Imagine a technology that promises to revolutionize the way a whole sector works. It will make what we do now cheaper and more scalable, and it will enable new capabilities across a wide spectrum of technologies. It will disrupt and revolutionize the way the industry does everything, although nobody is quite sure exactly how it all will really play out. Everyone wants a piece of it, from large existing corporations all the way to one person basement startups, and it seems as if each one thinks the opportunities are boundless and unplundered. Whatever happens, the technology is real and important and change really is on the way. That might describe cloud computing today, but it also described where VoIP was 5 years ago in early 2004. If we look at what happened to VoIP, can we intuit anything about what might happen to the cloud? Here are a few thoughts on the matter.
Winners, losers, and survivors - In the battles over VoIP it is hard to dispute that the cable MSOs won, they went from near zero to many millions of subscribers in the US, gaining revenue and profits on the way. Skype and a few others like Packet8 survived, perhaps not in the form they once dreamed but still in decent shape. The rest of independent VoIP guys lost, whereas the ILECs are still bleeding wireline customers and it won't stop any time soon - they're just so big that it's merely a flesh wound and they can fight back on other fronts like wireless and FTTH. But why did the cables win? Simply because they had a) nothing to defend, and b) an existing relationship with all the customers. No amount of cool technology by the upstarts or defensive maneuvers from the incumbents could overcome those basic strategic advantages. It just didn't matter that they were slower and less imaginative. Amongst the cloud computing field, who is it that serves the customers already and has no flank to defend?
New markets versus old markets - Skype may not have conquered the world yet, but they survived and even thrived by most measures. Why? Because they took VoIP and used it to build a new market of their own. Yes, they compete against the field for long distance, but by and large the voice minutes they generated were not taken from others - they were new. They used the technology and the buzz to expand the pie rather than to fight over pieces other people were eating. So in the cloud, who is using the technology to open new markets and who is trying to supplant old ones?
Looking ahead versus looking too far ahead - Perhaps the biggest unfulfilled dream of VoIP is the missing technological singularity. It was supposed to enable us to transcend mere phone calls, to open new doors of communication, to integrate with everything. There are certainly a few cool items out there and VoIP is still changing the industry every day, but in the macro sense all that really changed in 5 years was that long distance and international calling got much cheaper. Like VoIP, the cloud makes promises on two levels: 1) it is cheaper and more scalable, and 2) it will liberate technology from current constraints and unleash the true power of the internet for the economy and everyone on the planet. Ok, I waxed on a bit sarcastic there, but my point is that the first is easy, the second always takes one hell of a lot longer than either the media or the engineers or especially the PR guys think it ought to. Five years from now, we will probably still just be looking at cost savings and scalability due to cloud computing. Will we be wondering what happened to the revolution? Or will that be enough?
Such things move in cycles. The new technologies are real, they are important, and they do change the world. But we also tend to overplay them early on and then get disillusioned or just bored later. Cloud computing will probably follow the same pattern, but with a little awareness maybe we can ride the tiger a bit better this time.
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