No cloud in sight!

The conventional wisdom at the beginning of ’09 was that the economic downturn would catapult cloud adoption but that hasn’t quite happened. This post explores trends and possible reasons for the slow adoption as well as what the future may hold.

A lot has been written in the past few days about Cloud Computing adoption based on a survey by ITIC (http://www.itic-corp.com/). At the time of this writing, I haven’t been able to locate a copy of this report or a link with more details online but most articles referencing this survey quote Laura DiDio as saying,

“An overwhelming 85% majority of corporate customers will not implement a private or public cloud computing infrastructure in 2009 because of fears that cloud providers may not be able to adequately secure sensitive corporate data”.

In another part of the country, structure09 had a lot of discussion about Cloud Computing. Moderating a panel of VC’s, Paul Kedrosky asked for a show of hands of VC’s who run their business on the cloud. To quote Liz Gannes,

“Let’s just say the hands did not go flying up”.

Elsewhere, a GigaOM report by George Gilbert and Juergen Urbanski conclude that leading storage vendors are planning their innovation around a three year time frame, expecting adoption of new storage technologies to coincide with emergence from the current recession.

My point of view

In the short term, services that are already “networked” will begin to migrate into the cloud. The migration may begin at the individual and SMB end of the market rather than at the Fortune 100. Email and CRM applications will be the poster-children for this wave.

PMCrunch also lists some SMB ERP solutions that will be in this early wave of migration.

But, this wave will primarily target the provision of application services through a different delivery model (application hosted on a remote server instead of a corporate server).

It will be a while before cloud based office applications (word-processing, spreadsheets, presentations) become mainstream. The issue is not so much security as it is network connectivity. The cloud is useless to a person who is not on the network and until ubiquitous high bandwidth network connectivity is available everywhere, and at an accessible and reasonable cost, the cloud platform will not be able to move forward.

We are beginning to see increased adoption in Broadband WiFi or Cellular Data in the US but the costs are still too high and service is still insufficient. Just ask anyone who has tried to get online at one of the many airports and hotels in the US.

Gartner highlights five key attributes of Cloud Computing.

  1. Uses Internet Technologies
  2. Service Based
  3. Metered by Use
  4. Shared
  5. Scalable and Elastic

Note that I have re-ordered them into what I believe is the order in which cloud adoption will progress. The early adoption will be in applications that “Uses Internet Technologies” and “Service Based” and the last will be “Scalable and Elastic”.

As stated above, the early adopters will deploy applications with a clearly defined and “static” set of deliverables in areas that currently require the user to have network connectivity (i.e. do no worse than current, change the application delivery model from in-house to hosted). In parallel, corporations will begin to deploy private clouds for use within their firewalls.

As high bandwidth connectivity is more easily available adoption will increase, currently I think that is the real limitation.

Data Security will be built along the way, as will best practices on things like Escrow and mechanisms to migrate from one service provider to another.

Two other things that could kick cloud adoption into high gear are

  1. the delivery of a cloud platform from a company like Akamai (why hasn’t this happened yet?)
  2. a mechanism that would allow applications to scale based on load and use the right amount of cloud resource. Applications like web servers can scale based on client demand but this isn’t (yet) the case with other downstream services like databases or mail servers.

That’s my point of view, and I’d love to hear yours especially in the area of companies that are addressing the problem of providing a cloud user the ability to migrate from one provider to another, or mechanisms to dynamically scale services like databases and mail servers.

What’s next in tech? Boston, June 25th 2009

Recap of “What’s next in Tech”, Boston, June 25th 2009

What’s next in tech: Exploring the Growth Opportunities of 2009 and Beyond, June 25th 2009.

Scott Kirsner moderated two panels during the event; the first with three Veture Capitalists and the second with five entrepreneurs.

The first panel consisted of:

– Michael Greeley, General Partner, Flybridge Capital Partners

– Bijan Sabet, General Partner, Spark Capital

– Neil Sequiera, Managing Director, General Catalyst Partners

The second panel consisted of:

– Mike Dornbrook, COO, Harmonix Music Systems (makers of “Rock Band”)

– Helen Greiner, co-founder of iRobot Corp. and founder of The Droid Works

– Brian Halligan, social media expert and CEO of HubSpot

– Tim Healy, CEO of EnerNOC

– Ellen Rubin, Founder & VP/Product of CloudSwitch

Those who asked questions got a copy of Dan Bricklin’s book, Bricklin on Technology. There was also a DVD of some other book (I don’t know what it was) that was being given away.

Show of hands at the beginning was that 100% of the people were optimistic about the recovery and the future. Nice discussion though after leaving the session, I don’t get the feeling that anyone addressed the question “What’s next in tech” head on. Most of the conversation was about what has happened in tech and a lot of discussion about Twitter and Facebook. There were a lot of questions to the panel from the audience about what their companies were doing to help young entrepreneurs.And for an audience that was supposed to contain people interested in “what’s next”, no one wanted the DVD of the book, everyone wanted the paper copies. Hmm …

There has been a lot of interesting discussion about the topic and the event. One that caught my eye was Larry Cheng’s blog.

How many outstanding Shares in a start-up

Finding the number of outstanding shares in a start-up.

This question has come up quite often, most recently when I was having lunch with some co-workers last week.

While evaluating an offer at a start-up have you wondered whether your 10,000 shares was a significant chunk of money or a drop in the ocean?

Have you ever wondered how many shares are outstanding in a start-up you heard about?

This is a non-issue for a public company, the number of outstanding shares is a matter of public record. But not all start-up’s want to share this information with you.

I can’t say this for every state in the union but in MA, you can get a pretty good idea by looking at the Annual Report that every organization is required to file. It won’t be current information, the best you can do is get the most recent annual information and that means you can’t know anything about a very new company, but it is information that I would have liked to have had on some occasions in the past.

The link to search the Corporate Database is http://corp.sec.state.ma.us/corp/corpsearch/corpsearchinput.asp

Enter the name of the company and scroll to the bottom where you see a box that allows you to choose “Annual Reports”. Click that and you can read a recent Annual Report which will have the information you need.

If you find that this doesn’t work or is incomplete, please post your comments here. I’m sure others will appreciate the information.

And if you have information about other states, that is most welcome.