Innovating Cloud: lessons from the Front

There has been an exponential explosion in the term “cloud computing”.  Today it is so overused that its really just representative of the entire IT industry.   But where did it suddenly get traction?

On 28th Feb 2008 a team of 7 journalists took to the stage at the Westin St Francis Hotel in San Francisco.  They hated the term SaaS (Software-as-a-Service) and challenged the 500 industry delegates at the conference to brainstorm for a better alternative.  “Cloud Computing” was just one of a dozen terms voted on but there was no consensus.

It was however a term we had used for several years internally and I decided to adopt it for our owncompany.  During the next 4 months I put 2x of our staff on dominating this name space across the Internet.  It wasn’t hard to do as nobody was using the term.   I’m not sure we did a great job of it but by June 2008, my Co-Director Aidan Montague thought I had made a mistake and had wasted precious time.  Hardly anybody was  searching on the term “cloud computing”.  He thought I had made a wrong call.

But there had been some mild adoption of the term in some circles.  In June 2008 we saw the first “cloud computing” conference hosted by VLAB at Stanford University.  As I was driving down 101 on the way to Stanford  I had a call from a journalist from the West Australian Newspaper asking me what was cloud computing.   Then over the next 2 months the growth in the term became exponential.  I returned to Australia briefly and heard the News Radio do a 50 minute special on Cloud Computing.  By September every major in the IT industry had commented or stated they also had a Cloud Strategy.  Yet speak to most industry people and they really had little understanding of what the term meant.

I could see we were well ahead of the curve because we had used virtualization extensively in various forms for 8 years, virtualizing the desktop, virtualizing the server, and virtualizing the corporate network within the cloud.  Our issue had always been that nobody understood what we were talking about or it simply had no credibility.  Suddenly this all turning 180 degrees overnight.    I could see the rate in uptake of the term was growing so rapidly that within a few months it would become overused and meaningless.  And this is exactly what happened.  We were early in our decision to differentiate ourselves quickly and so morphed our language into representing GoPC.net as a Cloud Platform.

The Global Financial Crisis (GFC) hit in Oct 2008.   General Electric announced they were moving to a cloud solution.  Analysts observed the GFC would probably drive adoption of Cloud as businesses looked for cheaper solutions.  The Cloud, it was said, would be the big winner.

By Christmas 2008, every significant IT organization in the world had a Cloud Computing strategy, and this now included Microsoft.

It was truly amazing to watch.   It was like being in a land grab during a gold rush.  I felt like we had been the first ones to peg our claim but talking about cloud computing then had very few listeners.  Within months, what we had been creating for years, had suddenly become mainstream and very credible.  It had become the main thrust of the entire IT industry.

Today, May 2010, it is coming up to 2 years since the Clouds “Big Bang” explosion began.   It is still creating a new universe and this is changing everything within our $1 trillion industry.   Analysts like Gartner predict the new industry will be $167 billion by 2012.  Hosted Virtual Desktops will be a $65.7 billion industry by 2013.  The numbers are staggering.  It’s a total disruption to the existing supply chains and support channels that make up the bulk of our industry.   I’m comfortable saying that GoPC.net will be part of this.  We’re on a rising tide and we have built an incredibly resilient technology platform that will keep evolving at the front edge of cloud innovation.  We simply have to keep adopting the best of the best technology coming available.   The Big Bang sweeping change throughout the IT  industry will be difficult because people resist change, but there are new opportunities opening everywhere as well.

More about those opportunities in my following posts.

I studied Physics at University but ended up in Chemistry and later Computer Science.   My passion is still Physics, in particular Astrophysics.

I started Central Data Systems in 1982 and built this into a successful mid-sized IT consultancy in Perth, Western Australia.

In 1995 my view was that the Internet had plateaued.   A number of ISP’s were created by people I had worked with and a couple of these became remarkably large.   The ISPs burden was supporting customers PC’s which they had no visibility of.   When Citrix released Winframe 1.6 I saw an opportunity to create a kind of “Microsoft Mainframe” which could be housed inside the ISP.   The idea was that all the customer programs and data would run on the mainframe where we could support it easily and relieve the main cost burden for the ISP – support.   The benefit to the customers were enormous.    I fell in love with the idea and just had to do it.

I couldn’t afford to buy an ISP so had to build one myself.  A few weekends later and with guidance from a friend, Mark Dignan (Digger), we were operational on Slackware Linux.    The business worked.   By 1999 we had grown to a private network spanning Australia with many business customers running off our Citrix/Microsoft server farm.

On a trip to London in Dec 1999 was reading an IT magazine and came across a new term I had never heard of before.  ASP (Application Service Providers).   The industry analysts had coined a term that described exactly what we had been doing for the last 4 years.  I knew it was a great idea but was still surprised to see just how strongly the analysts approved of it.

We looked at floating the company with the support of one of our major customers.   Fortunately the Dot.Com crash occurred before we got it away and I was left with my company intact.  In fact we thrived during the Dot.Com crash because the ASP idea was so strong and we had real revenue and solid customers.  I believe the analysts missed the sweet spot which was actually the intersection of  (i) providing the server infrastructure,  (ii) providing the computer network and (iii) providing the application software.   It was the vertical integration of all technical levels which allowed us to survive and thrive.

We brought forward all the lessons we had learned into the next generation and started creating a new ASP infrastructure that would eliminate all the software license costs which had outpriced us from most of our intended market.   By 2002 I had seen one of our competitors raise and spend $37 million before folding.   We had leveraged different technology and achieved far more functionality even though we were running off the smell of an oily rag.   I think back now what would have happened if we had raised millions at this time and I’m sure most of it would have been wasted.  There’s nothing that drives efficient innovation more than limited resources.  We called it “Linframe” a play on words combining Linux with Metaframe.

In Dec 2004 we went live with our GoPC,  a Virtual PC (a virtualized desktop infrastructure plus a lot more backend systems running from our data centre) with several trial customers.  My view had always been focused on enterprise and government.   We re-branded Linframe as GoPC.net.   In 2005 during a trip to China the penny dropped and I realized the potential for GoPC.net as a consumer product.   We could actually export to the Chinese – it was quite an exciting idea.

In mid 2005 we spun GoPC.net off from Central Data Systems into its own entity and since then it has taken on a life of its own and become an adventure I would never have dared to even dream of.

In late 2007 I moved to Silicon Valley and now split my time between San Francisco USA,  Perth Australia, and the United Kingdom.