Cloud computing will lead to super monopoly experts questioning business models

At the moment, PCs are still the core tool in our day-to-day life-we use PCs to process documents, store data, and share information with others via email or u disk. If the PC hard drive is broken, we will be stranded because of data loss. In the "Cloud computing" era, the cloud will do the work of storing and computing for us. "Cloud" is the computer group, each group includes hundreds of thousands of units, and even millions of computers. The benefit of the cloud is that the computer can be updated at any time to ensure that the cloud is immortal. Google has several such "clouds", and other IT giants, such as Microsoft, Yahoo and Amazon, have or are building such "clouds". At that time, we only need a computer to be able to access the Internet, do not need to care about the storage or calculation of which "cloud", but once necessary, we can use any equipment, such as computers, mobile phones, to quickly calculate and find this information. We don't have to worry about losing data any more.

At a news conference on March 17, Schmidt made a figurative analogy. "Cloud computing," he said, "is like a bank ATM, and we don't have to carry a lot of cash out of the house, and we can get it anytime we want." Kusheme, Google's engineer, argues that the PC era is like everyone needs to use electricity to buy their own generators, while in the "cloud computing" era, everyone does not have to have generators to buy electricity directly from large power plants. "Cloud computing" is not really a new concept. According to Kusheme, "cloud computing" before, there are "grid computing" (grid Computing) and so on, the idea is about how the computer together to play a role. More than 10 years ago, when she was a graduate student, she knew the concepts, but the problem was that these concepts had never been well realized.

After Kusheme joined Google, she found that this kind of concept had been practiced. Google's technology allows hundreds of thousands of of computers to work together to form powerful data centers. Google China CEO Lee Kai-Fu, said in an interview with Caijing reporter that Google's real competitiveness lies in these "clouds", they let Google have the unmatched ability to store and compute global data. At the beginning of its creation, Google did not deliberately pursue concepts such as "cloud computing" and "Lattice computing". But as a search engine, Google needs these "clouds" objectively. In fact, Yahoo's search also uses "cloud computing". Cloud computing is a new way of sharing infrastructure that can connect huge system pools together to provide a wide range of IT services. Many factors drive the need for such environments, including connectivity devices, real-time data streams, adoption of SOA, and rapid growth in WEB 2.0 applications such as search, open collaboration, social networking, and mobile commerce. In addition, the improvement of the performance of digital components has greatly increased the size of the IT environment, thus further strengthening the need for a unified cloud management.

A few months ago Hugh MacLeod's blog article, "The Amazing Secrets of cloud computing", caused a discussion. Hugh thinks: Cloud computing can lead to super monopoly. A few weeks ago Larry Ellison the opposite view, saying that Salesforce.com is hard to make a profit and that no one is making too much money on cloud computing.

In this article I will explain why Ellison is right, and why Ellison is dangerous in terms of Oracle Company's future strategy.

First look at Hugh MacLeod's point of view:

...... No one notices the power law. Nobody thought that one day a company would rule the cloud, just like Google's search business, Microsoft's dominant software.

Can you imagine a company other than a monopoly? We're not talking about a billions of-dollar business like today's Microsoft or Google. These businesses are dwarfed by what we are talking about. This could be trillions of of the company. It could be the biggest business ever.

I think a lot of my friends who work in these companies know this and how much money they have.

Who's going to have a relationship between windows and Apple? There are bigger things ... Its immense extent seems to be kept secret by everyone, at least for outsiders like me.

The problem with this analysis is that it does not take into account the causes of the online domain power law. The Web 2.0 core I'm talking about is to understand the dynamics of incremental returns on the Web. Ultimately, on the web, if an application is more effective, the better it will be. As I pointed out in 2005, Google, Amazon, ebay, Craigslist, wikipedia, and other Web 2.0 superstar companies have this feature.

Hugh seems to use cloud computing as a synonym for infrastructure like Amazon S3 and EC2, at least in the sense that cloud computing does not. (later on more types of cloud computing.) )

Of course, large companies have economies of scale in terms of cost, especially in terms of power costs, which cannot be done for small businesses. But now there are a few such big companies Google, Microsoft, Amazon, large enough, some involved in the cloud, some did not. More importantly, economies of scale do not equate to the continuing rewards of user-network effects. Scale economy is the characteristic of mass commodity market, this field has no huge lever effect to the final victor.

Since I'm listening to others, I'm not sure about the accuracy of the message, but it does come from an important source of information: Jeff Bezos said he would welcome Google and Microsoft to compete in the cloud because they would subsidize cloud computing services from other businesses, Amazon always benefits from it. "We are better than the mass goods business," said Jeff, and the facts prove it.

If cloud computing is a mass commodity business, there will be no huge profit Hugh. The business will be big but profitable, just like the virtual host and ISP market. (Be interested in looking at the Racksspace figures.) )

But because one of radar's goals is to help people think about the future, I'll take a moment to talk about the future and strategy of a super monopoly that might turn cloud computing into Hugh.