Thinking Out Cloud

Cloud Computing and the Financial Crisis

On-Demand Enterprise just published a piece I wrote about some of the lessons learned from the current financial crisis and cloud computing. Although there is of course no direct connection, there are some interesting conclusions.

Here's an excerpt:

Although I'm not suggesting that it was the crux of the current crisis, one of the questions that has come up recently is why Wall Street's massive investments in value-at-risk analysis system did not curb the downfall. We have not heard (at least not yet) that these risk analyses were blinking with red lights and were ignored. In an HPCwire piece entitled "The Quantitative Models Tanked Too," editor Michael Feldman tackles this issue. Although not the only explanation, one of the issues raised in the article is the fact that the models used were over-simplified. Feldman explains that "in some cases, limits in computational power made these simplifications necessary so that the valuation models could be run."

Done right, cloud computing offers nearly limitless computing power. Had they used a cloud service such as EC2, and software that is built to scale on the cloud, the quants on Wall Street could have easy, cheap and on-demand access to massive computation power.

Read the full story.

Ellison's Anti-Cloud Computing Rant

Once again, in either complete self-unawareness or a calculated manipulation, Oracle comes out with a cynical statement. Ben Worthen reports that on the Oracle earnings call, Larry Ellison said the following:

The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?

We’ll make cloud computing announcements. I’m not going to fight this thing. But I don’t understand what we would do differently in the light of cloud computing other than change the wording of some of our ads. That’s my view.

More than a couple of people that I respect, including Ben Worthen and Dan Farber, have written publicly or told me in person something to the effect of "you have to admit he has a point." 

Although, I agree that the term cloud computing has been hijacked by many vendors to become meaninless in some cases, that's missing the point of what Ellison is saying here. What he's saying, in no uncertain terms, is that other than using cloud computing in Oracle marketing, they are not going to change anything. You still think that makes sense?

To answer Larry's question, here are three things Oracle can do differently: 

1. Offer their middleware and database customers a pay-per-use pricing model on cloud environments such as EC2, Joyent, GoGrid and Flexiscale. Charge by the hour and only for cpu/hours actually used.
2. Offer all of their application software on a SaaS/on-demand subscription basis 
3. Develop products that are suitable for virtualized highly-distributed environments, and therefore, or are not highly dependent on centralized components such as their database. [UPDATE: adding some more specifics based on additional research]] Specifically:
   1. Enable Oracle RAC on EC2
   2. Enable WebLogic clustering (!), despite the fact there is no multicasting on EC2  
   3. Support Amazon AMIs (as opposed ot providing some AMIs with no support) 

Oracle won't do this. Why?

As I and others have already pointed out several times, Oracle is the company of status quo. Things are very good for Oracle the way they are exactly now -- any change is unwelcome. They make money by having high-paid aggressive sales people shove big stacks of software down customers throat, forcing them to buy this software with up-front, fully paid-up prepetual licenses. They then continue to make profit from these customers by selling them annual maintenance fees, most of which customers don't need or use, as Safra Catz herself admits.

Oracle does not share in any way in the customer's risk. If the customers ends up canceling the project. Too bad. It's now shelfware. If the customers ends up not needing to scale up as much, too bad. If the customer hits bad times or any other reason where the software is no longer needed -- too bad. Oracle has already pocketed its profit and it's off to sucker in the next guy.

So take Larry at his word when he says Oracle is not going to change anything but marketing.

GoGrid's "No Hardware" Campaign

I really like the new "No Hardware" campaign from our friends at GoGrid, picking up on Salesforce.com's "no software" slogan. John is hilarious in the role of Dr. GoGrid.

GigaSpaces on the Joyent Cloud

Kent Lagley writes on the Joyent blog about the work he has done with Dekel and Owen running GugaSpaces on the Joyet Accelerators. It's a well-written detailed blog and in a post entitled Cloud Computing with Java, Kent adds some more info on his personal blog, ProductionScale. 

My favorite quote from the Joyent blog:

Some other exciting things about this exercise in the lab was that it was, in general, easy. We added and removed nodes, scaled linearly, pulled nodes out, re-deployed the application in seconds to minutes, we processed large amounts of data, and we did all this in the cloud with really minimal efforts.

Some formal announcements about our partnership with Joyent coming soon.

Oracle and Cloud Computing. Funny.

The announcement by Oracle this week that they are "on the cloud" was once again quite an amusing piece of public relations. I don't know if Oracle is serious when they make these announcements or if they are secretly smiling to themselves.

Not everybody ate it up (although many did). Vinnie Mirchandani, a keen observer of the enterprise software space, wrote: "It will not reduce costs of Oracle licensing or even worse, the annual maintenance cost."

Oracle seemed to have missed one of the main points of cloud computing -- that it's an on-demand approach and that includes software licensing costs.  In case you didn't notice, Oracle is not offering pay-per-use pricing for the cloud. All they are saying is that you can use the regular perpetual, upfront, fully-paid software license on EC2. Big Whoop.

The other major problem with the Oracle announcement is that their software really isn't suitable for a cloud environment. It can't grow and shrink on-demand, it's not self-healing, it's dependent on centralized components, it's complex. It's just not right.

I discuss this in greater detail in GigaSpaces and the Economics of Cloud Computing, where I also discuss another amusing press release from Oracle. Reposting it here for your convenience:

Another interesting comparison is revealed by this amusing press release from Oracle about a start-up customer named Qtrax. Look at the stack Oracle managed to sell them to build their application. I put in brackets the price per CPU for each Oracle product from the official price list, and I quote:

"Qtrax's implementation includes Oracle Database [$17.5k to $47.5k], Oracle Real Application Clusters [$23k], Oracle Enterprise Manager [$3.5 to $20k+] and components of Oracle Fusion Middleware [?], including Oracle Application Server [$10k to $30k] and Oracle Coherence [$4k to $25k]. With this software now in place, Qtrax will have the ability to support millions of concurrent users [they better!]."

On top of these numbers (which total in the range of $58k to $145.5k per CPU¹)add a 22% annual support fee. As these are perpetual licenses, let's break the license numbers to an hourly rate by assuming 24/7 for 3 years: we get $2.20 to $5.54. Even if you decide to be generous and divide by 4 years, you get $1.65 to $4.15. Now, let's not forget that Oracle doesn't actually offer any special pricing for it's products on EC2 (i.e., an hourly rate)² so you would have to buy the licenses upfront, as Qtrax apparently did.

A True Cloud Practitioner

This is a long overdue acknowledgment of my friend and colleague at GigaSpaces, Dekel Tankel's blog - Thoughts from the Clouds. A lot of people out there are talking about cloud computing, without truly understanding the issues, and without real-world experience -- and so we need more blogs such as Dekel's.

Dekel is out there every day working with the people who are truly practicing cloud computing. And I am not talking about the pundits, but the real-life customers who are using platforms such as EC2, Joyent and GoGrid -- and of course, running on the GigaSpaces cloud application server. And Dekel is doing it hands-on, helping GigaSpaces customers get on the cloud.

So check out his blog and encourage him to write more!

The Mysterious Case of the Google Cloud Computing Group

I just posted the following to the Cloud Computing discussion board on Google Group. Let's see what happens.

Folks,

Are we going to publicly discuss these posts:
http://samj.net/2008/09/enomalism-vapourware-lands-enomaly-in-c.html
http://blog.jamesurquhart.com/2008/09/what-hell-is-going-on-with-cloud.html
http://blog.jamesurquhart.com/2008/09/cloud-computing-on-google-groups-is.html
Or is this whole thing going to be ignored?
Geva

UPDATE: I was informed by Khazert that my message will not be posted on the list and the whole thing will indeed be ignored. He told me he was especially offended by the fact that James and Sam posted his and Reuven's photo (huh!?).

Even before this incident I heard quite a bit of frustration about the Google Group. Some interesting alternatives have been created -- they are mentioned in the comments to this post. I also found this one to be quite promising: http://www.cloudave.com/.

James Urquhart also suggests 9 cloud news sources you may not know about, but my advice is just read James's blog. He covers it all.

Pew: Cloud Computing Gains In Currency

The Pew Research Center published an interesting report about cloud computing adoption. The report focuses on consumer use of Software-as-a-Service applications and basic services such as email, photo-sharing and so on. There are some mentions of Infrastructure-as-a-Service (e.g. Amazon Web Services), including a reference to my GigaOm post How Cloud & Utility Computing Are Different. 

Cloud Cafe Podcast

A couple of weeks ago John Willis recorded a podcast with me as part of his excellent Cloud Cafe podcast series. He just posted it online and you can listen to it here.

In it we talk about cloud computing in general, Amazon Web Services, possible Amazon competitors, and of course, GigaSpaces and its cloud offering. We go into some detail about various topics such as my blog post GigaSpaces and the Economics of Cloud Computing.

To quote John: "If you are a cloud junkie this is a must listen."

Thanks for the interview, John.

Listen to the Podcast.

Thoughts on Platform-as-a-Service

The recent news about layoffs at Bungee Labs has triggered a discussion about the viability of the Platform-as-a-Service concept. In this post I attempt to map the PaaS landscape and discuss possible strategies and approaches for the platform vendors. But first, to understand PaaS, we need to look at where it fits in the larger picture. PaaS is one of what I view as the three pillars of cloud computing:

1. Software-as-a-Service: Although the term "software" denotes any piece of software, the term SaaS is usually applied to the idea of delivering a complete software application to its end users over the Web, and typically with a subscription or per-usage pricing model. Examples include Zoho and Salesforce.com.
2. Infrastructure-as-a-Service: IaaS is about providing basic IT resources, such as compute power, memory and storage, over a network (typically the Internet) and usually with a subscription or per-usage pricing model. Examples include Amazon Web Services, GoGrid and Flexiscale.
3. Platform-as-a-Service: The term PaaS is often confused as it is actually used to refer to to two distinct elements:
   
   1. Web-based development tools (aka IDE). This could more accurately be refered to as Tools-as-a-Service (TaaS).
   2. A run-time application platform that enables running applications in the cloud, typically on top of an IaaS and delivered as SaaS.

 The two types of PaaS are sometimes confused because vendors often offer them combined as a single solution. Things are further confused because they often include a third, separate, component: that of a development framework or programming model (what is commonly referred to as the API).

To understand this better, let's compare to the more familiar and established world of Java. Building and running a standard Java app requires three main elements: the API (the Java programming language itself), a run-time platform (the Java Virtual Machine, or JVM -- or more accurately, the Java Run-time Environment, or JRE) and development tools (popular IDEs such as Eclipse and IntelliJ). Note that the three are separate from each other. A developer can choose which IDE and which JVM implementation (from IBM, Oracle, Sun or others). Also taking advantage of the Java Run-Time Environment does not require the Java programming language. One can use other interfaces such as JavaScript, Groovy and JRuby.

 The same principles apply to the Java Enterprise Edition (JEE). A developer can choose from a number of application server implementations (the run-time), IDEs and APIs (e.g., Spring Framework or EJB).

 

Armed with this understanding, let's look at Bungee Labs again. They made some crucial decisions with their product, BungeeConnect, which significantly impact the adoption of the product. the first was that they provide all of the elements: the development tools (a web-based IDE), the run-time platform (they may be leveraging other platforms underneath but it is transparent to the user), the hosting (i.e., IaaS) and the API (they offer a proprietary C-like API).

 
Second, they decided that you cannot separate the four elements from one another. They are tightly-coupled. You cannot use their tools without also adopting their API, run-time platform and hosting service. If you like their tools, and want to use them with other run-time platforms, APIs or cloud providers (hosting), too bad.

Third, they didn't leverage standards. Although their programming language syntax is C-like, so it is at least familiar to many developers, it will not execute on other run-time platforms as-is.

The adoption barriers created by Bungee's self-imposed limitations are becoming evident. A developer or company contemplating the use of BungeeConnect are forced to make a strategic, long-term decision about the future of their business: to be locked-in to Bungee's product in almost all aspects of their own product.

 

I don't mean to pick on Bungee. As a fellow entrepreneur, I sympathize. I can also understand the considerations they had when making these choices. For one, the notion of creating a "total solution" seems appealing at first. And from a practical perspective, it is easier to create a more powerful solution when you restrict and control the environment it operates in. Besides, they were being ambitious, and I respect that.

 

Let's look at some alternative approaches that Bungee could have taken (and still can), as well as what other players have been doing.

Go-To-Market Strategy

Generally speaking, achieving adoption for a new platform is a difficult task. It is true that the advent of cloud computing creates an opportunity for new players, but major challenges remain. There seem to be four main approaches to doing this:

• Brute Force: the very biggest vendors have the marketing muster, credibility and resources to make it happen by "brute force." An example of such an approach would be Google App Engine. Google has taken the exact same approach as Bungee -- they provide all four elements -- but they obviously have the market visibility and budgets to achieve fast adoption.
• Open Source: It means two things: first, pricing adoption barriers are removed (i.e., offer it for free and develop premium products and services later). Second, the product source code is available, allowing end users to customize it and the comfort of having access to source if something happens to the vendor. 10gen is an example of a vendor taking this approach.
• Specialized: Focus the platform on a particular segment of the market, instead of trying to be all things to all people. The key is that you have to build a "total solution" for that particular segment. This is reminiscent of Geoffrey Moore's Crossing the Chasm model. Ning is a good example, as it's a platform focused exclusively on building social networking applications. Other forms of specialized platforms could focus on a particular industry or type of application.
• Ride the Coattails:This strategy involves building a platform that allows developers to leverage an existing install base. The Facebook Platform is a good example. Given that today many applications expose their APIs to the general public, vendors other than the 'owner' of the install base can take this strategy.

Target User

Another dimension PaaS vendors should think about is who is the target user of the platform. The typical choices are programmers versus so-called business users (non-programmers). Bungee, Google App Engine and 10gen are all clearly targeting programmers. Ning, on the other hand, allows people without any code-writing skills to quickly create their own social network. They do, however, offer developers the ability to further customize their application through programming.

Totality of the Solution
As already noted, PaaS-related vendors need to decide which elements of the 'stack' they provide. Specifically, do they provide the run-time platform, the development tools, the hosting service, all of the above? And if so, do they lock users into their components or do they allow use of certain components from other vnedors? Here's a list of vendors and the choices they made:

Product	Run-Time	Tools	IaaS	API	Primary Target Users	App Focus
BungeeConnect	Yes	Proprietary web-based IDE	Yes	Yes. Proprietary	Developers	Free form
AppJet	Yes	Proprietary web-based IDE	Yes	Semi-proprietary, JavaScript-based	Developers	Free form
Jboss Cloud	Yes	Stanadard, installed IDEs	No (suports EC2)	Standard (J2EE)	Developers	Free form
GigaSpaces Cloud	Yes	Standard, installed IDEs + Cloud Tools for deployment	No (supports multiple clouds, including EC2)	Standard (Java/Spring, .Net, C++, JavaScript, Groovy, JRuby, JMS, JDBC, Jcache)	Developers	Free form
Aptana Cloud	Yes, for PHP and AJAX1	Aptana's open source installed IDE (based on Eclipse)	Restricted to Aptana hosting2	Flexible IDE for a variety of APIs, including JavaScript/AJAX, PHP, Ruby, Java	Developers	Free form
Force.com	Yes	Yes	Restricted to Salesforce.com hosting	Proprietary		Database-centric
DabbleDB	Yes	Proprietary web-based tools	Restricted to DabbleDb hosting	JavaScript based on JSON schema	Business (developer customization options)	Database-centric
Zoho Creator	Yes	Proprietary web-based tools	Restricted to Zoho hosting	Proprietary	Business (developer customization options)	Database-centric
LongJump	Yes	Proprietary web-based tools	Restricted to LongJump hosting	Java, REST, SOAP	Business	Database-centric, Workflow-centric
Google App Engine	Yes	Standard, installed IDEs + SDK	Restricted to Google App Engine hosting	Python (with limitations) and additional task-specific APIs	Developers	Free form
Coghead	Yes	Proprietary, web-based tools	Restricted to Coghead hosting	Proprietary	Business	Database-centric, workflow-centric
WyaWorks	Yes	Proprietary web-based tools, and accessible via installed IDEs	Provide hosting and allow deployment on any infrastructure	JavaScript, JSP, Java	Business and Developers	Free form
Intuit Quickbase	Yes	Proprietary, web-based	Restricted to Quickbase hosting	Proprietary3 Http API, XML/XSL and a Formula Language	Business	Database-centric
10gen	Yes	Yes, but you can develop code with standard IDE	No, supports multiple clouds	Standard (JavaScript, Python, Ruby)	Developers	Free form
Rollbase	Yes	Proprietary, web based tools	restricted to Rollbase hosting	Proprietary	Business (developers cutomization options)	Database-centric
Morph Labs	Yes	Not provided by Morph	Restricted to Morph Labs hosting	Standard (Java, Ruby)	Developers	Database-centric

Notes to Table:

1. According to a comment posted by Kevin Hakman of Aptana, a Ruby-on-Rails run-time will be available soon.
2. Aptana Actually uses Joyent as the host today (although this fact is transparent to the user). The company plans to add the ability to choose other hosting providers and does not see hosting as part of its business model (see comment by Kevin Hakman below).
3. The QuickBase API is proprietary, but like others on the list, it it can be wrapped by other, standard APIs. The QuickBase user comunity has already done so for Perl, Ruby, PHP and others.

Community and Eco-System

Another important aspect for any platform, PaaS included, is the notion of an eco-system and a community that is built around it. How well the platform vendor encourages, enables, nurtures and promotes this community is of critical importance. There are a number of ways to do this:

• Classic community tools: forums, ability to share and blog, wiki documentation editable by users, etc.
  
• Allow Extension of the Platform: This can be achieved by exposing APIs and/or open sourcing the code and providing the process and tools for submitting extensions, plug-ins and add-ons, bug fixes, etc. 10gen, for example, has open sourced its platform. Many of the other players in the table above are exposing APIs and providing other ways to modify and customize the platform. At GigaSpaces, as another example, we open sourced our API -- OpenSpaces -- and created the openspaces.org community site, which lets developers share their creations.
  
• Create a marketplace around the platform: Often the PaaS vendor already garners interest and attention and can make that marketing prowess available to its own users. Many of the PaaS providers listed here allow their users to list their creations in some sort of a catalog or marketplace. Other users can sometimes clone the creation and extend it, leveraging work that has already be done. In many cases the platform vendor allows its users a way to monetize their efforts. Salesforce.com's App Exchange is a good example of this. By making its platform open and extensible, Amazon enabled a whole cottage industry to develop around its Amazon Web Services platform, with companies such as RightScale.
  
• Access to end-user data: One of the most effective (and tricky) ways to foster an eco-system around the platform is to allow building applications that can access end-user data in other applications. Now when I say "access", I mean that they have the technical ability to do so. The end user, of course, needs to approve such access. For example, when you build an application on Force.com, it can access the contact, account and deal information in the users Salesforce.com application.

If anyone thinks I misrepresented any of the solutions in the table above, or if you have any other thoughts, please comment.