Sunday, October 25, 2009

Cloud IaaS: Sorry, not very Interesting

“There is an incessant influx of novelty into the world, and yet we tolerate incredible dullness” – Henry David Thoreau

Don’t get me wrong. Infrastructure-as-a-Service is a wonderful, useful and logical development. I do not need to sing the praise of it here. I believe in it and I am sure that it will provide a growing, significant percentage of computing needs around the globe.

But, it is just not very interesting, although it is the rage in all IT circles and hype generators. The technologies that enable it are basically: high speed bandwidth, virtualization and sophisticated management software. Now, I do not belittle these technologies. They are the product of years of development of ingenious engineers and some fast acting companies that had the ability to put one and one together and come up with the offering. And kudos to Amazon Web Services on leadership, ideas and execution.

Still, I believe that it is the domain of the few, and although every datacenter and ISP out there is starting to offer a ‘cloud’ solution, the end result will be a few very large companies that are big enough to invest in a model that makes economic sense and are sophisticated enough to pull it through.
So what does that say for technological companies that are thinking of providing IaaS-enabling software or hardware? There will survive only a handful of those companies, since they will be competing in such a small market.

So why is it such a hype, and why is it burning like a bushfire in the Kalahari savannah, while it took almost a decade for SaaS to become mainstream? Because the idea of IaaS is very simple and straightforward. IT gets it. Any old CIO can understand the concept, because hardware is a commodity and has been for a long time. Because many enterprises have been hosting in co-los for decades, acting as if their hardware is in their datacenter.
Once you get over the fear of losing control and get through the blah-blah of security, the idea of IaaS is very simple, and therefore, not interesting.

SaaS on the other hand is all about Applications. And applications are not perceived as a commodity (although many of the non-core applications are beginning to assume that role – and that’s a good thing). Therefore, once the hype will run its course and the dust Clouds will settle, IaaS will become mainstream. Every enterprise will choose how much of its infrastructure will lay outside of its firewalls and to what extent it will use the flexibility of the solution. SaaS will still be the interesting item, since every ISV will offer an on-demand solution, and the competition will continue to generate innovation and breakthroughs.


Mukesh Sundaram said...


The people enamored by IaaS are in finance. Some of our VCs think that this is the way to reduce infrastructure expenses.


Anonymous said...

Agreed that at the end of the day the back end architecture is the same as it's always been, but don't you think the up and coming service providers like OpSource and GoGrid and complimentary value added services like Rightscale and others are driving innovation and making IaaS "interesting"?

Dani Shomron said...

Of course, Rightscale's management suite and OpSource's virtual Private Cloud are innovative and are answering needs, but the bottom line is that this market will end up with a small number of players.
Rightscale is an example of a product that is totally dependent on a single Cloud provider - AWS.
I believe that many of the hosting services out there today will be wiped out by this new Cloud storm and they will not be able to compete with the depth of pockets needed to support cost effective elastic computing.

Sachin said...

Nice article Dani...

Do you see big corporations using IaaS as a solution to manager large infrastructure investments within the company ? So in addition to it being the solution for different companies...believe it can add great value to the individual corporates while they retain the control

Sachin Kalra

Dani Shomron said...

What you are referring to is the Enterprise Private Cloud.
This will make sense only for very large corporations with a strong central IT that caters for distributed sites. Otherwise the investment would not make sense.
Corporate IT could make use of the technology, such as virtualization without the cloud hype.
Virtual Private Clouds offers such as OpSource and Amazon allows the enterprise to extend their data centers without creating their own cloud.