We’ve just had a glimpse of the future of PaaS

A fascinating week in terms of the evolution of PaaS, cloud computing and SaaS has been upon us. I wonder if people noticed? The two big items that I saw were the collapse of Coghead and the hypothesis by Phil Wainewright as to why Gmail in Europe went down.

While most commentators are highlighting (and rightfully so) the impact and risk PaaS could provide on customers, I saw something very different.

Let me role this out as I saw it

Firstly it is increasingly obvious that PaaS and cloud computing is a very long way from being mature. I say this because of a number of factors. Just look at the market, everyone is racing to achieve scale. If that didn’t tell you it was a new market nothing will. There is also a general lack of standards (no two platforms are the same), evolving business models, a lack of channel maturity (who is wholesaling to get scale?) etc.   It seems to me that PaaS providers need to truly understand what the ‘P’ bit means. Get clear on the role of a Platform. Historical evidence would point to the fact that you can’t have a plethora of ‘platforms’ in the same space. There is only 1 ‘internet’ (the network guys will hate that), HTTP and its evolutions is a platform of, smpt another. This is true in other industries too, Telco (Bell, BT, Telstra), Rail (take your pick), Banking (two big credit card schemes globally) etc. In this regard I 100% agree with Jeff Kaplan, we are going to see a lot more consolidation. Economically this just has to happen for any of the PaaS providers to make any serious money, somebody has to get to true scale (60% market share).

Counter to this scale based play is regionalisation of data.  Geo-fencing isn’t new, ask content distributors, but how this works in a converged world is. This same phenomenon has been highlighted by the global economy. Up until now, I don’t think people truly realised how intertwined and boundrieless economies were, that’s changing fast. Similarly PaaS attacks this notion of nationhood. Google has no data centre in my home country, how then do they enforce our sovereign rules on SPAM, privacy and data protection? They simply can’t. People have commented on this effect before.

So then what is the future that I saw? I still believe you will see the emergence of one dominant PaaS player, but there will be one in every region or country. I think this will happen for a couple of reasons. Focus, big companies tend to focus on big markets first (elephant hunting or bang for buck). This gives the rest of the world breathing space to home develop a similar offering. Trademe is a great example of this. The second reason is regional legislation differences. While technology standards may eventually emerge, legal standards take even longer. 

If you believe this, then you will see one large player and one mid-to-small player emerge in every geography and be quite successful. For some services (maybe low end consumer stuff) you will see  some internationalisation impact (that horse may have bolted), but not so on the wealth creating business segment. I also think you will see a bunch of small niche players emerge who have specific domain expertise. I also think that all this is likely to occur in the next 2 – 3 years. 

Any other  views?

What’s your Elephant?

It seems to me that every industry has an elephant that it needs to addressed. Not only are elephants an obvious fact that goes ignored, often they become are limiting paradigms.

Take Telco’s for example , how often have you heard the statement that ‘voice is in decline’ used in a semi defeatest way to explain EBITDA declines. Utter garbage, complete rot trotted out by businesses with no imagination. ‘Voice’ the service is doing nothing but grow!!! For gods sake just look at the Statistics. Increasing telephone lines, increasing mobile phone subscribes increasing international tolls, increasing voip minutes.

Telco! Here’s your elephant. The next part is the limiting paradigm. The companies that accept this false statement as fact are victims. By accepting this as fact they don’t have to address the obvious. That this situation is their doing and that they have the power to fix it.

How? Try this on. The proposition of the "voice service" hasn’t been updated in 100 years  and the service has become undifferentiated and commoditised. This lack of differentiation has lead to cheaper pries. Full stop! There's your 'decline'

Other industries are guilty of this too. The Banks loaning on property they shouldn’t because they need to show outrageous profits, the share market who drove them too it, the US auto industry, EU farmers you get the idea.

What’s your elephant and how is it holding you back?

PaaS – the game is on

Back in December I wrote a piece about how Cisco, through its partial acquisition of VMWare could make some very serious inroads into the PaaS market. Then in January the NYT leaked a story about how Cisco was getting into the server market, which in my view supported my hypothesis.

Today my RSS reader is loaded with bits about how IBM with its network partner (and arch Cisco rival), Juniper is extending its Blue Cloud construct.

Techchuck does a great job of describing it here, stating that the

“[technology will allow] businesses to install hybrid public-private cloud capabilities across IBM’s 13 "Cloud Labs" spread across the world. The companies have created technology that would allows enterprises to extend their private clouds to remote servers in a secure public cloud at the click of a button. Once the technology is installed in the Cloud Labs, businesses can easily switch clients workloads when resources become constrained...” My emphasis added.

 This is a great leap forward toward much more widespread adoption of Cloud computing as it addresses several issues for corporates (not SMEs) .

These being security and control. Juniper (and Cisco) are key players in Telco private network constructs, if you could extend your private network into the Virtual data Centre (VDC), then a major performance and security hurdle is overcome. After all you want the servers performance to feel like it would if it were in your LAN / WAN. It also addresses security because all that stuff is encrypted.

The second thing is control, read this from Mercury News

While many companies say they can deliver computing power on demand, most are using relatively old technology, analysts say. They aren't able to move software programs around the planet, dialing up a data center in Dublin, Ireland, when a server farm in San Jose reaches full capacity.

IBM demonstrated it can do exactly that at an event at its Silicon Valley Lab on Monday morning, as Rahul Jain, IBM's cloud architect, clicked on a box representing a computer in San Jose and dragged it over to a panel representing a data center in Dublin.

Notice how the CUSTOMER does this, not the service provider!!  This is gold because the customer feels like they are in control (which they are) and the service provider doesn’t have to have personnel doing it.

To me this is PaaS at a level of maturity that will significantly improve adoption. This is true convergence (network, IT, and services) in action. Most importantly it targets a segment (corporates) with money (banking excluded), who experience genuine costs and are willing to pay… wow an initiative with a viable business model!