Proprietary or open standards– where economics and philosophy collide

There has been a fair amount of commentary within the cloud community about standards.  The view is that for cloud to really take off we need vast interconnectedness, and the lack of standards, is somehow holding us back.  Possibly…

Thinking about cloud computing from a developers point of view, this absolutely resonates. But if you think about if from both a buyer and a provider view point…then I think that vertically integrated, proprietary systems are exactly what we need…in some cases.

Those cases being where the current cloud offering is not quite good enough in the customers eyes. That is, there is a functionality or reliability gap between the current offerings and what the majority of customers want (this changes by customer). 

You could argue (which I am) that recent outages like the ones at Sidekick and Google  create a perception in customers minds that the cloud isn’t quite there yet. Its "not good enough".

Because of this, I think cloud providers need to be using proprietary technology that is vertically integrated. By doing this the provider can control what happens along the whole system, which will address the reliability or functionality gap to some degree.  This is good for the provider because in the market you have an advantage against the competition and hence win customers. It also allows you to find the elements that are still causing the 'gap' and incrementally address those.  I think the poster child of this approach is Salesforce.com. In terms of cloud providers, they are top of mind (to me at least) for reliability and functionality.

Now before I get flamed as a heretic, there is absolutely a time and place for an open, standards based modular approach.  To me these traits become important when you stop being able to win the competitive game based on functionality or reliability.  When those things become table stakes and customers are demanding ever more customised offerings, then you need flexibility, creativity and speed. You can’t do this using proprietary vertically integrated systems. You can’t be nimble enough, creative enough, customised enough and of course relevant enough with a monolithic approach.  In this world, open standards are absolutely required.  Just look at the struggle Telco’s are going through as they try to remain relevant.

Because this is a question of timing, there is bound to be tension about this issue. Its exacerbated because ‘cloud’ is so broad, some parts of it are way more advanced and probably should be moving to a modular approach, others not so much.  To me, if you can step aside from the philosophical argument and instead focus on the customer requirement (make it good enough) and how you can compete (ie make money) from cloud the debate looses its heat.

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