A long time ago I came to the conclusion that “independent industry analyst” was an oxymoron. But the willingness to sell independence for cash reached a new low with TDWI’s New SaaS Business Intelligence Portal. Please visit the link and see if there is any trace of independence left…
Will Moore’s law find it’s way to the cloud?
In cloud on October 27, 2009 at 9:28 amMoore’s Law states that computer system performance/price ratio will double every two years. And that was very much my expectation when GoodData started using Amazon Web Services almost 2 years ago. But I had to wait until today to see Moore’s Law at work: Amazon announced 15% drop of EC2 prices. The price of the small Linux instance was constant at $0.10 per hour for the last two years – now it will be $0.085.
15% in 2 years – not exactly the exponential growth in the performance/price curve that I expected. And I started to wonder why. Here are my two explanations – I believe the second one is more likely:
- AWS prices were set way too low to attract developers two years ago. Moore’s Law helped the price to catch up with the real cost of running the cloud.
- AWS is a monopoly and Moore’s Law does not apply.
What? Cloud and monopoly? Isn’t utility computing a perfect example of fiercely competitive commodity where the price curve is shaped only by demand/supply? What would Nick Carr say? Unfortunately not. As much as we read about different cloud providers, AWS is the only real provider of “infrastructure as a service” in town. If you don’t want to be locked-in to proprietary Python or .Net libraries there is not that much choice.
Until we will see performance/price of AWS double every two years, we should still wonder about monopolistic pricing.
Please Don’t Let the Cloud Ruin SaaS
In BI, SaaS, cloud on October 1, 2009 at 2:49 pmBack in the old good days of enterprise software, we did not need to worry about our customers. We delivered bits on DVDs – it was up to the customers to struggle with installation, integration, management, customization and other aspects of software operations. We collected all the cash upfront, took another 25% in annual maintenance. Throwing software over the wall … that’s how we did it. Sometimes almost literally…
I now live in the SaaS world. My customers only pay us if we deliver a service level consistent with our SLAs. We are responsible for deployment, security, upgrades and so on. We operate software for our customers and we deliver it as service.
But there now seems to be a new way how to “throw software over the wall” again. Many software companies have repackaged their software as Amazon Machine Image (AMI) and relabeled them as SaaS or Cloud Computing. It’s so simple, it’s so clever: Dear customer, here is the image of our database, server, analytical engine, ETL tool, integration bus, dashboard etc. All you need it is go to AWS, get an account and start those AMIs. Scaling, integration, upgrades is your worry again. Welcome back to the world of enterprise software…
AMI is the new DVD and this approach to cloud computing is the worst thing that could happen to SaaS. And SaaS in my vocabulary is still Software as a Service…
