I’m attending the MIT/Stanford Venture Lab (VLAB) conference on Cloud Computing.
Jonathan Bryce, Co-founder, Mosso, is the keynote speaker.
Overview: “Cloud computing increases capacity and expands computing capabilities without heavy investment in infrastructure, training or software licensing. Most importantly though, it democratizes Web 2.0 application development. With the removal of two significant barriers to entry – cost and capacity access – suddenly even small, lesser-funded entrepreneurs can dream big and bring their grand Web 2.0 applications to market.â€
Moderator: Ross Mayfield – Chairman, President & Co-founder, Socialtext
Panelists: Paul McNamara, CEO, Coghead
Ping Li, Partner, Accel Partners
Michael Crandell, CEO & Founder, RightScale
Lydia Leong, Research Director, Gartner
Jonathan Bryce, Co-founder, Mosso
There was a lot of Q&A and the basic agreement that the audience had was that cloud computing is the future, although there are a lot of challenges that lie ahead. I think the consensus view was somewhere between 5-10 years before it became mainstream practice.
Jonathan took the podium to discuss his experiences with Mosso, which is a subsidiary of RackSpace.
Rackspace in 2004 not only survived, but thrived during the downturn post 2000. Their average growth was about 60% a year and Jonathan was part of the team that drove the company to setup a virtualization platform for the company and facing the fact that cloud computing was inevitable, but they had to change or die. His proposal was to:
Stop selling servers
Share infrastructure
Cut prices by 1/4
Become an innovator
Jonathan realized that this would cannabalize the existing business, so they created a separate entity which was a threatening competitor, stole some of the best talent, moved out and bashed servers on their own site.
The differences between cloud computing and traditional servers are very startling. In the traditional server business, there is a lot of upfront cost that goes into setting up a server for a customer – which inevitably means setup fees and long term contracts. With cloud computing, it’s pay as you go, and it’s cheaper for both the customers and the provider.
Before Amazon launched S3, storage cost $20/GB with buyers needing to buy terabytes at a time. With S3, it’s not 15c/GB.
Many people wonder how and why we can offer unlimited free hosting at SynthaSite – this explains it quite well. The cost of hosting has dropped to a minimum amount and given that in a competitive market, the price drops to marginal costs (Economics 101), how can anyone charge a small business or personal user to host a website that literally costs pennies…
Cloud computing is changing the economics of the Net and allowing more competitive businesses to spawn, which will create business models and revenues out of value creation, and not complexity or overhead (value vs. time+materials+markup). It’s like comparing an accountant to an investment banker.
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Comments On This Post
June 19, 2008 at 2:05 pm
being a website hosting reseller, the first question that pops into my mind is: “HOW CAN SOMEONE LIKE ME TAKE ADVANTAGE OF THIS TECHNOLOGY – THAT IS NOT AVAILABLE IN SOUTH AFRICAN CYBERSPACE” and still keep my prices low with the weakness of our currency?
June 19, 2008 at 2:35 pm
It’s coming man … give it a few years…
June 21, 2008 at 5:50 am
Yeah for the little guy! Hang in there Phibaoptik. It’s coming….
June 27, 2008 at 9:41 am
Vinny, i agree that revenues will come out of value creation, which is why i have a suggestion on how you can add value to Synthasite.
Basically put, I’ve subscribed to a lot of service and content sites on the web, and one of the most frustrating aspects of going back to a site you don’t visit frequently is when you cant remember your username and password information. Now, maybe i’m a little behind on managing my details online, but i cant see an easy way for someone who has maybe deleted their cookies, and not saved their passwords, to log into a site they visit infrequently.
As i manage multiple e-mail accounts, it would now require testing each account to see if it matches up with your site. Not to go into the whole privacy issue, but from a practical standpoint, it doesn’t leverage well for returning visitors. Maybe you could pioneer/provide a solution for this problem, if its common that is?
June 29, 2009 at 11:00 pm
That is a great explanation about cloud computing, and possibly why my small host went out of business a few months back. The small hosts are just not viable anymore. They didn't actually go out of business, they got bought up by a larger company.
July 15, 2009 at 10:38 pm
Hey, very intersting Post about Cloud Computing.
It will come in the next years. Dont lose your mind
July 28, 2009 at 6:43 am
about hosting, I usually use free hosting at 07x.net. Biggest space and faster enought than other free hosting
August 16, 2009 at 10:24 pm
thank you for sharing
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