Infrastructure is still Where It is at Today

Amazon's "Other" revenue

The official number is not available. But, as the biggest public Cloud infrastructure
provider, it is a topic of intense speculation. Here is a credible analysis: AWS is worth approximately $1 billion with a 100% compound annual growth rate (CAGR).

Step 1 in Rackspace's OpenStack masterplan: Private Edition

As described by Rackspace's CTO, OpenStack is a way for it to offer its Cloud management services. So, it is not a surprise to see Rackspace Cloud: Private Edition being offers through partners such as Equinix, OpsCode, RightScale, Cisco and Dell.

What would be equally interesting to find out is how would be the revenue and workload be shared.

SME is the game

I often have to remind myself that technology too is its own bubble. As compelling as Cloud Cloud could be, it is important to see if the rest of the world sees the same value.

So, it is a good thing to see that BestBuy is responding to competitive pressure by bulking up on the Cloud front. Its plan, according to the report, is to provide a richer offer to its SME customers because its showroom has become a retail extension for retail buyers looking to buy at Amazon. (Gulp! That really sucks for BestBuy.)

New biz-model through the Cloud

Instead of the time honored perpetual seat license of the package software, Cloud promises on-going recurring revenue through subscription to vendors. That is the good news, potentially larger total revenue over time. What is not obvious to me as claimed by the Wharton analysis is that Cloud would enable a more diverse ecosystem with many more smaller players.

It is true that, at its current stage of development, most of the Cloud players are small relative to its on-premise peer and most of them compete by collaborating with other smaller vendors. But, this feels like a transition than a new state of things. After all, there is nothing particularly anti-monopolistic about a subscription biz-model. If anything, it would probably enhances the winner takes all model.


Related entries:

* An estimates on how much revenue AWS is taking in this year http://cloudscaling.com/blog/cloud-computing/amzn-other-revenue-in-2011

* Rackspace Cloud: Private Edition: http://www.datacenterknowledge.com/archives/2011/11/10/rackspace-launches-openstack-private-cloud/

* BestBuy's $167 million Cloud strategy: http://www.fiercetelecom.com/story/cloud-service-acquisitions-gain-momentum-and-everyones-jumping-board/2011-11-09?utm_medium=nl&utm_source=internal

* Cloud's new pricing model: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2872

Jobs is Dead, Long Live Jobs

In Memoriam

Looking for More Distractions?

Google Plus

I am fairly agnostic when it comes to social media. I have tried a good number of them and found most of them wanting in one way or another. Typically, small things that imposes a time tax which, after some good-intention'd efforts, my usage starts to drift.

Hoopla over its growth and its demise (how time flies in the social media scale), aside. I like Google Plus for its open environment instead of being a walled garden. I also like the Twitter like capabilities.

Prometheus Reconsidered on G+

Prometheus Reconsidered now has an open curated stream on G+. It is updated almost daily but features articles that are related to technology, innovation, and business.

Please join the fun: Prometheus Reconsidered on Google Plus.

Office Redefined in the Age of Cloud and Mobile Computing

Not your Daddy's WordStar

Office productivity tools have come a long way from the days of the Wang Labs (assuming you even know what that is in reference to.) MIT's Tech Review has a series of articles on what constitutes an office in today's mobile and cloud computing world. A global and flattening global nature of interaction, ubiquitous and instantanious accessibility, and how to better define and protect data are some of the oft-heard observations.

These observations also lead to some interesting questions.

Roll Up a Flattened World

In a flat and global world, while it is true that people from different corners of the world can be part of the same virtual team, it is also true that virtual team is difficult to manage. Although cloud and mobile computing have made life easier. From a business perspective, how to get a team to perform at a high productivity level remains an art.

In other words, now that people are collaborate across oceans, does mobile and cloud computing offer new opportunities to close the physical distance?

Going Off the Grid

The convergence of mobile and cloud is accidental. For the early cloud folks, the emergence of a touch based device was not expected. Similarly, mobile designers only considered tapping the vast processing and storage power of Cloud as an after-thought. As users become more comfortable using smart mobile devices as the primary "office computer", how to address the productivity needs while offline will become an issue.

Adding more processing and storage on the mobile device can only get you so far. What is not clear is what are the buseinss policy tools. For example, what data can you take offline to protect privacy and security. What if several people are working on the same document, can you take it offline and work on it?

The Rise of the Virtual Office: http://www.technologyreview.com/business/38169/page1/
Tiny, Cloud-Powered Desktops: http://www.technologyreview.com/business/38171/?nlid=nldly&nld=2011-08-04
How to Secure the Virtual Office: http://www.technologyreview.com/business/38170/page1/

Cloud Standards and Watering Holes

Talking about Standards

It is a delicate issue. On one hand, Cloud is still evolving rapidly so participants do not want to commit to a standard in order to avoid a potential VHS vs Beta-like confrontation. On the other, without standards, it is difficult to get the enterprise-class users with the enterprise-class budget to actively engage with Cloud.

For now, a growing number of talking shops have been established each with different focuses.

• ATIS Cloud Services Forum: www.atis.org/cloud/index.asp
• Cloud Security Alliance: cloudsecurityalliance.org
• Cloud Standards Customer Council: cloudstandardscustomercouncil.org
• Distributed Management Task Force (DMTF) Cloud Management Standards: dmtf.org
• IEEE Cloud Computing Standards Study Group: www.computer.org/portal/web/sab/cloud
• Open Datacenter Alliance: www.opendatacenteralliance.org

Meeting Cloudsters

Similarly, a number of industry conferences and regional groups are creating Cloud related activities to both engage with the early adopters and to evangelize Cloud use cases.

• Carrier Cloud Forum (Interop): www.interop.com/lasvegas/conference/carrier-cloud-forum.php
• Cloud Computing World (CeBIT): www.cebit.de/en/about-the-trade-show/programme/highlights/cloud-computing-world
• Cloud Camp: www.cloudcamp.org
• Cloud Connect: www.cloudconnectevent.com
• CTIA Wireless: www.ctiawireless.com/exhibit/index.cfm/cloud-computing-pavilion
• Mobile Cloud Computing Forum: www.mobilecloudcomputingforum.com
• Silicon Valley Cloud Computing Group: www.meetup.com/cloudcomputing

In short, a new eco-system is literally taking shape before our eyes.

Cluster map of Silicon Valley

Anchors

Here is a cursory view of Silicon Valley clusters and their respective anchors circa end of 2010. This follows Prof. Tony E. Smith of the University of Philadelphia's research in identifying that 1/4 mile and 40 miles having specific impact on technology clusters.

Roughly, it goes from hardware in San Jose to social media applications in San Francisco.

The format goes by City: Company name (industry/technology)

North Bay

• San Francisco: Zynga (Social media/gaming, software)
• South San Francisco: Genentech/Roche (Biotech/pharmaceutical)

Pennisula

• Redwood City: Oracle (enterprise software)
• Menlo Park: San Hill Road (VC)
• Pal Alto: Stanford University (R&D)
• Mountain View: Google (Software/search)

South Bay

• Cupertino: Apple (Consumer hardware/software)
• San Jose: Intel/Cisco (Consumer/enterprise hardware)

East Bay

• Fremont: Tesla (Auto/Cleantech)
• Berkeley: University of California Berkeley (R&D)

Disclaimer

The list above is meant to be an illustration of clusters. There are many exceptions with the most glaring one being that Facebook is located in Palo Alto.

The germane point, nonetheless, is that if you want to start up a solar panel company which utilizes semiconductor manufacturing technologies, the natural location is to be near South Bay near where the semiconductor cluster is.

Self-organized clusters

Not a monolithic blob of geeks

One of details about Silicon Valley is how it is self-organized into clusters of technology, not unlike the traditional service clusters in New York or London. Silicon Valley is best think of as a series of circles each anchored by a leader and these overlapping allows easy cross-pollination to create new companies.

Advantage of proximity and diverse clusters

Proximity to critical mass(es) of diverse skill set is a vital part of new idea formation. Having a deep portfolio of ecosystems within a two hour driving radius, it allows for a solid support infrastructure. If you need to file a provisional patent? If you need to set up your VoIP system? If you need to find co-founders? There are plenty of good patent agents, IT administrators, and start-up soul-mates to be found.

With the overlapping technology and industry ecosystems, as people interact with each regularly, general technology diffusion and the likelihood of finding and applying aspects of known technologies/approaches to a new arena are also much higher.

Until fairly recently, many Silicon Valley VC's have opined that part of their success is due to the fact that they never have to drive for more than two hours to source, monitor, and exit their portfolio investments.

A two edged sword

On the other hand, overlapping clusters has its problems given Silicon Valley's at-will employment.

For starter, if your idea or your execution is sub-par, it is easy for people to leave and find a comparable position. Even if your idea is good and your execution above average, sometimes people leave to join a hotter opportunity. For example Google announced in November of 2010 an across the board 10% salary increase because people, so it seemed, was decamping for Facebook. Finally, for the same infrastructural advantage of clusters, people also leave to start their own companies.

High concentration of ethnic groups

What do you speak at home

I was told recently that 50% of kids entering kindergarten in the Mountain View school district (think Google headquarters) do not speak English as the first language. It is not news that Silicon Valley draws in diverse ethnic groups from around the globe. As a matter of fact, it often seems easier to meet somebody from the other side of the world than a person who was born and raised locally.

With fewer native-born American receiving science graduate degrees in recent years, technical conversations tend to have a confluence of Indian, Chinese, or Russian accents. Even for mainly business conversations, rumors about FIFA World Cup usually goes further than gossip on the latest major league baseball slugger.

Ethnic Groupings

Historically, ethnic ties are one of the key ways that helps merchants work across long distance. With high concentration of ethnic groups in Silicon Valley, the same practice holds. For example, Prof. William R. Kerr of Harvard Business School has documented the interplay between innovation and technology diffusion along ethnic lines.

Here is a sampling of some ethnic-oriented groups that are well established in the region.

• Silicon Vikings http://www.siliconvikings.com/
• The Indus Entrepreneurs (TiE) http://www.tie.org/
• Monte Jade Science & Technology Association http://www.montejade.org/

How it works

The fact that one is from Sweden, does not guarantee that members of Silicon Vikings will let you coast. Scandanavian too they may be, but they are smart money first and foremost.

There is nothing particularly unique with a given ethnic affiliation at Silicon Valley. Through common language, cultural, and academic ties, ethic groups allow members to minimize friction and overhead in information exchange and resource sharing. And, if you are lucky, you might find a mentor who have already looked through the same lenses that you are using right now. The primary benefit of this type of relationship is that you can focus on what you are good at to get things moving instead of improving deficiencies in be on mere parity with the mainstream.

Taken as a whole, however, what makes the ethnic groups stand out at Silicon Valley is the depth and breadth they usually cover. As mini-ecosystems in their own right, it is possible to assemble a core team with engineers, business people, and initial funding before striking out onto the larger stage. Therefore, as informal incubators that funnel ideas into the market place, unlike traditional ethnic-oriented organizations that provide "shelter" against the mainstream, ethnic affiliations are an informal but integral part of the Silicon Valley vitality.