I’ve argued that Cloud vendors are in a better position to monetize open source products than open source software vendors themselves.  I’m not alone in this thinking.  In William Vambenepe’s post, “Cloud + proprietary software = love”, there may be yet another reason for open source vendors to drink the Cloud Kool-Aid with caution.

Vambenepe’s writes:

“If Cloud providers get it right and software vendors play ball, the ‘proprietary vs. OSS’ debate may become more favorable to proprietary software in the Cloud than it is on-premise.”

Vambenepe’s argument centers on Cloud computing alleviating buyers from the hassle of license management.

“The removal of license management as a concern may not make a big difference to large corporations that have an Unlimited License Agreement, but for smaller companies it may take a chunk out of the reasons to use open source software. Not only do you not have to track license usage (and renewal), you never have to spend time with a sales rep. You don’t have to ask yourself at what point in your beta program you’ve moved from a legitimate use of the (often free) development license to a situation in which you need a production license.”

With license management being equally unnecessary for open source or proprietary software in the Cloud, buyers can focus on other selection criteria such as costs. Unlike development or unsupported usage scenarios, both open source and proprietary products have an associated license costs in the Cloud.  This is obviously for products delivered and supported by the Cloud provider or the Cloud provider’s partner.  To make Vambenepe’s point, I decided to compare pricing for WebSphere Application Server and the most closely related Red Hat product available on Amazon EC2.  Amazon charges $0.795 per hour to run the IBM WebSphere Application Server on Novell SUSE Linux on a Standard Small Amazon Machine Image (AMI) in the US.  This charge includes Amazon EC2 costs and the per hour license costs of Novell SUSE Linux and WebSphere Application Server.  Alternatively, Amazon charges $1.21 per hour to run JBoss Enterprise Application Platform on Red Hat RHEL on a Standard Small EC2 instance plus a monthly $119 recurring fee.  [UPDATE: 2009-12-11: Rich makes the point I am comparing apples to oranges.  That was not my intention. I simply picked the only two application server Amazon Machine Images (AMIs) that I could easily find pricing for. And in retrospect, my intention was not to compare proprietary versus open source pricing in the cloud, but rather to compare the price differential of proprietary versus open source products in the cloud versus on-premise.] Obviously this is simply one comparison and other comparisons will play out in favor of open source product pricing on the Cloud.  But that’s not the point. As Vambenepe argues, both open source and proprietary products require a license in the Cloud, and the license cost differential doesn’t always favor open source product in Cloud environments.

With license management a wash and license cost differential being much more balanced than one may instinctively think, Vambenepe argues that choosing proprietary software in a Cloud deployment is likely to be an easier decision than on-premise.

Tim Bray wrote “Makes all sorts of sense to me” when tweeting about Vambenepe’s post.

What do you think?

Follow me on twitter at: SavioRodrigues

PS: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.”

While VMware is the market leader in desktop and server virtualization, open source Xen has enjoyed a similar position in the Cloud service provider market.

Service providers growing beyond traditional hosting to Cloud infrastructure as a service have typically chosen Xen as the basis of their offering. For instance, Amazon’s EC2 is based on the Xen hypervisor, as is the Rackspace Cloud offering. Simon Crosby, CTO at Citrix Systems, the vendor behind Xen.org, explains why the Xen hypervisor has the traction it does:

“Free is not enough for some Cloud providers. Some companies need to be able to hack the software.”

Up until today, service providers had to take the open source Xen hypervisor and create their own Cloud platform around it. That changed yesterday with the announcement of the Xen Cloud Platform which goes beyond the hypervisor to deliver a platform for virtualizing storage, server and network resources. Citrix’s Crosby uses the analogy that this move takes Xen from producing a car engine to producing a car.

For customers, the most intriguing feature of the Xen Cloud Platform is the ability to move their deployments across Clouds created using the Xen Cloud Platform. The platform will adhere to the Distributed Management Task Force’s Open Virtualization Format (OVF) for virtual machine images, a standard which VMware helped create. Going backing to the analogy of starting with a car, versus starting with an engine with the hopes of building a car, the Xen Cloud Platform makes it vastly easier for vendors to create a Cloud offering. This will help drive down prices while at the same time giving customers the guard against vendor lock-in that they seek.

This recent Xen announcement seems like it could throw a wrench into VMware’s plans to grow its footprint in the Cloud service provider market. It should be noted that OpSource just recently announced a Cloud offering built on the VMware hypervisor. But one has to wonder if OpSource would have made the same decision in 6-12 months when the Xen Cloud Platform has had time to mature.  And when you consider service providers in emerging markets, the Xen Cloud Platform looks to be much more appealing than anything VMware has announced…yet.

All this competition in the Cloud market is great news for customers.  Onward.

Follow me on twitter at: SavioRodrigues

PS: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.”

TechCrunch is reporting that the free version of Google Apps, Standard Edition, is no longer being actively marketed. Google Apps includes Gmail, Google Talk, Google Calendar, Docs & Spreadsheet, Page Creator and Start Page. There was previously a no charge Standard Edition and a Premier Edition for $50/user/year.

The confusion and panic is somewhat funny and interesting; well, for someone whose data isn’t entirely beholden to Google. I say “entirely” because my personal email is stored somewhere on the Gmail servers. But I digress.

In any case, it seems that Google has shifted from offering Standard Edition free for anyone, including businesses, to offering Standard Edition free only for non-businesses. Although any user, business or non-business can still hit the Standard Edition page and register for the Standard Edition offering for free. Well, at least for now.

So why all the fuss?

Two key concerns arise from reading the comments on the TechCrunch story. First, there is the general “how dare Google take away my free lunch” sense of anger. Second, and more interesting, readers are asking “what happens to my data?”

The free lunch argument is understandable, but hey, everyone has bills to pay, even Google.

The concern about data sitting in Google Apps is much more worrisome. Data portability, or the cost of exit, as Alfresco’s John Powell schooled me on, continues to be increasingly important day by day. The Cloud/SaaS proponents haven’t really addressed this to the degree that users feel comfortable with their ability to move from vendor A to vendor B and bring their data along easily. But you could easily argue that this is no different than traditional enterprise applications.

It’s somewhat surprising how much we’re willing to trade off freedom tomorrow for productivity today, a point that Redmonk’s Stephen O’Grady makes. The “Google Apps for Business” FAQ makes no mention of how one would ever migrate their company’s data off Google Apps. As a buyer, I’d like to know that the vendor has at least thought of this and provides some tools. It would give me a sense of comfort with my purchase decision. As a user, who isn’t paying Google a dime, I should also care about the cost of exit, but I’m willing to set aside those concerns for the free lunch they’re providing me. At least for now.

What about you?

Follow me on twitter at: SavioRodrigues

PS: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.”

As much as I’d like to write about the rumored IBM acquisition of Sun, it’s probably best to leave that to others, for now.  I have no knowledge of any real or purported talks between the two companies.  I do know that if the deal goes through, I and many, many, many others will be impacted by it.  Hence, it’s best not to write something on the spur of the moment.

Instead, I’ll talk about Sun’s other reason for being in the news today; their Sun Cloud announcement at CommunityOne.  Aside from the catchy product name, how long did the marketing team work on that one ;-), I’m happy to see Sun move in this direction.  Sun is completely bang on with its vision of:

“a world of many clouds, both public and private, that are open and compatible.”

Sun Cloud won’t GA until later in the summer, so for now, we’re making predictions based on a marketing pitch, and arguably, a demo at CommunityOne (which I am not at).  Sun is promising to do much of what Amazon does today.  Sun believes that its Virtual Data Center (VDC) capabilities will differentiate it from Amazon. According to Sun:

“VDC offers developers a single management interface for staging an application running on OpenSolaris, Linux, and Windows. A drag-and-drop method is used for provisioning compute, storage, and networking resources via a Web browser.”

It’s also interesting that Sun chose to use a Creative Commons license for their Cloud APIs.  However, Glyn Moody tweets:

“Sun’s use of CC’d APIs to create an open ecosystem is interesting; doesn’t mean it’ll succeed, of course…”

I have to agree with Glyn.  With the future of Sun up in the air, it’s difficult for me to see a mass of developers or customers seeking Cloud services turning their back on AWS for Sun.  But, by the time the Sun Cloud becomes available, I suspect/hope Sun’s future as an independent company is more certain. Until then…

Follow me on twitter at: SavioRodrigues

Infoworld’s Paul Krill has an interesting article about the server operating system becoming a two-horse race between Linux and Windows in which both OSes will grow at the expense of others (i.e. Linux).  Market research we did at IBM over 7 years ago indicated that Linux would grow at the expense of Unix more so than Windows.  So, I’m not surprised that a Gartner survey from a Linux-oriented conference indicated a 3-to-1 ratio of migrations to Linux will be at the expense of Unix versus Windows.

Another interesting finding from the Gartner survey:

“Linux was ranked by 39 percent of respondents as the OS expected to have the most growth in their datacenters during the next five years. Windows was a close second, ranked as the OS with the most growth potential by 35 percent of respondents at the Linux-oriented conference.”

The fact that 35% of respondents at a Linux-oriented conference, reported growth of their Windows OS install base is telling.  As enterprises get more comfortable with Clouds, offering an environment to deploy Windows and Linux workloads is a no-brainer. I’m certain that Microsoft realizes this and will announce Linux OS support when the Microsoft Cloud goes live ;-)

Really, I’m not obsessed with cloud computing! I’ll try to write about something else next.  However, I wanted to reply to a post from Chris Keene, titled: “Larry Whistles Past the (Cloud) Graveyard”.  Chris writes:

“Larry’s rant is an extraordinary example of whistling past the graveyard. Oracle’s huge transformation over the last 10 years has been from an infrastructure company (databases & middleware) to an applications company (ERP, CRM, SFA ect). Now, just as this transformation is completed, along comes an infrastructure that will obsolete all the applications Oracle just got done rolling up.”

I agree that Larry’s rants sometimes distract from the real discussion.  However, I don’t agree that SaaS/Cloud is a magic bullet, let alone the only answer for customers.

A point that Chris doesn’t make explicitly, but I’m sure he has considered is what it would take for Oracle to become a SaaS/Cloud player.  It would be extremely expensive for a vendor like Oracle to build new SaaS-based apps alongside their current apps.  But Oracle has an ace up its sleeve, namely, the average customer’s willingness to migrate core business applications.  Hint: willingness is very low, considering how painful migrations are.

Over the next decade Oracle will have to balance spending R&D dollars on their current applications (i.e. non SaaS-based) and on new applications designed from the ground for a Cloud/SaaS environment.  What portion of their R&D will Oracle invest in the latter?  Play a game with me.  Imagine Larry et al. trying to explain missing quarterly targets because “we are investing in the right products for 5 yrs from now, that won’t drive substantial revenue anytime soon”.  What would happen to their stock?  A more realistic option is for Oracle to follow a BAU approach with their R&D and products. Then, as SaaS/Cloud really begins to negatively impact revenue, Oracle will acquire SaaS/Cloud vendors.

When this occurs, Oracle will offer significant customer choice.  If a customer isn’t happy with traditional Oracle Apps, and wants to migrate to a SaaS platform, Oracle will have an answer.  The “Customer Choice” card is not a new strategy, I’ve written about it in the past.  It works.  Customers are a lot more nuanced than the black and white, for-vs-against SaaS, open source, maple syrup etc., figures we like to paint.

If you take this thesis to be true, then vendors that win, will have to offer both choices to customers.  Sorry to say, but in these types of games, the incumbent tends to win.  On the other hand, incumbents tend to win via acquisition. Incumbetnts acquire startup competitors that took the different approach to serving the customer.  To me, this seems like a win-win game.

What do you think?

It seems that Cloud computing is already scaling its way down Gartner’s trough of disillusionment?  For those not familiar with the Gartner Hype Cycle, the trough of disillusionment begins right after a technology has hit the “Peak of Inflated Expectations”.

Dan Lyons starts things off by agreeing with Richard Stallman about the risks surrounding cloud computing. Dan says:

“Just think of all the little hooks and Velcro straps a cloud service provider can create to keep you locked in. For one thing, they’ve got your data. But think also of all the business logic, the customized apps created uniquely for you. Just look at what Facebook does to make it extremely painful for users to move. That’s a tiny taste of the cloud.”

Stallman tells the Guardian:

“It’s stupidity. It’s worse than stupidity: it’s a marketing hype campaign….Somebody is saying this is inevitable – and whenever you hear somebody saying that, it’s very likely to be a set of businesses campaigning to make it true.”

The Guardian also has a quote from Larry Ellison on cloud computing:

“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?”

On the other side of the debate is Geir Magnusson:

“I think that notions of privacy and user control aren’t intrinsically at odds with the big spectrum of technologies that are called ‘cloud computing’. Rather, like any other computing technology used by humans, there are options, and we can choose to use and create tech that is secure and open, both in the implementation (as in open source), but maybe more importantly in terms of portability and data freedom, being able to move one’s data to where one chooses.”

Like many other technologies purported to completely reshape the vendor landscape, cloud computing won’t deliver.  However, cloud computing definitely has a role to play in the future of the IT marketplace.  Some applications are well aligned with the cloud.  Others, especially really important business-critical apps, aren’t.  Will this change over time? Maybe, but how many companies still do the majority of their business critical transactions on a mainframe-based system?  Hint, a lot.  Also, as more customers start making noise about data portability and freedom, expect vendors to respond with support for related open standards.

In the end, cloud computing will become a valuable part of every company’s IT strategy.  However, cloud computing simply won’t be the foundation upon which an average company’s IT strategy is built.

What do you think?