No, cloud CANNOT be sold like a barrel of oil

Oil Drums

It seems every year the word commodity appears when discussing cloud computing.  Yet we are seeing the dominance of Amazon, the emergence of Microsoft Azure as a strong contender. Google’s deep pockets & architecture keep them a credible competitor. None of these players is playing a commodity game despite regularly trumpeting price cuts.

Price cuts are the inverse side of Moore’s Law: instead of trumpeting number of transistors, they trumpet the reduced cost of the compute unit.

So reading this article from GigaOm, “Yes, IT can be sold like a barrel of oil (but it’s going to take some work)“, reminds me that commodity dreams die hard.

Choice quote:

Big companies use commodity contracts to ensure predictable prices for oil, wheat, electricity, metal and other crucial supplies that keep their businesses going. These days, a crucial supply for many companies is cloud computing power — raising the question of whether that too can be bought and traded in the same way as oil or oranges.

A recent partnership suggests the answer is yes, and that we’re heading to a world where companies won’t just turn to Amazon Web Services or Microsoft Azure for cloud services, but to a commodities market that offers the best price, on the spot or in the future, for a range of interchangeable IT infrastructure.

I strongly disagree this is likely in the foreseeable future (3-6 years). Yes there will be price competition but that’s normal.

I wrote about why I don’t believe in this a little over a year ago. Not much has changed.

Here’s the original post where I dismissed brokers: “Brilliant! I Dismiss Service Brokers on Monday. Someone Announces One on Tuesday. Enron Bandwith Exchange Anyone?”

That’s my opinion. Not for the next 3-6 years. And maybe not after that either. But I’m product guy, not a futurist. Just a working class product guy.

Working class CTO

Progressive Working Class Caterer

It’s been a while, but I’m back to blogging.

I’m  naming this new blog Working class CTO because for the last couple of decades that’s been my job and I have a few observations. It’s a job that I have enjoyed and cherished but, one that has always been hard to explain, especially to my neighbors in Oakland.

Exactly, what does a CTO do? Like the cloud, no one really knows. Is it like Netscape’s Jim Barksdale used to say, “An engineering VP without a delivery date” (ouch) or is it fundamentally a kind of marketing job wrapped in the pretension of a vision? Or something else?

Over the last couple of years, I’ve been recruited by some of the biggest names in the industry for cloud CTO jobs.  Each one required a very involved conversation to understand what they were really looking for.

The answers ranged from silly, “You need to know the CAP Theorem” to honest, “We don’t know for sure” to incomplete, “Communicate our vision to the larger market”.  I passed on these opportunities.

They were missing the working class part, making great products. When I asked about team size, product influence, budget the answers were, ahem, interesting. As in the ancient Chinese curse, “May you live in interesting times.”

One  useful learning from my time at Cisco came from interacting and collaborating with several of our CTO’s.  Why several? Very different disparate businesses in different areas require different expertise – there’s no way for a single person to know all industries at the right level.

Some were very technical, some were more business oriented.  All were great communicators of the vision and trends driving their industry segment.

But while that’s cool, I’m a bit different. Back then, I started joking I was a working class CTO to distinguish what I did from those higher up in the hierarchy.

I meant to say, I spent time with my product teams getting into the detailed work of translating strategy and vision into products. The retail-detail, mundane toil of of bending the lathe of vision into facts on the ground.

Followed by working with our marketing team to turn that into compelling value propositions. Getting into the field to help the our sales force get the initial customers for the new innovation.

Doing thirty-four meetings in two weeks in Australia, dodging punches at a Newark train station at 10 pm waiting for my train while german shepherds jump,  sleeping in my suit at a freezing holiday inn 80 miles north of Detroit. That working class CTO job.

This blog will not cover the topics I have covered over the last few years, mainly service catalogs. The old blog remains up; 600+ articles and seems to be useful to a lot of people.

The (new) adventures of a working class CTO begin here.