What are the unanticipated consequences of Cloud Computing – Part II

October 29, 2009

What are the unanticipated consequences of Cloud Computing – Part II

As I was pointing out yesterday, there are many unintended consequences from any emerging technology platform — the cloud will be no exception. So, here are my next three picks for unintended consequences from the evolution of cloud computing:

4. The cloud will disrupt traditional computing sales models. I think that Larry Ellison is right to rant about Cloud Computing. He is clearly aware that if cloud computing becomes the preferred way for customers to purchase software the traditional model of paying maintenance on applications will change dramatically.  Clearly,  vendors can simply roll in the maintenance stream into the per user per month pricing. However, as I pointed out in Part I, prices will inevitably go down as competition for customers expands. There there will come a time when the vast sums of money collected to maintain software versions will seem a bit old fashioned.  old fashioned wagonIn fact, that will be one of the most important unintended consequences and will have a very disruptive effect on the economic models of computing. It has the potential to change the power dynamics of the entire hardware and software industries.The winners will be the customers and smart vendors who figure out how to make money without direct maintenance revenue. Like every other unintended consequence there will be new models emerging that will emerge that will make some really cleaver vendors very successful. But don’t ask me what they are. It is just too early to know.

5. The market for managing cloud services will boom. While service management vendors do pretty well today managing data center based systems, the cloud environment will make these vendors king of the hill.  Think about it like this. You are a company that is moving to the cloud. You have seven different software as a service offerings from seven different vendors. You also have a small private cloud that you use to provision critical customer data. You also use a public cloud for some large scale testing. In addition, any new software development is done with a public cloud and then moved into the private cloud when it is completed. Existing workloads like ERP systems and legacy systems of record remain in the data center. All of these components put together are the enterprise computing environment. So, what is the service level of this composite environment? How do you ensure that you are compliant across these environment? Can you ensure security and performance standards? A new generation of products and maybe a new generation of vendors will rake in a lot of cash solving this one.

6. What will processes look like in the cloud. Like data, processes will have to be decoupled from the applications that they are an integral part of the applications of record. Now I don’t expect that we will rip processes out of every system of record. In fact, static systems such as ERP, HR, etc. will have tightly integrated processes. However, the dynamic processes that need to change as the business changes will have to be designed without these constraints. They will become trusted processes — sort of like business services that are codified but can be reconfigured when the business model changes.  This will probably happen anyway with the emergence of Service Oriented Architectures. However, with the flexibility of cloud environment, this trend will accelerate. The need to have independent process and process models may have the potential of creating a brand new market.

I am happy to add more unintended consequences to my top six. Send me your comments and we can start a part III reflecting your ideas.

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About Judith Hurwitz

Judith Hurwitz is an author, speaker and business technology consultant with decades of experience.

  1. Very very usefull info. I think this is a ‘TOP1 Article into Build Link Popularity. Keep going!

  2. If you have a mainframe that runs the Linux operating system and the same middleware as a high end server why isn’t it similar to any high end server? In my view it is not correct to say that clouds do not have a fixed location for its hardware resources. Any cloud data center is a physical computing environment. The newer generation of mainframes may actually be more cost effective in running and managing complex workloads. It avoids some of the complexities inherent in running hundreds or thousands of servers.

  3. How is cloud computing any different then IBM mainframe centric computing model? I don’t believe it is. Hosting data is much better suited to business than owning distributed computing power (networked PCs). Cloud computing is about having a data stream in a place so multiple processes can be employed on it but whoever is hosting doesn’t have the responsibility for it. The mainframe was location-fixed, the cloud isn’t. So I think it’s just mainframes (centralized) that aren’t locality linked.

  4. you bring up a very important issue. There are clearly management issues that have to be addressed. While we might use cloud as a delivery method it should not let anyone off the hook.

  5. Cloud computing raises some very interesting procurement and management challenges:

    Currently, if you want to buy an ERP system you would run a beauty parade of vendors and technically evaluate the system on functionality and performance.

    The cloud changes all this as you can ‘patch’ applications together to support your business processes. But you are moving into an area where you will not have a great degree of control over service delivery.

    As the cloud becomes real new management roles will have to be created and these roles will use new tools.

    Will the Cloud Information Officer be a common title in a few years? Judith mentions service management vendors becoming ‘king of the hill’ – they probably will. Their tools will give the Cloud Information Officer masses of reports on levels of service.

    But, if the service to our end-users fails or the performance is poor, who do we call? The ERP vendor? Whoever is runninng our cloud services? Google?

    Where will accountability lie and how will problems get resolved quickly?

  6. You make a great point! The compound effect will definitely make this interesting.

  7. Hi Judith,
    I think another unintended consequence of the cloud computing will be the compound effect of all the new things that are happening today: cloud computing, social nets, mobile explosion, book and content migration to the e-readers, and so on. All the “parts” do not seem revolutionary when looked upon piece by piece, but taken as a package might bring us to a totally new plane, if you will. For example, awhile ago you wrote about a company that was managing process virtualization as the process was being migrated from one machine to another. Well, that could lead to a system that, as it is being migrated, adjusts itself to new circumstances, such as new device-type or location, programmatically. (I have several other examples in mind 🙂 ). Bottom line, I think the compound effect will be interesting, and will produce another set of unintended consequences.
    Thanks for the article, it’s a good exercise for the mind.
    -Stas Antons

  8. You are right that predictions can be very unreliable. However, I think the cloud will be different — especially as prices come down and there is better software (security, monitoring, compliance, etc.). Remember, we have been talking about utility computing for the last 20 years or so —

  9. Remember the predictions of the world in 2010 when we were kids? We were supposed to have flying cars…. what … nine years ago? Where’s my flying car?

    Cloud Computing will certainly have impacts on business and the IT industry, but nowhere near the impacts that people predict. Changes will be minor, evolutionary, and much slower than people predict. Wholesale migrations to cloud platforms will be slow, and will be stopped dead by high-profile failures as the CFO’s caution their CTO brethren of the risks involved. There will certainly be equally high-profile examples of phenomenally successful cloud-based companies as well. But I doubt we’ll ever see the future being predicted above at the scale being imagined.

    Well, maybe… right about the time my grandkids fire up their first flying Mr. Fusion powered DeLorean.


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