Tuesday, March 23, 2010

It’s getting Cloudy, yes – but locally or globally? Three trends arising.

Trend one – Global Cloud services: Cloud Computing means very different things depending on who you’re talking with. Many of the big players are offering services based on clouds. Amazon, SalesForce, Microsoft, Symantec, just to mention few. These have been more or less ‘centralized’ clouds that are offering services ‘from the distance’, mostly US based services. Problem there is not only the bandwidth needed, but also privacy and regulations. Not all the information is granted to move abroad, sometimes by corporate policy but sometimes even by law. Also on individual level, you probably wouldn’t want your pictures, music and private info to be stored into place you don’t know in which country it resides, nor do you know about what the laws in that particular country say about privacy or who’s got access to your data and how they’re protected. I think those huge datacenters in various places globally will be suitable for some of the services when data that has been moved isn’t critical and under any laws or regulations and when the price compared to risks gets more weight on decision making. Compelling factor for those services will be price efficiency since even a smaller customer gets to share the benefits of large scale economics which wouldn’t be achievable for them otherwise.

 Trend two – Local Cloud Services: I think we’re not there yet and it’s not the only path we’re walking either.  I think we will see another trend rising aside. Local cloud services operating in same country as customer, offering localized services with faster bandwidth. Offering services on local language following local laws and regulations. Customers for these locally produced services will be government offices, healthcare, financial and military customers. Also some of the public companies as well. There is a business opportunity for local consumer services as well because of the local language and because of the ease of trusting the local company you know and you can even visit if needed. Something you can’t say about faceless multinational companies operating overseas. These services can be offered by local Telco who already have the datacenters and the connectivity. Since they’re not the best of creating the software and services, maybe this is where the brokering role suites better for them. On the other hand there are many small innovative players that are lacking the capacity to scale into the measures needed to wide scale service offering. There is also a need for third kind of partners needed in this puzzle which have the capability and skills to combine these to, the integrators. So this is the opportunity to bring these players together and create a local brokering business which beats the individual global cloud service providers. Global service providers fit into the picture if they allow the software and services to be ran and the data to be stored at least partly locally – and if they allow localization of their software and services.

Trend three – Cloud service brokering business:  This will be the combining of the global and local cloud services. As always, you won’t be finding everything you need from one service provider, no matter what they say in their advertisement. And in the end you would like to have one service from here and another service from there. But problem with that would be both managing the service contracts, SLAs but also how to use the different user interfaces and different technology needed for each and every service you buy separately. That’s why arising business area will be those who are able to combine these different 3rd party cloud services into the one user interface that scales based on where the user is and what is the device and connection used and what the user needs at that moment. This will create a new kind of service business offering. Just like malls are bringing different offering and shops into one place for consumer to walk in and choose what they need, these service portals will be sort of ‘DigiMalls’. The challenge is will there be a standard APIs that makes it possible to easily combine the present and the future offering. We will also need a payment technology that supports one-to-many micro payments to allow pay-as-you-use cloud service brokering business to arise and grow.

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