Thursday, March 06, 2008

Timeo Danaos et dona ferentes

Last year at OSCON, I talked about the need for competitive utility computing markets. Without these markets, many of the benefits of SaaS ("software as a service") would be limited and adoption would be hampered because of fears over the risks.

To create such a market, you need "true portability" which I would define as comprising:-

  1. A number of providers of the same service.
  2. Portability of all data (including any meta-data) from one provider to another.
  3. Interpretation of all data (including any meta data) to be identical in the new provider.
  4. The switching from one provider to another to be a useable process.

To achieve all of this without those service providers surrendering strategic control of their business to a software vendor, you would need all the core technology to be open sourced.

This utility SaaS world would benefit business consumers and those whose expertise is in large scale service provision. However, it is an unpalatable world for any former provider of commonly used proprietary technology.

Palatable or not, commoditisation is fairly inevitable. For any ubiquitous technology to survive this change, the software vendor would have to do what should be impossible. The vendor would have to:-

  1. Persuade a number of companies to use the vendor's proprietary technology to create a competitive utility computing market.
  2. Persuade a huge number of customers to give up on internal systems and to lock themselves into this market and hence the vendor's technology.

The only way this could happen is if the vendor:-

  1. is a financial powerhouse with a long history of stability.
  2. has existing relationships with potential providers and customers based upon proprietary technology.
  3. is capable of creating its own initial large scale SaaS services during the early stages.
  4. can license a version to its customers to host in their own data centres whilst a market establishes.
  5. has strong relationships with a large number of ISPs and ISVs to become potential providers for this "market".
  6. has strong relationships with a large number of customers in order to generate the interest to attract the providers.
  7. has a powerful marketing machine which can provide compelling sales stories such as:-
    • cost efficiency through the use of the technology.
    • opportunity to create revenue by selling capacity to the "market".
    • opportunity to purchase capacity from the "market".
    • opportunity to reduce capex and operating costs by use of the "market".
  8. proven range of tools provided such as CRM. [buying a company such as salesforce.com would probably help]
  9. seamless integration with existing development tools and desktop environment.
  10. collaborative opportunities between companies in the "market". [How about social network based searching and advertising or free market reports based upon company data]
  11. enterprise environment with ISO standards.
  12. positive support for portability issues and a good neighbour-like image. [being pro web standards and pro data portability would help]

In its final and most abstracted form, this "market" would simply be consumers and producers exchanging utility computing resources through a "cloud" or a "mesh" based upon proprietary technology. Whilst seemingly based upon "open standards" and freedom, network effects can easily be used to create lock-in. If you were a complete pirate, you could even use it to undermine the current form of the Internet.

If such an approach was possible, then the proprietary vendor would smile as they escape from the ravages of commoditisation whilst service providers and business consumers would find themselves dependent upon the vendor.

It would be a nightmare scenario, an interoperability disaster which will harm consumers, governments, the community, the public and even businesses.

Be wary of Geeks bearing gifts.

Talking of gifts, I'm glad to note that Microsoft are adopting web standards, that's nice of them. They also appear to be much more open source friendly these days, helping out with popular development environments.

Mr. Edward's seems less than convinced by these "good" intentions and is rather concerned about something called "fixed/flow".

I've always thought that, in business, it's a good idea to fix things when possible ....

.... or at least try.

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