I didn't know whether I should chuckle cynically or slow clap the recent hubris of an Amazon (NASDAQ:AMZN) executive, quoted in InformationWeek, with a tech prediction set to be fulfilled in a mere ten years Amazon: Era Of Data Centers Ending:
The era in which most big companies operate their own data centers is coming to a close. Instead they'll turn, slowly but surely, to the cloud. That's the bold prediction Amazon's Adam Selipsky, VP of product marketing, sales, and product management, made Thursday at Amazon's Web Service Summit 2012 in New York.
Selipsky is perhaps really just talking about the transition of enterprise IT to the public cloud (not data centers or private clouds), perhaps in line with Nicholas Carr's The Big Switch, which has compared the rise of IT with the rise (and then fall) of the privately-owned and operated power plant.
Without denying cloud computing's massive impact on enterprise IT, I think it is still easy to get lost in the vendor haze of massive switches to any self-serving single standard (or model -beyond core networking and communications stacks, which are often economically too powerful to resist) and the dynamic, pulsating world of IT services and solutions. Innovation and conformity are not often mentioned in the same sentence as allies.
In the same article Amazon also talks about lowering prices for customers. That also sounds good, and perhaps one form of validation that they're achieving new economies of scale (also from InformationWeek):
Vogels (Werner) also pointed out that Amazon has reduced AWS prices 19 times as it has gained economies of scale. S3 customers saw costs drop by as much as 40% with a price cut earlier this year, he said, while some EC2 users saw their costs drop by as much as 32%. It's this cost promise that may eventually wear down would-be customers who might not otherwise consider breaking out of what Vogels described as "the traditional model of enterprise software development."
That is pretty amazing, until you read Art Wittmann's more sobering assessment of public cloud savings with Does The Cloud Keep Pace With Moore's Law?:
In fact, the U.S. Department of Energy, in a recent report comparing the cost of the government's in-house supercomputing centers to commercial cloud services, concludes that Amazon pricing isn't keeping pace with Moore's Law. "For example, the cost of a typical compute offering in Amazon has fallen only 18% in the last five years with little or no change in capability," the report maintains. "This translates into a compound annual improvement of roughly 4%. Meanwhile, the number of cores available in a typical server has increased by a factor of 6x to 12x over the same period with only modest increases in costs."
In the spirit of clearing the air on the billowing practice of cloud prediction and prognostication to which I have also indulged, we're also working on a panel with the Uptime Symposium at 10:30 on Tuesday May 15, entitled "To Cloud or Not to Cloud", moderated by Jonathan Koomey, PhD. Panelists from IT infrastructure, retail and wholesale co-location vendors will be given an opportunity to clarify some of the key differences and drivers between enterprise IT, and private and public clouds. I hope that this panel also talks about the business cases of enterprises that have migrated off the pure public cloud model and into private or even hybrid clouds. See, for example: The Hybrid Cloud is the Future of IT Infrastructure. Stay tuned.
Let's face it, most enterprises don't have a one-design fits all anything. So the likelihood of a massive shift to the public cloud and away from enterprise IT seems unlikely given the momentum of private cloud innovation, even at public cloud player (and marketer) … Amazon (see Amazon Makes Clever Private Cloud Play):
Instead of viewing them as potential competitors, Amazon has come to view Eucalyptus as an ally in consolidating its hold on the public infrastructure as a service market. With Eucalyptus installed inside enterprise data centers, its customers have a way to build their private clouds without disrupting their Amazon Web Services relationship.
What Amazon has accomplished with the public cloud in a few short years has been nothing short of amazing. The only problem I have is when the marketing machine starts running on heavy doses of vapor and attempts to mesmerize the market with very forgiving and easily forgotten ten year predictions.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.