In a front page article in the April 6th Wall Street Journal, we’re told that an IBM/Sun merger would result in IBM owning 42% of the $53 billion server hardware market, based on 2008 factory revenue numbers provided by IDC.
With already a third of the market in hand, it hardly seems likely that IBM could be interested in Sun for the hardware. Such a move wouldn’t give IBM much of an edge against close rival HP in the corporate space. Outside of academia and other niches where workloads push performance envelopes to the limit, Sun is just not a big player in corporate computing. The sales figures make that pretty obvious.
Clearly, it’s not about market share – IBM is after something else.
Press pause on that thought for a moment and think about how many times you’ve read about cloud computing recently. Personally, I’ve reached the saturation point, because the word has been commandeered by marketing departments and spun to mean whatever fits a vendor’s product line.
A short history lesson tells us all we need to know about cloud computing. In the 1800′s power generation was the responsibility of those who needed it. Be it steam, water, or electricity, if I had factory with electrical machinery and lights, I had to generate my own power, and if you needed power, so did you. And both of us had the hassles of building, operating, and maintaining a power generation infrastructure which, by the way, was not our core business. Power was necessary to the operation, but it was not the product or service we delivered for profit.
Eventually Edison and Westinghouse figured out how to transmit electricity, and entrepreneurs realized if they could build a Really Big Generator and implement a delivery method, they could sell power to industrial users. The case from the entrepreneurs to business was clear: “Let us worry about the hassles of generating power so you can focus on your core business, and oh by the way, it’s going to cost a lot less than doing it yourself.”
Fast forward to the present…has the light just come on (pun intended)? Cloud computing is nothing more than the name-du-jour for the centralization of computing resources so that they can be delivered as a utility service. Nothing more, nothing less.
So what’s this got to do with IBM? The answer lies in the rest of the electrical power generation story. History shows that small generation companies were indeed started and did successfully deliver power to local business for profit. The model worked, in fact so well that consolidation soon began to take place within the new electric “utility” industry. Those in the business realized that the biggest fish was really going to win big. Moreover, the biggest players early in the game were positioned to be the biggest winners after the first big wave of electrical utility consolidations was complete.
It appears that IBM knows its history and wants to be a big player early in the cloud computing game. Sun is already way ahead of IBM in the race to deliver computing as a utility. Amazon and Google were out there first to be sure, but at this early stage in the cycle there is still plenty of room, and it seems like IBM wants to be an early player – a Very Big early player. IBM may be hoping to paint the clouds in the sky IBM blue in an effort to create a lot of green for its shareholders.
At this point it would not be Al Franken-esque to ask “How does this affect me?”
Like the early days of power generation, most businesses are all still “generating their own power” with their own in-house infrastructures. When so-called “cloud” computing really goes mainstream, those days will be over. Cost will inevitably drive the equation in favor of the utility model.
When I first began suggesting this several years ago, I quickly achieved madman status in the eyes of some of my peers and business associates, but it’s getting closer to becoming reality every day.
Begin to think how your job will change when your server room is gone. You will still need to keep things running, but the way you do it will be very different. Will your business cards also change? Perhaps to an address in the clouds?
If you want to get some early comfort working in a cloud before it’s thrust upon you, I know of a good hosting data center where you can get your feet wet.