Simon Wardley @ FOWA Feb 07

Commoditisation of IT and
what the future holds

Good Morning,
I!m here to talk about “commoditisation of IT” and future stuff.
LET ME FIRST INTRODUCE MYSELF - my name is Simon Wardley
and in homage to web 2.0 and for those of you who don!t know me -
I!ve made a tag cloud of ...

Politics

Worth Based
Inkjets Electronics

Commoditisation
Genetics

Ducks
Maths
Programming

Patents Football

Fotango
People Printing
Freedom
Open Source
Javascript
Archery
XP

my passions.
If you look carefully, you may notice that I like ducks.

Pond

Ducks

that!s because I have a large pond at home with lots of ducks.
I think ducks are great, unlike turkeys ...

Screenshot from web : http://www.sathnam.com/Features/32/bernard-matthews

... which I can! t stand.

Well that!s me .. so onto the subject at hand which is ....

Politics

Worth Based
Inkjets Electronics

Commoditisation
Genetics

Ducks
Maths
Programming

Patents Football

Fotango
People Printing
Freedom
Open Source
Javascript
Archery
XP

Commoditisation
Now to understand why I think this is an important story, I need to take
you ON a TRIP BACK in TIME to 1997.
To set the scene, for those of you who can!t quite remember, back then

Screenshot taken from web of the Spice Girls (scary was my favourite!)

these girls were hot, especially the scary one.

Screenshot taken from web http://en.allexperts.com/e/m/mi/michael_j._fox.htm (p.s. it ain’t me)

I was good looking

Screenshot taken from web of a youthful Tony Blair

and labour were novel, exciting and NEW.
My passions at that time were ...

Politics

Snowboarding
Pepsi Electronics

Commoditisation
Genetics

Databases
Maths Microsoft Programming

Patents Acting
Business theory Football

Security
People Judo
Freedom
Trading Bridge

Cars C++ XP
Archery

roughly the same bar one obvious missing item

No Pond

At that time I was working in the ﬁnancial sector and had a big interest
in the concept of commoditisation ... so what is that?

change from monopolistic
to perfect competition

well this is the formal deﬁnition “change from monopolistic to perfect
competition”... however I prefer in plain old english

Yesterday’s Today’s
hot stuff boredom

Yesterday!s hot stuff becoming todays boredom
or alternatively
how novel, exciting and new becomes taken for granted, uninteresting
and

Screenshot taken from web of a more recent Tony Blair

unloved.
Just like

Screenshot taken from web at http://www.takingdownwords.com/photos/uncategorized/turkey.jpg

Turkeys.
A good example of this is electricity.

1890’s

Electricity

Back in the 1890!s electricity rocked, it was hot stuff, really really hot
stuff.

1890’s

Electricity

Electrical engineers were the spice girls of their time.

It mattered ...

Screenshot taken from web at http://www.sandowplus.co.uk/index2.htm

For your average forward thinking business man, it provided new
competitive opportunities.
You could replace expensive

Screenshot taken from web at http://padovacultura.padovanet.it/homepage-6.0/Oliver%20twist%204.JPG

labour with shiny new machines powered by electricity.

1930’s
1890’s

National
Electricity
Grid

by the 1930!s we had the national grid - most companies had electricity,
it was becoming common.

Ubiquitous
Rare thing
Distributed

and this is one view of how commoditisation works - something novel
and new become something common.
and this creates opportunity, for example
With easily available power, data processing and communication you
can have google.

Ubiquitous
Rare thing
Distributed

Competitive
Advantage

When something is novel and new, it is described as a source of
competitive advantage.

Ubiquitous
Rare thing
Distributed

Cost of doing
business

When it is common it is described as cost of doing business.

Now in the 1990!s - web sites were novel and new. So us web
designers

Screenshot taken from web at http://www.adverblog.com/archives/002364.htm

were hot, the spice girls of our time - obviously along with the spice
girls.

There were lots of us getting paid oodles of cash for building things like

Yahoo & webcrawler & Cam CL, waybackwhen, 1996

this.

We made a strategic difference, created competitive advantage which
was great,

Screenshots taken from web at http://www.strassmann.com/

Until Paul Strassman pointed out that we didn!t.

Apparently all that was happening was one big arms race with
companies wanting ever bigger and better IT than competitors. And of
course everytime a company got some new big gun

Screenshots taken from web at http://www.ﬂickr.com/photos/79155248@N00/59880012/

like an e-commerce site

then of course, all it!s competitors

Screenshots taken from web at http://xsetera.com/MY_SPACE/Picturz/Kitten%20Gun.bmp

followed suit.

and if you weren!t armed ...

Modiﬁed screenshot taken from web

you had problems.

Leading Standard Utility
New Thing
thing
Edge Products Service

anyway that!s how commoditisation works.

New Thing
thing

Blog

Someone invents something new

New Thing
thing

Consultants

If it is useful everyone copies it

New Thing
thing

Moveable Type

until someone releases a product

New Thing
thing

Typepad

and then ﬁnally you have utility hosted services.

New Thing

There is a constant move towards commoditisation, a constant shift
from novel & new to commonplace.
Much of IT is no longer strategic, it!s a cost of doing business. In much
the same way that using electricity is not a strategic choice - it!s just a
cost of doing business.
So let!s come back to the modern day ...

Trends

software as a service

utility computing

the trends today are about commoditisation

software as a service
utility computing

Web 2.0

Even the term web 2.0 implies that THERE are things which are

Web 1.0

web 1.0 - old hat, common.

Screenshot taken from web at http://www.adverblog.com/archives/002364.htm

You can!t turn up today and want oodles of cash to build what we used

companies want to pay for the novel and new.
Everything common is just a cost of doing business and they want
that ...

Screenshot taken from web at http://www.pda.org.uk/leaﬂets/15/no15-print.htm

cheap as chips.
So what should be cheap as chips? Where can we make cost savings?
Operating environments are a good place to start.

Screenshot taken from web at http://en.wikipedia.org/wiki/Server_farm

There is NO competitive advantage in having your own web
infrastructure, they are as common as muck.
There is no advantage in setting up a database or a web server or any
of the hundreds of common things which we do every time we build a
new site There is a phrase for this repetitive muck - it!s known as

...Yak Shaving.
It doesn!t make sense to do the same things over and over, pay for
things which you don!t use and to have everyone planning for capacity
spikes. It!s wasteful.
What is needed is an environment where you can build and release
what you want and pay for what you use.

Amazon EC2,
Ning

This is what they are doing with Amazon!s EC2.

Zimki

and why we launched Zimki - a utility computing service.

Build what you like online in JavaScript
From a wiki, to a web site, to search, to a blog.
Do this without ever going near a server, database or hosting
arrangement.
Just develop and release or even copy a clonable application.

pay for it as you consume our computing cloud.
Of course, you still have the old concern about lock-in to a hosting
vendor.

Open Source
HTTP Server

XML Server

Zimki API

SpiderMonkey

Zimki Object Store

that!s why later this year we are open sourcing EVERYTHING.

Your Application

So you can run your application on our environment, or another
environment from a grid of Zimki providers.
You can switch environments easily, you can build your own, you can
even sell spare computing resource back into the grid.

Your Application

Using the electricity analogy again, think of these providers as power
stations in a national grid,

Your Your Your Your
Application Application Application Application

Your Your Your Your

Your Your Your Your

with thousands of users paying for the resources they actually
consume.
It!s about balancing supply and demand in a much better way than ...

Your Your Your Your Your Your Your Your Your
Application Application Application Application Application Application Application Application Application



the current situation, where every company seems to have their own
massively under utilised hosting centre.
There is an awful lot of waste here.
Now where there is waste, there is opportunity - not only ﬁnancial but
also environmental, which

Modiﬁed screenshot taken from web

is good for ducks.

So in summary, commoditisation is a growing trend and if you!re not
looking at it you can bet your competitors are

Screenshots taken from web at http://xsetera.com/MY_SPACE/Picturz/Kitten%20Gun.bmp

There are several different environments being created but

If you want to build stuff in JavaScript, online, without the headaches of
servers, databases, hosting arrangements etc.

and if you only want to pay for what you actually consume

Screenshot taken from web at http://www.pda.org.uk/leaﬂets/15/no15-print.htm

and if you want it cheap as chips in any case

Zimki

then come and chat with us.

Zimki
The home of pre-shaved Yaks

our Yaks are all pre-shaved.

Simon Wardley @ FOWA Feb 07

Recommended

Recommended

More Related Content

Similar to Simon Wardley @ FOWA Feb 07

Similar to Simon Wardley @ FOWA Feb 07 (20)

More from carsonsystems

More from carsonsystems (20)

Recently uploaded

Recently uploaded (20)

Simon Wardley @ FOWA Feb 07