Friday, July 4, 2008

BYOS - Build Your Own Startup - on the Cloud! - Issue 1

The geek world is aglow, but business world is cool

Ask any geek what is new in the world today, and he may drown you with excitement about cloud computing. But ask a technical manager about it, and he will cool you with his talk about the total cost of ownership. Ask a business man, and you may get a "huh?" We are forced to admit that there is a disconnect between the geeks and the business world. Why is this - that is what we have set out to investigate.

Conversation between friends

I recently overheard a conversation between two friends, Bernard, a business and startup veteran, and Pleemo, an enthusiastic geek. I joined them and what transpired was of such common interest that I decided (with their permission) to share it. Here it is then, and I wonder what you would say in such a situation.

Bernard: Please, Pleemo, I beg you, do not talk to me anymore about the cloud!
Pleemo: But why? It's all people are talking about. Google has initially opened their App Engine to 10 thousand developers, then to 75 thousand - and I got it then! - and now to everybody. Obviously, cloud computing is going to change the world!
Bernard: Okay, I see our friend Mark has joined us and is listening. Let us discuss it and see if we can agree on anything. Tell me again, what is this cloud computing that everybody is talking about?
Pleemo: Okay, Bernard, I accep
t the challenge. Cloud computing means that practically anybody can get any amount of computing resources fast and cheap, or even free. For example, Amazon Elastic Compute Cloud allows me to start any number of servers in a minute, then pay only 10 cents per hour while the machines are running. When I am done, I shut them down and stop paying. With Google App Engine, you run your application for free, until you reach 5 million page views a month, and then you are already on the way!
Bernard: You must be having a lot of fun with it, Pleemo.
Pleemo: Yes, and I can run my projects with a credit card, the same that I use to buy books on Amazon. And I know that if I need it at work, then I can use other offerings: SUN, IBM, Microsoft, you name it, all either have a cloud offering or are getting into it.
Bernard: So has your boss asked you to write something for the cloud?
Pleemo: Well, actually, not yet.
Bernard: Why not?
Pleemo: It would be a long list, an
d you could guess it yourself. He says, this is technology that is not proven, that he does not want to be locked into a particular platform, that there are few programmers proficient in the cloud, and so on.
Bernard: And you?
Pleemo: I have answers to all his questions, but I have to admit that the rate of cloud acceptance by the enterprise is slow. I need to think more about that.
Bernard: I think you are beginning to see my point of view. Then tell me something else. Is it true that 70% of all started software projects fail, that is, do not come to completion and are not used?
Pleemo: Maybe 50%, but you are right, projects sometimes fail.
Bernard: So I can start a business where an important part of would be a delivered by computers, maybe even in the cloud. But where is the guarantee that the system will work the way I need?
Pleemo: And let me ask you, in turn, is it true that 9 of every 10 startups fail?
Bernard: Well, businesses fail. For example, 50% of all restaurants close within a year.
Pleemo: Then you must accept the possibility of failure for software projects also.
Bernard: I do. All I am saying is that the cloud is no different from how we used computers before. Well, maybe not much diffe
rent. But I was reading an article about Cloud TCO, and the cost advantage isn't clear even to geeks. And if you tell me that new tools allow rapid prototyping, I will answer that you need to learn these tools, and even then my system may not cut it.
Pleemo: Bernard, I see that I can not convince you.
Bernard: No, not to the point of starting a new business with you, just because it is in the cloud.
Pleemo: Alright then, let me do my homework. I will visit you in your home - if you invite me for dinner - (Bernard: you got it!), - and I will try to think in your terms. I will try to prove to you that the whole world is changing because of the cloud. After all, hundreds of thousands of developers on Amazon, tens of thousand on Google and all others do point to something!
Bernard: I am interested myself in what you will invent. I want to agree with you, but I just do not see the return on investment, ROI, you know?
Pleemo: Challenge accepted, see you soon.

Summary

For the first time I saw both sides. Excited Pleemo is burning to do something with the cloud, but Bernard fails to get excited. Bernard has a feeling that something great is cooking and the opportunity may be waiting, but before he is convinced, he is not going to put up his money and effort, which he has already seen going up in smoke. And Pleemo tends to brush aside the objections, as geeks do, but this time he saw that he did not have all the answers. He knows that the rate of acceptance of the cloud is not on par with his excitement. He reads the news and the blogs about the cloud, and they are from his fellow excited geeks.

I was also perplexed. There is no denying that I am on the geek side, but I too did not have good arguments for Bernard. Once I started thinking as he did, I did not want failures just to make some geek happy and have fun.

I decided to prepare my own arguments and to join Pleemo and Bernard at Bernard's house. I hope to get new insights, and plan to report my findings - in two weeks. For now, keep cool.

If you have your own answers to these questions, leave your comments or join the discussion. To sign up for the newsletter, click here.

Thank you.

7 comments:

Sruli said...

Mark, I am very excited about the potential here!!!

Mark Kerzner said...

Thank you, Sruli, I already have an idea for the second issue.

boristech said...

Trying to keep it cool, but don't know if it's possible :)

marcel said...

I feel that the technical skills required, and challenges presented by cloud computing are basically the same as with co-location or dedicated hosting. 95% of the work is dealing with stuff in linux - configuring services, ensuring outing email isn't marked as spam, security, monitoring, logrotation, backups, mirroring, failover, load balancing, scaling, etc.

The remaining 5% is stuff specific to the hosting environment. With Amazon's EC2, this means learning their API, learning how to live without specialized hardware, and dealing with "dynamic" IP addresses.

So to me the "business" reluctance is really a fear of deployment in general, rather than specifically with "the cloud". But this fear is understandable, because "secure, reliable, fast" production deployment requires a lot of knowledge.

Mark Kerzner said...

Marcel,

Thank you for your comment. I agree with it comment completely. My answer is that there will be a host of small startups specializing in the cloud, once the cloud matures. They will have the know-how and the rapid prototyping development skills. But the problem that I am trying to address is connecting the business world with the geeks.

Dan said...

So there is this really special fast new automobile, and someone is willing to lease it to you for a while for a most reasonable price. But then the guy standing nearby asks, "Where do you want to go?" And you respond,"Nowhere special, it's just the thrill of the driving experience." And the guy next to you says, "Then you'll buy your own gas."

Mark Kerzner said...

dan, I think you are making a very good point. What we are looking for is the sort of idea "now that I can drive so nice and fast, it just occurred to me that I can take a special person out tonight".

In more prosaic terms, can the creativity be spurred by the availability? While I am collecting ideas for the next issue of the newsletter, let my own practical example.

I am going to create a web site for a new restaurant. Normally, it would be three pages, Hello, Menu, and Map. The owner, however, is thinking of a picture gallery for the parties. Sort of social network around the restaurant. I want to do it on Google App Engine - just because it is there! Since I do not have to worry about the storage size or load, I will try to plan for an unlimited picture gallery. The idea may be unproven, but since it is not hard to do, I am tempted to try.