Back to the Future

Welcome to the cloud. Its going to change your world. Really.

I’ve just gone back to the 60’s, 70’s and early 80’s...and no its not a bad acid flashback!

Recently I had a chance to sit down with a potential customer who wanted to drive down their technology costs by “moving our applications into the cloud, consolidate our server farm onto a smaller number of virtualised servers that we’re going to co-locate in an off-site data centre where we’ve rented rack space”.

I nodded at him when he asked “Have you done any of this sort of thing before”?

I smiled and said “Yep. The first time I did this was about 25 years ago.”

I got a smug response saying “No one was doing this 25 years ago, in fact no one was doing this 10 years ago. This is cutting edge technology.”

This is the point that I know that I’m dealing with someone from the shallow end of the gene pool who’s “drunk the kool-aid”.

Let’s get one thing straight here and now - this is 60’s technology that’s been dressed up to appeal to the new techno-hip who think everything with any technological cachet has a lower case “i” in front of its name.

Just like a filler on Rocky and Bullwinkle lets saddle up with Sherman, Mr. Peabody and the WABAC machine and travel back to the swingin’ 60’s to have a look at this wonderfully new invention called the “cloud”.

Here we are in Armonk, New York around 1964 when some charcoal suited IBM guy signs off on CP-40. By 1972 this evolves into IBM’s VM and its with us to this very day as ripping along on IBM mainframes delivering virtual machines up the wazoo to all and sundry and its been doing it for the past 39 years.

Suddenly its cost effective for companies to buy a mainframe and lease VM’s to customers on a machine that’s hosted in their data centre (usually housed in some nondescript building in an industrial park) and the terminals in the customer office all connect back to a box called a “cluster controller” that connects back to the mainframe via a line leased from your telco.

In current techno speak we’ve got blade servers in a high availability virtualised configuration co-located in a data centre with high speed tails into the telco cloud connected to a router which connects to the machines downstream from it in the enterprise.

In essence these two solutions split by nearly 40 years of technological advancements are the same.

Now let me prognosticate about what will happen in a few years.

As the business matures and costs drop, margins shrink and the guys in the business of delivering “cloud-based, virtual machine environments in co-lo data centres” will begin to let their service levels drop to protect their margin and EBIT.

Then some genius in a university somewhere will come up with some ground breaking idea on how to better share computing resources “in-house” and suddenly the “cloud” will become disappearing wisps of water vapour.

Everything will come back into the local premises and some marketing genius will come up with a new term for it (in the late 80’s it was a LAN) and a whole new generation of attention span challenged techno-literati will again “drink the kool-aid” and the roller coaster will go off onto its next trip around until someone comes up with a new version of the cloud...

This isn’t new or ground breaking as marketers and the press would like you to believe. Its a slow evolution of established centralised computing technology that’s driven by valid economic reasons that will lead to another evolutionary change in distributed computing that will change the way corporate computing is run taking it back to being locally hosted and run.

The more things change, the more they stay the same...

It’s true what they say about history and being doomed to repeat it...

The Apple Double Play.

I just finished reading an article in PC Magazine that really got me thinking.

The piece was entitled ‘The Apple Product That Really Worries PC Vendors’.

It really got me thinking, especially in light of the fact that the Commonwealth Bank recently decided to arm their staff with MacBook Air laptops.

The interesting this about this was the following:

Branch visitors were free to use iMac, iPad, iPod and Asus touchscreen devices to browse foreign exchange rates, products, and to make appointments with CBA specialists – much like how Apple customers arranged to visit the vendor’s ‘Genius bar’.
The bank also planned to replace internal Dell desktops with MacBook Air notebooks nationwide, allowing employees to choose to operate on either Mac OS or Windows platforms.

Wow! I really mean WOW!

Think about this in terms of the the information from Canalys that I mentioned in this post ‘Wintel Market Share Slips’.

The Commonwealth Bank, the guys who hung on to OS/2 for years past its expiry date are doing a widespread deployment of Apple MacBook Air laptops. This is astounding news.

Here’s the really amazing potential - lets assume that they replace all 4000 Dell laptops with the MacBook Air. Here’s the really interesting maths:

4000 copies of Windows 7 Entreprise, even at the best possible price couldn’t be less that $175 a copy, lets call it $150 just to keep the calculations simple. Lion is $31.99.

That means a saving on OS upgrade costs of $472,040.

Half a Million Dollars saving on an Operating System upgrade!

Where would you want the half million, on your bottom line or on Microsoft’s?

Careful of your answer, your shareholders are watching.

IBM. Three little letters, one big company. They'll make you an offer you can't refuse.

eWeek published a story recently - Why IBM is the Most Innovative Company in IT

There’s a lot to admire about IBM, but, they do show they they can always learn from the experts.

In the article there’s a reference to how IBM successfully borrowed business strategy from The Godfather.

In this now-famous story told by prominent tech attorney Gary Reback (and broken in Forbes no less!), Reback talks of how when he was a lawyer for Sun Microsystems in the 1980s IBM came in and claimed Sun infringed seven of its patents. Sun stood up to the IBM team and provided evidence the company did not infringe all seven patents, but perhaps only one.

Then, according to Reback:

An awkward silence ensued. The blue suits did not even confer among themselves. They just sat there, stone-like. Finally, the chief suit responded. "OK," he said, "maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"

After a modest bit of negotiation, Sun cut IBM a check, and the blue suits went to the next company on their hit list.

Talk about making an offer you can’t refuse, and a very innovative application of new perspectives on business negotiation tactics.

This could be a new subject for MBA programmes. Advanced Business Negotiation by Tony Soprano

Innovation. Gotta love it.