In planning for last Wednesday’s Structure 08 conference, we at GigaOM had our heads in the cloud. We aimed to draw attention to the resurgence of hardware underlying the various software and web services that consumers and businesses now use, and hoped to define the emerging set of offerings that comprise cloud computing.
That definition is important. But not as important, I realized, as figuring out which business models will win out. Because while everyone wants to push their own definition of cloud computing, at its heart, cloud computing is about moving, storing and delivering data on demand.
After moderating two panels, watching almost all of the speakers and having numerous conversations, I came away with the belief that most people view cloud computing not as access to computing resources, but access to services ranging from application-specific offerings such as Salesforce.com to compute grids like that of GoGrid or EC2. And when it comes to buying into such data services (be they software, a platform, storage or compute time), there are certain questions that need to asked, among them:
How do I get my data into the cloud? Maybe it’s as simple as calling up Salesforce.com, or a bit more complicated, like using an API to tap into EC2, but to use a cloud you’re going to need bandwidth. Whether it’s figuring out how to measure and appropriately charge people for bandwidth as Google is attempting to do with their structured meta data, or contracting with a CDN to lower latency, the delivery of data in and around the cloud represents one of its biggest costs and is subsequently one of the areas that’s ripest for innovation.
What format does that data need to be in? Different clouds work with different software. Some clouds work with Windows and others are only friendly to the LAMP stack. Various people expressed the idea that the industry would divide along the lines of low-margin, general purpose clouds like Amazon Web Services, and high-margin, special-purpose clouds such as Heroku‘s Ruby on Rails testing environment (which is built on AWS). The key is to know what you need from a cloud before investing.
How can I change and move that data? The differing programming languages or operating systems accepted by various clouds are only part of the issue. The still undecided fight will be between proprietary formats such as BigTable and open standards that are truly standard, as in used by many, many developers. It’s a young effort, so there are no set standards yet, but until there are, transferring data kept in the cloud will never be as seamless as the bank analogy pushed by Sun CTO Greg Papadopoulos.
So while I spent most of my time trying to figure out which areas of compute infrastructure can be offered as a service while providing the highest margins or most defensible market share, I should have been keeping my eye on the data, because how providers treat the data will determine how their business models evolve.