Saturday, April 25, 2009

2009 - Watershed Year

There are events in life, and in business, that bring dramatic changes that echo for years.

The "Dot Com" boom and "Dot Bomb" burst is such an event. Everyone who was in business then felt it.

This current recession is another such event. Not just because sales are down for many people and will go back up when it's over.

There are several rivers of change that are all coming together at once. I believe this recession will be seen as a trigger that forced many other changes to take place all at once rather than waiting to happen naturally.

It's a fact in politics, society, and business that there are certain triggering events that lead to massive changes in many areas.

In "normal" times, people have ideas, start working on them, build prototypes, get money together, and try to sell their stuff. Sometimes they have visions for change.

But when a major event occurs, many of these normal people and businesses see it as an opportunity to push much faster changes in their operations. They wait for just the right moment to push change.

And if the triggering event is big enough, then lots and lots of people push bigger and bigger changes all at once.

At the same time, there are businesses that "survive" by responding to the changes around them. At the small end of the scale, this might mean reducing inventories. Or changing processes to run a leaner operation. From a larger perspective, thousands of individual companies cutting back and running leaner has a massive effect on overall market environment.

When this kind of disruption goes on for a couple of years, everyone is affected.

And when spending starts up again (you can only be super-lean for so long), businesses will NOT buy what they were buying two or three years before. They'll buy into newer offerings that make them future-proof.

When the period of change settles down, there's a new normal. The big winners before the change are not likely to be the big winners after the change -- unless they worked to formulate the future.

- - - - -

When I look around, I can't see the future. But I can see people and organizations that represent the future.

My friend Erick Simpson sent me a copy of a great book: The Big Switch by Nicholas Carr. Read it.

There's a new world of computing coming. And it's coming pretty fast.

In this world, computers as we know them will become very rare. After all, most companies don't even need real computers today. They are just used to the way things used to be.

If your clients store their data at an online service, use hosted Exchange, hosted QuickBooks, and, then they don't really need computers.

Really. If you sold them a thin client with Windows CE, they would have Internet Explorer and could do everything they need to do.

Imagine an office filled with thin clients and no servers. They exist today.

And what's the maintenance on thin clients? Zero. They cost $250 to replace. Why would you fix them?

Where does that leave you in the future? Will you be the "trusted advisor" telling your clients to stay in the 20th Century? Or will you help them move to their inevitable future?

Karl's Patented Three-Cloud Theory

For a taste of what your future looks like, consider this. Appliances will be everywhere. Online services (connect to the Internet and it's there) will be ubiquitous. Computers will be replaced by appliances. I can foresee an Exchange appliance, a SQL appliance, a SharePoint appliance, etc.

Most clients will experience thin clients on their desktops and a monitor. Period.

Line of Business applications are moving to the cloud. A few dinosaurs will put this off as long as they can. But they're going to either learn how to do it or find that their quick and nimble competition has figured it out and taken their customers.

So one "cloud" is out on the Internet.
- Your opportunities are 1) Make money helping clients find the right services; or 2) Make money selling someone else's service. Your highest skill set will be consulting

But let's say that you're just as interested in the deep technical dive as you are in the consulting side of business. You can build your own systems. You can host Exchange and SharePoint. You can create virtual desktops. You can backup client data to your colo facility.

Many clients with sensitive data are not ready to dump it all out "there somewhere" on a cloud. But they might be very willing to have their systems hosted on your servers. So your company will have a small-size cloud for your clients. You will be a regional utility company in the age of utility computing.

So a second "cloud" will be one you build and manage.
- Your opportunities are to provide hosting services and opportunities from the colo to the so-called desktop. Services will be designed specifically for you to generate revenues in this environment. You will need a high skill set to maintain and manage the servers and services you offer.

But what about those die-hard clients who just want to touch and see and feel their data? Well, with services like the BoxOffice from Zenith Infotech, your client can have his own little cloud in his own office. One or two devices will house all the servers and all the workstations, plus the backup (pushed off site to your colo). Thin clients will deliver computing to the desktop.

So the third "cloud" will be a tiny client-owned cloud.
- Your opportunities are to manage all the stuff at the client's office, but 98% of it can be done remotely.

Just be aware that last option is just a transition to the next phase.

There will always be a few wild clients living "off the grid" in Idaho, using bio-diesel generators to run their own servers.

But just like electricity, essentially everyone will get their computing power from large computing utilities (Microsoft, Google, etc.) or the local/regional computing utilities (potentially you).

- - - - -

Things to consider:

- Imagine how scared Ingram Micro and Synnex are about the prospect of massive cloud computing and utility computing. When 90% of today's computers are gone, who will buy equipment? Big companies that buy direct.

- If servers get replaced every 3-4 years and the last of the current generation will go in this year and next, that means our current model of computing will be gone by 2014. You'll have stragglers and specialty computers. But everything else will be gone.

- This all requires serious bandwidth at reasonable prices. We've been getting there very slowly in the U.S. Within five years we should be there.

- At the client end of things, consultants (advisors) will get premium salaries. Why? Because you have to get this right or the client is screwed. At the client end of things, appliance repairmen will either be commodity jobs (see refrigerator repair) or non-existent (see DVR repair).

- It's also possible that this watershed will take a chunk of clients, or a few businesses, but that we need to wait for some other significant social event to sweep the rest of the world into utility computing. So you may get an additional five year delay in there somewhere.

But don't think for a minute that you can avoid the future.

Just a few thoughts to lighten your day.


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1 comment:

  1. Stuart Crawford added a bit to this discussion as well:

    "Here is the next generation of cloud based computing...not 100% cloud based but disruptive to the Telco's"


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