Next week in Tel Aviv I'm going to participate in a panel about "the future of clouds", moderated by the legendary Yossi Vardi. In preperation, I wrote down a few of the concepts I've been thinking about for the past several years and I thought I would share them with my readers to get some feedback. Keep in mind these are long-term predicitions and trends (in no particular order).
- PaaS Rules :IaaS becomes niche. In the long-run, IaaS doesn't make sense, except for a limited set of scenarios. All IaaS providers want to be PaaS when they grow up.
- Public Rules: Internal clouds will be niche. In the long-run, Internal Clouds (clouds operated in a company's own data centers, aka "private clouds") don't make sense. The economies of scale, specialization (an aspect of economies of scale, really) and outsourcing benefits of public clouds are so overwhelming that it will not make sense for any one company to operate its own data centers. Sure, there need to be in place many security and isolation measures, and feel free to call them "private clouds" -- but they will be owned and operated by a few major public providers.
- Specialized Clouds: There are many dimensions to an application: the pattern of its workload; the government regulations it must adhere to; the geographic access to it; the programmig language and framework it supports; the levels of security, performance and reliability it requires; and other more specialized requirements. It's not a one-size-fits-all world. At least, not always. There will be big generic clouds, and then, many specialized clouds. I've written about this in the past.
- Government Regulation: The largest cloud providers will become nationally strategic infrastructure (like utilities, financials, telcos, airlines and shipping companies in the past). Given my "public rules" prediction above, cloud providers will become crucial infrastructure to the economy and the interests of their respective nations. They will become "too big to fail". Any change in their pricing will have a profound effect on the economy. And they will also hold the risk of a "cloud run" (similar to a "bank run", a sudden surge of demand they haven't anticipated. Not to mention the fact that they will maintain the sensitive data of consumers, corporations and government agencies. Any way you slice it, it spells regulation. But if history teaches us anything, this regulation will only come after "The Great Cloud Catastrophe" (use your imagination to figure out what that will look like).
- The Control vs. Freedom Debate: This sums up the story of cloud computing so far. Freedom is the catch-all phrase for drivers of cloud adoption (no upfront costs, on-demand, self-service, empowerment of the rank & file - e.g., developers), but control (or lack thereof) is the catch-all phrase of barriers to adoption by large enterprises. Every democratic country experiences this: there is sometimes a contradiction between the so-called sacred principles of rule-of-law and personal freedom. It's a matter of drawing the line -- and we're just in the beginning stages of understanding this issue when it comes to cloud computing. This debate will be with us for years to come and will shape the variety of enterprise cloud computing offerings.
- Cloud Federations - While AWS has enjoyed tremendous international success, in any business that relies heavily on trust, such as IT, nothing beats a local brand. So people will flock to the cloud of their trusted national telco or big IT provider. But on the flip side, they will need to reach a global audience and will want servers around the world. As a result, we will see the formation of cloud federations, similar to what we see in airline alliances, such as Star, SkyTeam and Oneworld.
- Financial Efficiency and Sophistication: Computing is a commodity, and every commodity ends up being traded, future-traded, brokered, arbitraged, speculated and manipulated with derivative instruments. The good: the market becomes very efficient. The bad: the market becomes complex and opaque. We are already seeing spot markets
- Cloud Standards: About two years ago there was a strong wave of interest and discussion about the need for cloud standards. I wrote then, and still believe, it is too soon. But it is also inevitable. We will, however, see multiple competing standards. At least one formal stanard specification from a standards body and several de facto standards from large commercial players such as Amazon and VMWare.
- The Ecosystem Wars: I've recently written about the importance of ecosystems in cloud computing. Success in building an ecosystem will be a determining factor in who wins and loses in the cloud. It is not just about the size and breadth of the ecosystem, but how well it all works together. In many ways, Amazon has done a poor job of this so far, but it has the one big compelling factor for an ecosystem: a very large install base.
- Horizontal and Vertical Consolidation: As with any industry, as cloud computing matures, it will consolidate. This will happen both horizontally, for example large IaaS players will roll-up regional and smaller IaaS and hosting providers, as well as vertically, for example IaaS providers will acquire cloud management system providers such as RightScale and enStratus.
I'd love to hear some feedback on these trends. Do you agree? Disagree? Have I left something out? Please let me know in the comments.