Cloud and Victorian Power Generators

On November 2011 an article appeared in the Guardian Newspaper.  The article was trying to explain public cloud to the “lay man”.

 

Businesses used to generate their own power. Then they went to "cloud power"

The analogy used was that, 100 years ago, companies all generated their own power. It was a messy business, and generators were complex things, prone to failure. Then the technology for transmission of power without loss was massively improved (if you increase the voltage of the electricity you decrease the power loss, which is why power distribution cables carry such high voltage power).

 

Very quickly, companies were buying their power from enterprises that specialized in power generation and distribution. Why? Because generating power detracted from companies’ focus. Power generation sucked up management resource and smart people who should be working on the companies’ main business.

 

power factory.JPG

 

Why be in the "messy business" of providing generic applications

The analogy was then drawn between this and public cloud. Why should a company be involved in the “messy” business of providing a purchasing system, a payroll system, a sales force automation system, a service desk platform, or an email system, if they could get these services from someone who specializes in these things?  After all, if our purchasing performs to a certain standard (240 volts at 50 hertz, in the UK), that good enough and it performs better than this, it’s probably not going to give us differentiation over our competitors.

 

So, the Guardian argued (rightly, in my opinion), that companies should “allow someone else to generate their electricity”.

 

How far does the parallel between public cloud and centralized electricity generation go?

 

Public cloud is the combination of two innovations

In the case of power generation, one innovation (the ability to carry lots of current without high loss) allowed the model to change.

 

In the case of public cloud, I believe there are two innovations at play. The first isactually the creation of a much better generator; the adoption of virtualization as a way of delivering services. And the second is a distribution mechanism; the adoption of the and the acceptance of the concept of getting services over the internet.

 

And public cloud services are these two inventions coming together.

 

(Interestingly, Private Cloud is just one of these innovations in action - the “better generators” of virtualization.)

 

How fast will we all "jump to the public cloud"?

So, will all companies jump to public cloud services as fast companies jumped to centralized power distribution? It’s at this point that our analogy breaks down, I think. The services we get from the cloud are more complex than

electricity generation. We actually put our data into the public cloud, whereas with electricity generation, the service was taken and nothing was given back. I think it’s this aspect of public cloud that means we can’t use the analogy to infer adoption rates for SaaS public cloud.

 

But I believe the main argument of the Guardian article stands - creation and operation of payroll, expenses, purchasing, email, sales force automation, file sharing, travel, social media platforms, HR systems, training systems, and service desk platforms is messy work, the systems are complex and they can suck in our good people, defocussing them from those applications that actually do generate differentiation, and thus, margin, for us.

 

Author : Mike Shaw

Tags: cloud| SaaS
Comments
Kanye20(anon) | ‎03-23-2012 06:34 AM

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About the Author
Mike has been with HP for 30 years. Half of that time was in R&D, mainly as an architect. The other 15 years has been spent in product manag...
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