Wide of the mark ...

There has been some excellent analysis about the recent announcement by Canonical of Karmic Koala. I'd like to take some time to respond to some of the questions raised in Matt Asay's post and by the comments left.

Can someone point me to a dumbed down explanation of the cloud?
Certain activities at various layers of the computing stack (application, platform and infrastructure) have become so ubiquitous and well defined that they are suitable for service provision through volume operations.

This transition from a product to a service based economy is behind the growth of the various "as a Service" industries. This is a disruptive shift which offers numerous benefit from economies of scale (through volume operations), focus on core activities (outsourcing), acceleration in innovation (componentisation) and pay per use (utility charging).

It also creates various risks (management, security and trust) related to the transitional nature of this shift, along with all the normal concerns around the outsourcing of a common activity (second sourcing options, competitive pricing pressures & lock-in).

Twenty years ago, this change was first described as utility computing. Today, the concepts of utility computing, this disruptive transition of the computing stack from a product to a service based economy, the growth of a new breed of volume operation specialists (the as a Service industry) and the underlying technologies supporting this change have been grouped together under the heading of cloud computing.

Open source strategy must be subordinated to a successful proprietary software strategy.
As ubiquitous and well defined activities in IT head towards service provision, i.e. "the cloud", the potential outcomes include regulated large scale monopolies or the formation of competitive marketplaces.

The advantages of creating a functioning marketplace are numerous. For consumers there exists freedom, choice and competitive pricing. For providers there exists reduction in adoption barriers and competitive advantage through operations. The formation of markets also creates other service related revenues such as brokerages, exchanges, support, assurance and insurance.

The full list of benefits are many and wide however competition in these markets will require standards and easy switching between providers, just as you have within the electricity industry.

Unfortunately the often cited analogy of electricity contains one major flaw. We are not neutral to our provider as we have a relationship with them (our data, code, meta data etc). For easy switching between providers we need the ability to move our relationships between providers, a choice in destinations and each provider to offer the same output. Whilst the output in the electricity industry is a standard provision of electricity, the cloud computing industry needs to standardise the output of various layers of the computing stack.

Naturally there will be more standard outputs in the application space (i.e. there are more types of applications) than in the infrastructure space. However, the only practical way of achieving this is for those standards to be open source reference models, i.e. complete functioning and running open source code.

I discussed this at length at OSCON in 2007 and at much earlier talks.

Furthermore, for a ubiquitous and well defined activity, open source fundamentally makes more sense as any value relates to service provision rather than the marginal feature differentiation of an common application. The premise that open source must be sub-ordinated to proprietary technology is faulty in this case.

That strategy increasingly points to tethering an open server (and desktop) with closed cloud services. That's not a critique. It's a fact.
The move towards competitive marketplaces based upon open sourced standards should benefit consumers (choice and freedom), providers (removal of adoption barriers) and society overall (acceleration in innovation).

This will require standardisation around open source reference models and easy switching between providers. I trivialised these concepts with my post on the three rules happy of cloud computing.

Rule 1: I want to run the service on my own machine.

Rule 2: I want to easily migrate the service from my machine to a cloud provider and vice versa with a few clicks of a button.

Rule 3: I want to easily migrate the service from one cloud provider to another with a few clicks of a button.

At the infrastructure layer of the stack, Canonical's approach to cloud computing can be clearly seen as helping support the development of standards, to promote open source in the cloud computing space, to build an ecosystem and to make users Rule 1 happy. This however is not the end but the beginning of a journey.

Mark made the comment that it would be apt to make it easier to navigate the jungle. Navigation is inherently all about movement and freedom of choice.

I firmly and absolutely believe in choice for users and the creation of competitive markets and ecosystems. Users and providers should not be limited to a proprietary framework or any single source.

Whilst Matt is obviously not taking pot shots at Karmic Koala and his blog is an excellent read, his reasoning here is somewhat wide of the mark. Of all the trees in the forest, the Koala loves Eucalyptus.

Happiness ... is a Koala

I've been fairly quiet on work and cloud activities recently because I've been flat out with planning. I don't think I've ever worked so hard in all my life nor enjoyed it so much. It's pure bliss.

Mark Shuttleworth recently announced that Ubuntu 9.10 will be Karmic Koala and as we all know Koalas love Eucalyptus.

As Mark says "A good Koala knows how to see the wood for the trees, even when her head is in the clouds. Ubuntu aims to keep free software at the forefront of cloud computing by embracing the API's of Amazon EC2, and making it easy for anybody to setup their own cloud using entirely open tools."

I couldn't be happier.

National Savers Day ...

At a time when inflation exceeds the national target of 2%, the Bank of England is introducing quantitative easing to solve our economic mess. This is akin to pouring oil onto a road in order to slow down a speeding car. 

Whilst the long term effect of high (and hopefully not hyper) inflation compared to savings returns will eventually resolve the crisis it won't be until a combination of a weakening internal economy, weakening currency and core inflation has helped dig a deeper hole. We should therefore at least spend a moments thought for the ordinary folks whose life savings will become worth a lot less (hopefully not worthless) in the process.

Rather than raising taxes, the savings of common people will be used to bail us out of an economic abyss created by some of our wealthiest citizens combined with some very dogmatic and rather foolish economic policies. Of course, the very approach of quantitative easing will help support stock and house prices (temporarily) which bizarrely enough are things that those people who will be out of work and the most careful of savers don't tend to own a lot of. 

So trebles all around for wealthy gamblers and as for your common ordinary savers ... well, the least we should do is to have a national holiday to say thanks.

Thank you savers for keeping within your means, being careful with money, saving up for a rainy day and then bailing out the rest of us when we've blown all the future cash. Whilst your savings might crumble on the bright side it will maintain house prices you can't afford and stocks you didn't buy. So, thank you.

Lastly, a friend asked me to provide a short definition for quantitative easing.

"Quantitative easing is a fiscal laxative best avoided when your economy is already in the toilet."

Or in other words, when you're in a hole ... stop digging! And no, by digging a deeper hole you won't be able to magically back fill the hole you've already created with the new earth you've just dug. It doesn't work like that.

Update 9th May 2013

Warren Buffet says he feels sorry for savers - ah, what kind words. That must warm the heart of the savers out there as they're looking at the cat food tins and asking "is it edible?"

Update 5th August 2013

I do think the Government should bring in a range of issues for the five year old "granny bonds" (NS&I Inflation Linked Certificates) even with a low maximum capital (i.e. £100K) so that some of the least well off savers don't get utterly mutilated by what is about to start to unfold.

When in a hole ...

Once again we approach the cataclysm that is quantitative easing, otherwise known as printing money (but without the direct investment of a Keynesian type approach).

The whole approach of reducing interest rates led to savers having less money to spend whilst those in serious debt just tried to hang on. The net effect might be to slow the creeping expansion of toxic debt (good for banks), reduce currency value and cause an influx of cheap foreign capital (good for stock market and house owners but bad for inflation) but this is at the cost of shrinking and weakening our overall economy (bad for people).

A large number of souls are out of work for no particularly good reason. With inflation running at 3.1%, we need to be restoring confidence to our savers and our currency. Printing more money through such a scheme will either cause an exodus that'll lead us into a tailspin or more likely drag out the recession for many years.

Despite beliefs that we can dig our way out of this mess by applying the same sort of techniques which got us here in the first place, we just seem to be getting in deeper.

By the way, if the banks have so many toxic assets they would like to get rid of, can't they at the very least pay bonuses in them?

It's all about new technology .... NOT!

I was recently asked to explain the difference between "cloud" computing and the earlier attempts to create an ASP (application service provider) industry. Is it just down to new technology? To understand the difference, we first need to get to grips with some of the fundamentals of change and what cloud computing is.

The fundamental forces behind change

Back in the 1990s, Paul Strassmann demonstrated that there was no link between IT spending and business value. Whilst there has been some argument over the validity of the research, Strassmann’s work created an idea which rapidly spread. This idea was that not all IT is the same, not all IT has value and some IT has commoditised.

However, what is commoditisation?

In its simplest terms, commoditisation (as opposed to commodification) is a neologism which describes how a rare and poorly understood innovation becomes well defined and ubiquitous in the eyes of the consumer. In other words, it’s a transition that describes how a once rare, exciting and new activity (an innovation) becomes commonplace, bland and standardised (more of a commodity).

The most often quoted example of commoditisation is the electricity industry and how this innovation led to the formation of national grids in the 1930s. Today, to most consumers, electricity is something you get from a plug and few companies describe their use of electricity as a source of innovation or a competitive advantage.

Whilst the journey from innovation to commodity has numerous stages (for example bespoke, product and services), this represents a continuous but hazardous transition of an activity to more ubiquity and better definition. There are numerous factors controlling the transition but for brevity I'll simply state that not all activities will commoditise, some have physical, social and other constraints. In figure 1, I've plotted business activities against axis of ubiquity (how common something is) and certainty (how well defined and understood something is).

Ubiquity vs Certainty for TVs, Telephones and VCRs.
(click on image for larger size)

The data is derived from the TV, Radio and Phone industries however it suggests that an S-Curve relationship between the ubiquity and certainty of an activity exists. The graph shows a path for how a rare and poorly understood innovation becomes a common and well defined commodity.

All business activities are somewhere on that curve and all of them are moving, commoditisation never stops and IT activities are no exception. Figure 2 provides a hypothetical example of the activities within a business.

Representation of activities in a business
(click on image for larger size)

This graph is a representation and the highlighted points are not real data. The real path can only be determined after an activity has reached a certain level of commoditisation (in other words, I can't predict the future). You can however use pretty good expert reviews but that's another topic for another day. Since all the activities are connected, you can also expand this graph by looking at the linkages between components and how commoditised they are but that's also another topic for another day. I do however want to note that the journey of an innovation to ubiquity is not an easy one and some of the changes can be disruptive to an existing industry. This is especially true as any activity moves from the product to services stage of its journey.

Such a disruptive change is occurring in IT today. A quick glance at the current list of hot terms brings up subjects such as service oriented architecture, web services and mashing up services. All of these contain a strong service theme. The computing stack, which again for brevity I’ll characterise into three layers of application, platform and infrastructure is slowly shifting away from products towards standard components provided as internet services.

The last thing to note is that you have no choice when it comes to commoditisation. If you treat an activity as an innovation whilst everyone else uses standard services, then the only thing you are likely to create is a competitive disadvantage for yourself. This is why any company needs to continuously adapt to changes in the surrounding market just in order to retain its competitive position (the Red Queen Hypothesis).

In general, commoditisation is a continual process that can be be highly disruptive. You have to continuously adapt to this change and it is happening in IT today.

What is cloud computing?

Certain IT activities have become so common and so well defined that they are now suitable for service provision through volume operations. This is not confined to one particular layer of the computing stack but across all layers. This transition has given rises to the “as a Service” industry which includes :-

• Infrastructure (or Hardware) as a Service providers such as Amazon and FlexiScale.
• Platform (or Framework) as a Service providers like Ning, BungeeLabs and CogHead.
• Application (or Software) as Service providers like Salesforce, Zoho and Google Apps.

Supporting this transition is a range of technologies from clustering to virtualisation. In essence these have provided effective means of balancing the supply of computing resources to match the demand, a necessity for volume operations.

Whilst the concept of providing of computing resources through utility-like service providers dates back to John McCarthy in the 1960s, this idea began to sink into the fog of history shortly after. It resurfaced in the 1990s as it became the fashion to think of IT development as a factory-like process with standard components which could be plugged together to create new applications. With the development of  the internet,  a resurgence of interest in the concepts of utility-like service provision began. Unfortunately, many early attempts  were unsuccessful as they tried to apply such methods to activities that lacked both ubiquity and definition.  Increasingly as areas of IT have become common they have become more suitable for outsourcing to such providers. Managed hosting providers led this second wave of change and the new breed of volume operations specialists such as Amazon are leading this third wave.

In general the concepts of utility computing, this disruptive transition of the computing stack from a product to a service based economy, the growth of a new breed of volume operation specialists (the as a Service industry) and the underlying technologies supporting this change have been grouped together under the heading of cloud computing.

So how about ASP?

Well, ASP is part of the same overall process but as I said earlier many of the attempts focused on activities that were neither ubiquitous nor defined enough for such a volume operations approach. Others were more a a rental model for products. Today, this has changed. Cloud computing has less to do with a technological change and more to do with an environmental change in the wider IT economy.

What's your recipe ...

Start with some basic ingredients, including : a deep recession caused by reckless greed in an overpaid financial community, common people vilified as xenophobic for demanding that they be given the opportunity to apply for local jobs, newspaper articles describing those from poor backgrounds as lost causes, social mobility ground to a halt and the Mayor of our capital city failing to deliver on social housing.

Since ordinary people are under threat of losing their jobs, lets spice up our brew by adding huge amounts of tax to bailout (rather than re-capitalise) big business and allow others to continue to avoid paying their fair share through off-shore havens.

Into this cauldron stir in a huge dose of interest rate cuts hitting savers, the one group of people who were actually spending, in order to prop up the most indebted.

Now for the bitter after-taste. Lets waste billions in tax payers cash on bankers bonuses just so that we can see more capital leave the country. As for the threats on action alas most people believe this to be hollow.

The final touch is a bit of hemlock for our sickly stew. Simply embark on a massive public building program without having first nationalised the building industry. Expect trebles all round from those lucky shareholders.

Our economic wisdom is changing from the somewhat sensible to the absolutely gaga. We're brewing a toxic concoction and whilst the English nature is slow to bring to the boil, we shouldn't forget it takes even longer to get it to cool down.

The weak minded live in the gutter ...

Today, my weekly shop was delivered with a free copy of the Times. This single act falsified the old adage that the "best price is free".

Had they attempted to charge for it, I would have refused. Since it was free, I ended up wasting precious time. This gutter rag is so poisonous, that its use to wrap fish and chips would cause a major health scare.

Whilst I don't agree with ad hominem attacks, the first opinion piece I read deserves no quarter. Magnus Linklater's miserably titled "Don't try to teach pupils who can't learn".

Magnus' argument, I use that word out of generosity not merit, is that it is not worth trying to educate those from the most deprived backgrounds. As someone who was brought up in his early life on a London council estate but managed to get to Cambridge through good state school teachers, I feel tempted to tell this old fart to stick his head in a pig.

However, I'll show restraint (but not much).

Magnus' drivel questions whether those from deprived backgrounds have the ability to absorb academic subjects. His polemic would have us investing in enthusiastic children from suitable backgrounds (i.e. those in the middle to upper classes) whilst the rest of us learn vocational skills.

Magnus would reinforce the social divide by depriving those from deprived backgrounds because of their background and regardless of ability. He theorises that perpetually consigning a whole class of people to vocational work would be in their interests. Stuff and nonsense.

He conflates ability with background and resurrects the old arguments used in eugenics. However, the poor are not somehow defective and ability is not the preserve of the rich.

We have a disgraceful lack of social mobility in this country. This is the problem we need to solve.

I will however agree with Magnus that there is one case where the perpetually weak minded live in the gutter. It's in the press and Magnus' shockingly poor analysis provides plenty of evidence of this.

Social Capital

In the U.K. we have a severe shortage of social workers. We also have lots of highly intelligent, skilled but unemployed bankers. Can't they do something useful for once and retrain? It'll be a good investment for the future, and we might even forgive their investments in the past.