- April 21st, 2009
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“Greg – I think u r doing it wrong Cloud computing vs. Data Center = huge savings & efficiencies. Component apps/mashups vs. large enterprise systems = huge savings & efficiencies. Open Source Systems = huge savings & efficiencies. Social Computing & Viral Marketing vs. Actual Marketing Spend = More debatable, but marketing is usually the 1st thing to go in a recession & u need some way to identify new opportunities. We also have video delivery capabilities that greatly reduces cost while improving quality (not really w2.0 though).”
OK, so here is what I was trying to get at:
It goes without saying this is just my opinion; I will say up front that my bias is that I tend to think there is a lot of “trade show BS” stuff going on with web 2.0, its very buzzword compliant, and most of the “emerging” technologies are little different from the stuff we saw in the first 2 bubbles, just different packaging. Cloud computing is really the only major innovation from a technology perspective in the entire lot.
I’ll address each component:
Cloud computing vs. datacenter
It is true that infrastructure is a commodity resource. And IaaS and PaaS (it makes me want to wretch even typing those acronyms) are attempts at packaging that infrastructure in different ways so they can be consumed as such; the main differentiator being how “close to the metal” you want to get. One of the main variables with infrastructure, whether its traditional datacenter, cloud computing, or the plumbing and sewer network in your town is maintenance. And its cost is directly proportional to the reliability of the system, and how much of that system’s design the maintainers are in control of. (i.e in order for me to guarantee the stability of a system, I need to control as many of the variables as possible) What this means is that the further away from it you get, whether its through outsourcing, MSPs, or simply buying rackspace.com you lose the ability to guarantee your availability without massive redundancies built in (and the reliability of IaaS like EC2, and the advent of 3rd party players to manage this for you is proof of this) Bottom line is that you get what you pay for.
That leaves one other variable. Scale. The one thing that IaaS and PaaS give you that you simply cannot get anywhere else is the ability to dynamically scale in both directions. If the size of your operation changes a lot, or you need volatile compute cycles, or something dyamic where you don’t really need to maintain state, they are clearly an excellent choice. But for day to day serving of content? databases? there are just better options. The reality is that these are really just smart CDNs for most people, but no matter what you will still need some backend infrastructure for the database in most cases (you can’t put that on EC2 unless you are insane)
A lot of it comes down to risk tolerance, just like any outsourcing, but what is really amazing about the people doing cloud stuff at high levels is: *their core business is not selling infrastructure as a service* (google, amazon) These are just companies trying to amortize the costs of their own already paid for physical infrastructure and leverage it to cover their costs. Thats not something I want to bet my farm on.
So is it more efficient? Sure, if you are willing to sacrifice reliability and uptime. Which most people aren’t. Is it cheaper? Absolutely, but only for businesses which can afford to risk it, or need offline compute or capacity resources (video encoding) where they can afford risk exposure. So I call that “sometimes a good fit, often not”, and really not that much of an innovation (conceptually) over CDN technology in most cases.
Component apps/mashups vs. large enterprise systems
Absolutely true, if we’re talking about developing NEW systems. Drupal (while horribly inefficient) and its ilk are excellent platforms for developing a wide variety of applications for nearly every contingency. Its unclear whether cost-wise they are any cheaper to maintain over time than traditional systems, even against an evil platform like Notes. Plugging lots of opensource components together to make cool apps is great, but it requires you to hire people with flexible skillsets to maintain them, rather than a monolithic IBM approach. And there just aren’t any numbers about survivability and cost of maintenance for these systems out there yet, probably because they move and change so fast. (as do the companies that have implemented them) Are they more efficient, and cheaper for these new systems? absolutely. but….
The real issue here is what to do with legacy systems. There is no way that a reimplement cost for an app that is currently written in Notes is cheaper in drupal. (we’ve been through that here several times at the NHl with people trying to dump notes) The math just doesn’t work.
So again, sometimes its a good fit, often it is not. And really, is this an innovation over the Portals we all tried to build in the late 90s? The components have gotten better but the ideas haven’t really.
Open Source Systems
For every great line of open source code that is out there there are 10 really shitty lines of open source code. And guess what, its all “sold” under the license of “you break it. you bought it” so you end up being involved in the maintenance and debugging of systems that are well outside your core business. (or paying someone else to on your behalf)
While some pieces of mature open source (mysql, php, LAMP, etc) are good for everyone, the quality of the code (or lack thereof) and the lack of support for larger, less technically agile companies make the vast majority of open source implementations problematic.
Certainly there are plenty of times where this is a huge leg-up. But there are plenty of projects that have gotten mired in the details of the very open source packages that they were trying to leverage. And certainly there is nothing new about that from either an innovation, efficiency, or a cost-savings perspective.
Social Computing & Viral Marketing vs. Actual Marketing Spend
I know the least about this one but it is my impression that there is little value aside from entertainment from social computing. I would love to read some case studies where social networking aided an existing business, but my inkling is that they are very few and far between. Facebook and twitter are excellent diversions and sources of nuggets of info, and LInkedIN is a nice way for me to flex my business network, but i can’t think of an example of a social network that improves the efficiency or cost-effectiveness of other businesses.
I’m not a marketing guy at all, but I will grant you that viral marketing is quite effective while being cost-effective as well. Not really an innovation though, we just called it guerilla marketing 10 years ago The only real change here is the advent of near-free distribution of video clips online, and their ubiquitous availability to large swaths of market segments, particularly the coveted 18-34. But does this work for every product? Hardly. Its useful for a certain kind of product marketed to a certain demographic. You aren’t going to see a snarky video ad for Lipitor anytime soon
So to address your main question which was “will web 2.0 grow faster or slower in a stable/growing economy?” “Web 2.0″ are innovation technologies that primarily benefit new businesses and industries. You aren’t going to save GM with a microblogging social networking empire So if indeed, the economy is stabilizing, and starting to grow again, i believe that W2.0 (and those of us providing services in that space) will benefit from that as new money flows to new businesses wanting to build stuff. But I don’t see it teaching the old dogs new tricks, increasing efficiencies, etc, because the cost of implementing them against legacy systems is just too high.