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Cloud Computing, Data Center, Dynamic Infrastructure, Networking, Virtualization
This post was brought to us by Mark Thiele.
The Dictator is Ruling the House of Information Technology with an Iron Fist
The ENIAC mainframe was introduced in 1946. As the first electronic computer, it was a huge leap forward in how humans got work done. At the times of its invention, the ENIAC was the best way to crunch numbers in the world, yet only a very small and very exclusive group of people had access to it. This is truly the era of the “haves” and “have nots” as far as Information Technology is concerned. Through the subsequent 50 years, we’ve gone through phases of making IT available to a wider audience. In the 70s, most large companies and universities had a mainframe or access to one. However, as a percentage of the business population this was still a pretty exclusive group, who mostly had limited access to a shared resource. In the 80s we began the era of distributed computing. Now pretty much any company or individual with a little cash could have full time access to some level of compute capability, from desktop PCs to mainframes, minis and towers. At this point, while technology access is fairly widespread, barrier to entry is still pretty high. The average cost of a desktop was $2,500 and software and support could add another $1,000. The average mom and pop shop or home computer user couldn’t afford that kind of spend on something that would be used for writing letters or doing the occasional spreadsheet.
Fast forward from the 80s to the year 2000 and the Dictator is now allowing peaceable assembly
By 2000, the relative cost of a PC had dropped to under $1,000 as compared to the late 80′s prices vs. income and inflation. As you might have guessed, this dramatically broadened the accessibility of computing. There is also the little thing called the Internet that came to life between the 80s and 2000. The Internet lowered the barrier to entry by making information and applications available to anyone who could get on the Internet and had a computer or could rent time at an accss point terminal. This combination of yearly decreases in the cost of PCs and wide access to the Internet continues to this day, making it a little bit easier for the average Sue/Joe to take advantage of the benefits of readily available IT tools.
What’s the Problem with This Form of Government
Unfortunately while the pool of “haves” has increased dramatically every decade since the 50’s, there are still a large number of businesses and home users who are still “have nots” or at best “have a little”. There are myriad reasons for this continued disparity of ownership;
- Not everyone has easy access to a broadband connection yet, especially in developing parts of the world. (Like a big portion of the undeveloped world called the US of A)
- In major parts of the world there is no support for owning and using a computer. You couldn’t get the power or the broadband necessary to put it to use
- The big kicker is SOFTWARE! The cost of software has either held steady or increased with inflation over the years, even as every other aspect of technology has decreased markedly.
Cost of Hardware Over Time*
The above graph is relative pricing for computers and peripherals. Generally speaking the price of a PC has dropped roughly 15% per year over the last 12 years.
*Graphic above borrowed from here.
Why is the cost of software still so high and why is that a continued roadblock to wider adoption of Information Technology?
Today we buy software and hardware based on a 100% or 24/7/365 use model. We continue paying for the Oracle license, or for Microsoft Word, regardless of our use characteristics. The average user of any one software package only spends a few minutes or certainly no more than a few hours a day. Paying for 24/7 vs. “paying as you need” means that in most cases we’re paying 5-10x what we really should be paying. How can a 50-person company that is running on a shoestring budget afford world class IT tools if they have to pay for them even when they’re not being used? Imagine if your finance person could log in to Oracle for an hour a day and eight hours on the last day of the month and only pay for their use? A perfect example of where this paradigm is beginning to change is in office productivity tools. As a small business or home user, you can get access (unsupported) to office productivity tools that have most of the features that the comparable Microsoft products do. While the Google option isn’t perfect, it is certainly a giant leap in the right direction towards democratizing IT. Think about all those pirated copies of MS Office that get spread around. True, it’s a shame that they aren’t being paid for, but it’s probably also true that most of those copies would never have been purchased anyway. Things are pirated for a reason and in many cases it is because the buyer would never be able to justify ownership at full price.
A Small Sampling of the Per License Cost of Some Common Software Packages Over Time
|Year||Price approx in $US||Year||Price approx in $US||Percent increase change|
The advent of the cloud is no smaller an opportunity for global business and change then the introduction of the Internet. We haven’t begun to understand what new businesses will be created and what business models will change as a result of the widespread access to cloud-based IT services. However, this change won’t happen by accident. There are still many evil-doers out there who are attempting to derail our train to democracy.
I don’t want to play the name game, but I will say that many of the biggest IT vendors in the market are working very hard to make the cloud business as usual. They’re looking to maintain their margins and lock in their customers. This effort is completely contrary to many of the benefits that should be assumed as part of using or implementing cloud services.
Be very wary of big IT vendors bearing gifts of “cloud” solutions, “best” hardware platforms, and long contracts.
By its very definition, cloud is a “pay as you need it” IT model. If you’re getting locked into long contracts and you’re still making hardware purchases, you’re heading down the wrong road. Cloud has created a model that should remove the final barriers to a truly democratized IT model. A small business owner should be able to buy the service they need, in the quantity they need. They should also be able to buy a package of IT services that allows them to mimic much larger organizations. The home user or the user in the undeveloped countries should be able to access technologies and solutions through the phone, or similar handheld devices and they should only have to pay for what they use. Maybe an engineering student could really use a tool like Visio, but really only needs it for an hour a day during one semester. Instead of paying $500 for a copy that will rot on his/her computer, they can pay $10 a month for the access period that they need. This same opportunity is true for the world over. Anyone with even the most basic of access can now work with and experience the benefits of information technology. This “equal access” to IT creates a democratic world, which allows each of us to succeed or fail on our own terms.
Why Democratic IT Equals Amazing Opportunity
Like the micro loan programs being employed in India brought opportunity to the unserved masses, cloud can bring tools and technology to a whole new set of customers who would otherwise have been denied. Cloud also has the potential to provide a much richer application landscape, giving businesses and home users capabilities that have historically only been available to large enterprises.