Peter Christy

Google Wave

The announcement at Google I/O that made the biggest waves was Wave — a provocatively interesting collaboration tool. Wave consists of a Cloud component — the distributed infrastructure that enables a worldwide set of collaborators to share a structured document (the "Wave") and a client component that actually provides the collaboration tool. It's really important to understand that Wave is not a demonstration why the Cloud obviates the need for a PC. The Wave client is implemented as a "browser" application (part of the Windows/HTML5  debate discussed briefly in the last issue). Wave wouldn't be interesting without the part that runs on your laptop. The most interesting criticism of Wave has come from Ray Ozzie. His comments at the Churchill Club were very thoughtful — if anyone appreciates a clever collaboration application it's Ray since he's been building them since college. His point is for most purposes Wave is overkill and much more complex than needed, comparing Wave to Live Mesh and its precursors Groove and Lotus Notes. We run our business on Groove, and Ray is right — for 99% of what we do Groove is sufficient.  In Live Mesh, Ray has pared down the complexity of Groove enormously because it assumes that the heavy lifting is done by Cloud services (permitting the client footprint to be smaller). To implement Microsoft's desktop/phone/Cloud integrated vision Live Mesh is much more suitable than Wave, no doubt. And there is every reason to believe that the Cloud part of Wave could be implemented in Azure and the client component in Windows far easier than in HTML5. This does not distract from the fact that Wave is one of the best examples of a "killer" Cloud app — something that will deliver real value (Ozzie's question is the breadth of the use cases compared to those that Groove or Live Mesh enable) and that absolutely could not have been developed without the integrating Cloud collaboration services.

Flashes into the Google Kimono

Google is very cryptic about everything (excessively if you ask us) creating an environment not unlike celebrity watching where a table napkin used by Julia Roberts would be a revered souvenir.   There have been a couple of Google disclosures in the last few months that are really interesting. First, in April, Google held a meeting to tell IT leaders about their power and carbon practices. Google has achieved amazing power utilization efficiency (the percentage of power that actually goes to running the IT) and continues to improve with fascinating innovation. One source of power inefficiency is battery backup, since many data center designs create battery voltage and then reconvert to data center voltage. The Google design puts a little backup battery on each server as a smart (from a systems point of view) but intuitively unexpected solution. Google authored a book (The Data Center as a Computer) that by their direction is available as a free PDF for download. It provides more insights into the design and operation of large data centers. If you want one of Larry Page's napkins you'll have to look on eBay.

Cloud Wisdom

The Structure 09 panel of successful Cloud practitioners (all the right places and people) had some real insight. Last year the key takeaway was scalability — if you didn't know how you were going to scale it would certainly kill you if you started to succeed. The wisdom this year was at a higher level, and the first part might be summarized by (a) think at the system level, (b) think probabilistically (bad things happen rarely but frequency with large numbers) and (c) it's really useful to own your own stack and be able to make everything work well together (this all speaks well to the Cisco UCS value proposition but that's a longer story). The second part was that humans are still the key to effective solutions and the ultimate cause of most problems (that was the Google perspective after 10 years and maniacal focus on tools and automation!). The broader wisdom at the meeting was that it really is mostly about virtualization (as a key enabler of pre-existing concepts) and utility computing, and it all makes sense if we stop elevating "Cloud" to something new and magical (as we here at IRG have concluded as well).

The Cloud for the Rest of the World

One of the most interesting talks at Structure 09 was by our old IBM friend Willy Chiu. We first met Willy when he did performance work related to WebSphere and then talked to him as he built their high-performance test labs to help customers with large Web applications. For the last few years he has been driving the construction and use of large Cloud labs around the world.  What Willy talked about at S09 was some of the really interesting use cases he's discovered "elsewhere" (not the  high-tech, geeky focus that dominates much of the Cloud dialog). These are really interesting. Suppose you are a country like Vietnam that wants to invest in industry development. The Cloud (and we would add wireless communication) is complete game changing. A government or economic development agency can put in a modest (by Google or Amazon comparison for sure) Cloud data center and quickly create on-demand infrastructure to use (this is analogous to the use of Amazon by startups today except startups are a very small part of the US IT economy but could be the dominating part of a development economy).  This not only provides a lot of painless infrastructure, removing from entrepreneurs the task of buying, installing, connecting and running their own computers, but also lets the government provide standard solutions or stacks further reducing the IT knowledge needed to use IT. Maybe we've all been looking in the wrong place for where the Cloud will take off. The implications are broad. If this vision is right then the issue isn't the trickiness needed to enable the construction of the next Twitter, Facebook or Wave — the focus is how to make the basics really easy to use for what we would think of as completely boring (but certainly green field) applications.

Clouds and CDN's

As long time CDN followers we're fascinated by the question of how to get the best performance out of Cloud applications. This certainly includes incorporating traditional CDN capabilities (such as edge caching) but the more interesting question to us is what a higher level platform (Azure for example) can do to achieve the performance without requiring the programmer to understand the issues or CDN's. We know the Azure team is thinking about this (MS has built out an internal CDN for many separate reasons) but so far they haven't given many details. At Structure 09, CDN's were often discussed, but in a somewhat confusing way. Paul Sagan, President and CEO of Akamai, gave one of the more coherent business presentations focusing on the high level benefits of Cloud computing (e.g., energy efficiency) and then the role CDN's must play making Cloud applications high performance.  Many of the big Cloud guys talked about CDN's too, but what they said was that CDN's had become commodity technology, and although they all believed in the value of edge caching (and internal caching for that matter) most just rolled their own and/or happily played the leading vendors off against each other. We think that the question becomes simpler and clearer if one views "private Clouds" as what people are doing with virtualization in private, consolidated data centers. For these many customers rolling your own CDN isn't an option, and we think that these utility data centers will be more important than public clouds (economically) for a long time to come.

Best Joke at Structure 09

In his fireside chat, Marc Benioff kept using the term aZUNE to refer to Microsoft's Cloud Platform. You have to wonder if the naming mavens thought of this when they picked Azure? The second best joke was when the Google guys were pointing at interesting things Google had published and kept saying "if you ‘Bing' for it you will find it." There were lots of Cloud puns but generally you "had to be there." BTW, Azure was delightfully well represented at the meeting and on the side reported that they are on track for announcing pricing this summer and a commercial release by the end of year (what they said at the STB analyst meeting as well). Remember that Azure isn't competing with Amazon (selling raw VM's). The MS goal is to provide the preferred Cloud solution for their 3MM developers and 400,000 business partners. So far they are on the path of under committing and over delivering, and letting the market tell them what they should focus on next.

Cloud Squeezing

The VC panel at Structure 09 was quite interesting, as was the case last year. There was uniform reticence about investing much in capital expensive infrastructure: one VC said that when someone comes in with a pitch on how they will be more cost effective than Amazon they just laugh. This evolved into a deeper discussion on the problem that it poses for investing in valuable infrastructure management software and systems as well. There is growing appreciation that it makes sense to learn in large Cloud environments and use that learning to design products for the broader market (this is Microsoft's System Center strategy for example) which makes the larger Cloud providers very interesting early customers to serve.  However a very large fly in the ointment comes from the Amazon business model:  Bezos is a retailer, and like all successful retailers, is very good at cost minimization. As he tells his investors, the good part of having a low profit margin is the large barrier to entry it creates for smaller competitors given Amazon's experience and economies of scale. As an expected consequence, Amazon, like WalMart, is very good at squeezing suppliers, including software suppliers. Google proudly pays no software license fees on their 2MM servers, and Amazon clearly pays as little as possible. So if you hoping to make good money selling innovative stuff to Amazon and learn from the experience (or any other large Cloud provider) think again.

A Tale of Two Forecasts

In the last few months, Cisco and EMC both published their latest forecast for the growing digital universe.  They couldn't be more different in nature.  The Cisco forecast (the continuing focus of Arielle Sumits and others) represents Cisco's best effort to absorb the many public and private bandwidth forecasts they have access to, and to synthesize that all into an integrated whole. It's hard work, and always a work in progress, but an incredibly valuable contribution for the rest of us. Cisco has always been willing to entertain discussions on the methodology and data which in turn have provided additional valuable insight.  EMC republishes an IDC White Paper they sponsored.  There is no stated methodology. The data is from other IDC reports that they are happy to sell you but don't share with EMC or us. EMC has no ability to discuss the content or to validate the study. Guess which one we like better.

Cisco Reorgs Development (again)

If John Chambers has a flaw it might be executive development and succession planning. Cisco management is undoubtedly a meritocracy (you don't get promoted without hard work and success) and has nurtured a continuing string of strong leaders, many of whom however left when they got near the top. This leadership "fluidity" could be an asset (moves people around, enable upward growth even in a non-growing organization), and Chambers increasingly depends on virtual and dynamic management structures ("councils" and "boards"). Nonetheless in our experience every time there is a reorg a lot of effort goes into learning about your new boss and positioning yourself in the new organization at the cost of business.  There were some clear "winners" in the reorg: as the number of members of the Development Council (there is no head of development) was roughly halved, Marthin De Beer who runs Emerging Technology (small in revenue and size) is one of the survivors and clearly favored. Don Proctor‘s top level software organization was a clear loser (the constituent groups were moved back into other organizations -- so much for software as a top level focus). Kathy Hill‘s rapid ascendency seems to have stopped. Other than the end to the brief life of a software organization and the continuing importance of video we're not sure what to read into all of this — maybe we need to sacrifice a goat and read the entrails.

Mu on Microsoft STB Challenges

OK, I have to admit that I'm a shameless Mu (Bob Muglia) fan boy. I first met Bob when he was the product manager for Windows NT very early on. For me, the high point of the Microsoft STB (Server and Tools Business) analyst meeting is a chance to hear what's on Mu's mind. In the Q&A session I asked him what he thought the greatest STB competitive challenges were and as expected he had a very interesting answer. He said the biggest challenge was to explain to Microsoft customers what STB was doing and why it is valuable. For years I've been ragging on MS about this (e.g., how to explain the value proposition for Oslo). Mu has taken a very interesting approach to solving this problem. He's plucked Robert Wahbe from running the Connected Systems Division part of STB (the team that has done a lot of the .NET technology and more recently Oslo) to be the head of marketing for STB. Robert really understands the stuff, no doubt.  With this move Mu will either make a quantum improvement to this marketing problem or unintentionally have shot one of his best technical leaders — I'm rooting for the former! The second answer was also delightfully unexpected. He talked about Oracle and Larry's acquisition of Sun. It's hard not to respect Ellison as a business leader. His acquisitions aren't as pleasant as Cisco's but the track record is great. No one I've talked to yet as a strong insight of what Larry has in mind, but Mu for one is keeping is eyes peeled. If you think you know the answer, dear reader, we'll buy you a coffee and help you spill your guts!