Simon Wardley delivers the opening keynote at HostingCon 2011
(WEB HOST INDUSTRY REVIEW) — The opening keynote at HostingCon 2011 was delivered by Simon Wardley, a researcher at CSC’s Leading Edge Forum, who sought to provide a real understanding of how cloud computing could impact the hosted services market, in a presentation called “Situation Normal, Everything Must Change.”
Early in the presentation, he offered a chart (of products or technologies) plotting ubiquity against certainty, which showed a real correlation that, as a technology moves from innovation to products with features, they become suitable for delivery as utility services, which kind of describes the cloud – the moving of a bunch of things (infrastructure, platform and software) into a utility model of delivery.
He says there are a couple of well-known barriers in the conceptual evolution of something from innovation to utility, including a barrier between the innovation and the product stages, and another between the product and utility stages.
As a process becomes standardized and ubiquitous, he says, it becomes less a competitive advantage, and more just a cost of doing business, and at the same time more suitable for delivery as a utility service.
And, as more technologies become developed and stable, they become a framework for increased rates of innovation.
He describes a theory called Jevon’s Paradox, which says technology innovations that reduce the rate of consumption of a given resource, increase the rate of their consumption (the example: more efficient steam engines resulted in more coal consumption), so more efficient computing resources will result in more computing being done. So the idea that cloud will reduce IT budgets isn’t exactly right. It’s probably going to introduce all kinds of new IT processes over time.
He also describes an “innovation paradox,” in which our need to compete today (use commoditized utility services) is at odds with our need to compete tomorrow (adopt innovative replacements for those technologies). It means that there’s no one-size-fits-all strategy for innovating or dealing with innovation.
The way businesses deal with this problem is by using the commoditized services, and attempting to spot those innovations that will become ubiquitous, and to create or adopt commoditized versions of those products. This strategy is apparent, says Wardley in organizations like Salesforce and Amazon, in the cloud space.
He says the shift of a technology across a boundary (from product to utility, for example) it is almost always disruptive, because the incumbent providers almost always have a real inertia related to making that shift, based on their past success. Past success, he says, is often an inhibitor to future survival.
The way to combat the now-incumbent provider in the new market (Amazon in the cloud) is to create a new, bigger, ecosystem, encouraging other companies to set up in that ecosystem – which is what Rackspace is doing with OpenStack, and VMware is doing with CloudFoundry.
Ultimately, he says that you can’t compete against companies like Amazon and Salesforce with feature differentiation. He says you fight an ecosystem by building a bigger ecosystem, which is why efforts like OpenStack are so interesting. In a time of war, he says, alliances are critical.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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