy’s speciality is on the social networking side of the web. She is not a technologist and doesn’t pretend to be.   Secondly, it is much more “sexy” to talk about consumer applications.  Michael Arrington also recently admitted as much.

The last point concerns me a bit because I feel like Enterprise Apps and technologies are under-reported on the web.  The only thing people want to write or read about is Facebook, Twitter, FriendFeed, etc.   And, the more that is written about a subject, the more entreprenuers and VCs are drawn to it. 

I believe that there is a huge opportunity for startups to take advantage of the “cloud middleware”.  Operating somewhere between the big cloud providers and the companies that use these services.  Obviously, I don’t know what this killer app will be or I would start the company myself.  But, I feel that the industry could see some really big advances with smart entreprenuers entering the scene.

We need to make the cloud more “sexy”.  The big sites and the bloggers need to keep talking it up.  And, of course, the money and the entrprenuers have to flock to this area.  In the meantime, the cloud computing devotees will just have to take comfort knowing that the work they do supports the latest “sexy” web site

Cloud Computing and Academia

I recently ran across this video with Christophe Bisciglia from Google at the Structure08 conference.

Christophe’s main goal – in a nutshell – is to introduce academia to the concept of Cloud Computing.  In the process, they (along with NSF and IBM) are also opening up a whole set of computing resources to the academic community.

This is great from an altruistic perspective, obviously.  With the additional resources, more advanced/complex problems can be solved.

But, I like this for another reason.  By introducing students to the power of the “cloud” at a young age, they will come to expect this later in life.   When they graduate and become the IT leaders of the future, the cloud will be an option that they take for granted.  It will not require a radical mentality change.

Congrats to Google, NSF and IBM.  By giving away the “cloud” to students now, they are helping to legitimize the industry for years to come.  Video below…

GigaOm loves the Cloud

The website/blog GigaOm has spent an awful lot of time writing about cloud computing lately.  I don’t want to make a habit of linking to other blog posts, because one thing that I hate about the “blogosphere” is that it often feels like a big circle jerk – where one blog just links to the next and it provides no real value. 

But, I’ll make an exception with GigaOm.  My personal opinion is that they have some of the best content available on the net.  They just don’t talk about the latest startup or VC funding round that you’ll never hear from again.  Nor do they spend most of their energy writing outlandish posts in a thinly veiled linkbait effort.  Instead, they generally write thought provoking articles that make you think.

Their latest post – 10 Reasons Enterprises Aren’t Ready to Trust the Cloud – is a perfect example. 

Some of their cited reasons are obvious enough (security, reliability, & portability).  But other points aren’t caught be traditional journalists.  These type of insights come from actually talking to people who work or have worked in large IT departments.  These include:

• Logging issues.  A big deal in the world of Sarbanes-Oxley
• Platform issues.  This isn’t an issue for a startup that is written 100% on LAMP architecture.  But most enterprises have a variety of platforms and legacy issues that they must support.
• Bureaucracy.  Its been said many times before – old habits die hard.  And trying to get a large IT department to embrace cutting edge technology can always be a risk.
• International Laws.  I have a gut feeling that this may be a bigger deal in the future.  Although the word “cloud” is a nice euphenism, these servers still have to actually live somewhere.  And, as we are seeing more and more, international laws still apply in the Internet age

These are all valid points.  And, I do agree with the fact that small businesses and startups will adopt cloud computing at a faster rate than large companies.  But, it doesn’t have to be that way.  There is a work-around for many of these concerns.  You just have to be creative. 

I have a lot of experience with “traditional” IT departments.  I know that it is easy to keep doing things the same way that you have always done them.  Why take a “risk” on cloud computing to save the company money?  You can always find more money to buy a new SAN or create a great PowerPoint presentation that explains why you need to upgrade your database server. 

If this sounds like your company, don’t be afraid to go against the grain.  The benefits of cloud computing can far outweight the costs.  Instead of keeping the status quo and earning your 10% bonus, you can really mak a difference in your company.  Take the risk.  It is worth it.

 

 

Good Bye Bill Gates – Hello Microsoft 2.0

Let me the 1,000,000th person on the web this week to write about Bill Gates “retirement” from Microsoft.   But, rather than look back at all of the great (and questionable) things that Bill has brought to the software industry over the years, I’m more interested in looking forward at Microsoft.  In paticular, how Microsoft will adapt to the rise of cloud computing and SaaS.

Rather than just give you my somewhat limited views on the subject, I am going to borrow heavily from Mary Jo Foley - an esteemed Microsoft-watcher for the past 25 years.  Ms Foley recently released a book titled “Microsot 2.0 – How Microsoft Plans to Stay Relevant in the Post-Gates Era“.   I just finished the book and highly recommend it to anyone who makes their living in the IT/Internet industry.  Whether we like it or not, the decisions that the top brass at Microsoft make will have a profound impact on our jobs.  This book provides great insight into the way that Microsoft operates and a glipse at what might be coming in the near and not-so-near future.

There are a few points made perfectly clear in this book that are worth pointing out:

• Microsoft still makes a ridiculous amount of money via the “traditional” means of distributing software.  Windows and the Office Suite are cash cows in every sense of the word and they will continue to be so for the immediate future.  Microsoft has absolutely no incentive to radically disrupt these product lines by moving to a SaaS model right now.
• Microsoft management is smart.  They know that their current business model may not last forever.  And, therefore, they throw unbelievable amounts of money into R&D.  Just think of all the money they have dumped into the XBox, IPTV, & Tablet PC product lines (just to name a few).  It’s foolish to assume that  Microsoft doesn’t realize that cloud computing is a threat.  It’s also a safe bet to say that Microsoft has a team of researchers and engineers studying and working this problem.
• Microsoft is not afraid of “borrowing” innovation from their partners and rivals.  If a successful software product or service comes to market and demand is high, don’t be shocked if you see Microsoft rolling out something very similar in the near future.

 So, where does that leave Microsoft in the foreseeable future?  I believe that Microsoft will continue to “dip their toe” into Cloud Computing by expanding their Windows Live Services.  You saw this earlier in the year when they announced Windows Live Mesh.  They may very well offer prouctsto compete with the likes of Amazon S3 and Google’s Big Table .  I wouldn’t be surprised one bit to see them get into the Platform-as-a-Service (PaaS) either. 

That being said, I do not expect them to roll out an online competitor to their Office Suite anytime soon.  It just doesn’t make financial sense to do so at this time.  The vast majority of the world is happy to run Word and Excel as programs on their PCs – so their is no sense in tipping over the Cash Cow unless you have to.  It may very well happen eventually, just not in the next couple of years.

The future of Windows is much more difficult to predict.  Although Windows will expand to more mobile devices and such, I just can’t see any radical changes to the standard version of Windows within the next 5 years.  After that, who knows?  It’s very tough to look that far ahead.

But, I know that the people in Redmond are looking that far ahead (and much farther).  So while many people in the blogosphere think it is fun to bash Microsoft and call them a Dinosaur, I wouldn’t count them out.  Microsoft became one of the most successful companies of all time – all built on the “traditional” software business model.  Now that we are reaching an inflection point in this model, Microsoft will find a way to adapt.  They have to.  Although Bill Gates is retiring, the company he built will not be following his lead any time soon.

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Cloud Computing Conferences

The first Structure08 Conference was held in San Francisco yesterday.   The conference – which was put on by GigaOm – had a tagline of “Put Cloud Computing to Work”.

What’s interesting is that this is not the only on Cloud Computing around.  Just a quick Google search shows some other conferences (either upcoming or recently held) that devote a significant amount of attention to SaaS and Cloud Computing:

• Interop Las Vegas
• SYS-CON’s Cloud Computing Summit
• Enterprise 2.0

The fact that there are so many conferences does not mean that Cloud Computing has gone “mainstream”.  Because that it certainly not the case. At least not yet.

But it does tell me that there is a demand to learn more about Cloud Computing.  CIOs and technology leaders are obviously intrigued by the pronounced virtues of cloud computing and want to hear more about it.  They realize that it is not just a fad and can make real business sense.

This is an important time for the cloud “operators” – the Amazons, Googles and Salesforce.com of the world.  They have the ear of  tech leaders in a variety of industries.  That’s a very critical first step.  But, it does not guarantee success by itself.

The next step in the process is just as – if not more – important.  They must prove that the virtues of cloud computing – cost savings, ease of scalability, etc. – actually ring true for companies of all shapes and sizes.  They must put to bed the common perception that these types of services are only useful to Web 2.0 startups.  They must achieve 99.999% uptime.  They must make true on all of their promises.  Until these things happen, the cloud concept may just remain a niche.

I fully believe that cloud computing is much, much more than just another passing fad and is certainly not a nice.  I believe it will be a paradigm shift that will change the shape of the IT industry for years to come.  But, pay close attention to the adoption rates in the next 6-12 months.  The the word is out, the iron is out and if major companies don’t start placing big bets on the “cloud” soon, you have to question if they ever will.