Nov 25, 2011

Update on SKYY ETF: a few months in

Now that we've got a few months of trading of the SKYY ETF in under our metaphorical belt, it's interesting to see that it has dropped in price from a high of $20.58 to a low of just over $15 a share. It's currently trading at $16.97 (as of approximately 11:30AM Eastern time on Nov. 25, 2011).

The market for cloud based services doesn't seem to be slowing down. Google insight shows that searches for IaaS and PaaS still appear to be growing though those for SaaS may be waning a bit as it is a more mature market than either of the other two.

Maybe it's related to overall global market conditions, to the state of US government finances, or the performance of the tracked stocks but,ether way, it's not looking good for SKYY or its initial investors if they held it in their portfolio beyond the first week.

Nov 23, 2011

Platform as a Service. Remember that "aaS"?

So it seems that there has been more and more interest in platform as a service (PaaS) over the past year. Developers writing code for the cloud will definitely be happy as more and more tools are launched.

Mainly, I'm curious to see the rate of adoption of the various platforms. Will it be as tentative as infrastructure as a service was, or will it be more rapid given that the market's comfort level with cloud computing in general has increased?

My personal predictions:
  1. Developers will increasingly develop true software as a service applications (SaaS) and apps for the mobile world leveraging the elasticity of the platform and infrastructure.
  2. PaaS will be the battlefield for cloud. Much like the OS wars and the browser wars, the vendor whose platform is the most leveraged or used to develop cloud based software and mobile apps will win.
  3. Mobile will be a major driver for PaaS adoption.
.Net is one of, if not the dominant platform available to developers these days. Apple has Cocoa, SUN puts out Java, and a myriad other platforms like Ruby, Python, etc. are available for developers these days.

Will the winner of the PaaS war integrate multiple other languages as well, or will it force the market onto a standard offering of 1 (or 2-3) platform(s)? Will the other languages become niche platforms that smaller providers will offer?

There are many questions at this point with few answers but I suspect that the winning vendor will have to offer some options to remain relevant to the market and maintain overall leadership.

Nov 22, 2011

Innovation & Community Clouds--Part 2: Benefits of community clouds

So far, we've discussed what a community cloud looks like at a high level. In this post, we'll see a few of the benefits and take a look at a real-life example.

A community cloud, like any communal resource, is shared among stakeholders that have something in common such as regulatory requirements. This means that the cost of standing up a communal cloud versus individual private clouds can be significantly cheaper due to the division of costs among all participants. Think of it this way:
  • If organizations A, B, and C each implement their own cloud computing environment to meet regulatory requirements, and assuming that these costs are roughly the same, we have $A + $B + $C = 3x the cost.
  • However, if these organizations represent a community with common interests, then they can deploy a single cloud computing environment that meets all of their needs at some reduced cost; thus $(A, B, C) = 2x the cost of individual cloud environments (instead of 3x).
For this to work, the community needs to have some interest in its success, some skin in the game, so to speak. Joint ventures are a good example of such an arrangement. Each participant in the community contributes some consideration such as resources, funds, other assets, or some combination thereof, and ideally in equal proportions.

Another acceptable arrangement could be to outsource the management of the community cloud to a cloud provider. The advantage here is that the provider would be an impartial third party that is bound by contract and that has no preference to any of the customers involved other than what is contractually mandated.

Yet another arrangement would be for one of the participants to provide the cloud based services to its peers as a service provider. We already mentioned that the New York Stock Exchange (NYSE) is doing just that and will begin billing in a utility based billing model sometime in the near future.

One last thing that bears mention in this posting is the fact that community clouds can foster innovation. Typically, we think of community clouds as being horizontal in nature and encompassing similar organizations such as hospitals or government, for example. In fact, community clouds are not limited to horizontal integration, they can be vertically integrated like supply chains.

For example, a manufacturer produces a widget that is transported to a warehouse and distributed to retailers who then sell it to consumers. Tools residing in the community cloud can be used to leverage the information stored to serve customers and the supply chain, such as return tracking and just-in-time production and distribution. It is at this intersection of big data and tools that community clouds can really contribute to innovation.