Good morning. My name is David Friend and I’m the ceo of BlueArchive. I’m here today to talk to you about the commoditization of cloud storage and why this is so important to the Internet of Things.
All these connected devices have something in common: they all consume power and they all produce data. We all know where the power comes from, but what about the data? Where will it all get stored?
Power has become highly standardized. The voltage is always 115 volts, plus or minus 6 volts. 60 Hz. The interface is always the same. It’s a commodity.
Many companies make electricity using a variety of technologies. It doesn’t matter to the user because the product is a standardized commodity.
Cloud storage is on the way to becoming a commodity too, and there will be great benefits to the user when it does.
There’s one kind of object storage that already is a commodity.
Self-storage warehouses are everywhere and they are all pretty much interchangeable. They compete on price, cleanliness, and accessibility.
Natural gas is another example of a commodity.
Dozens of companies produce gas from thousands of wells. By the time it gets to your home or office, it’s all the same. Except for edge cases, it solves almost everybody’s heating and cooking problems adequately.
Gasoline is another example.
There are many suppliers, but gas is gas, and the only thing that really matters is price. The product is standardized. Regular is always 87 octane.
Standardization is a crucial element of commodities, even when the standard makes you scratch your head. For example, a 2x4 is always 1 ½ by 3 ½. Go figure.
With the Internet of things, we need two commodities to support the entire vision.
Bandwidth is already highly commoditized. Storage will get there soon.
Storage will get there,.
Commodity businesses tend to be large and stable. But when new technologies come along that dramatically alter either price or performance, incumbents are suddenly at a disadvantage.
For over half a century, US steel monopolized the steel industry. At one time it was the largest corporation in the world. With their massive investment in infrastructure, nobody could touch them.
Then in 1968 a little company called NUCOR invented the mini-mill. It was far more efficient and nimble than the big US Steel plants .
NUCOR learned how to make commodities like sheet steel far cheaper than US Steel could with their huge lumbering infrastructure. US Steel’s infrastructure suddenly became a liability, a ball and chain that they couldn’t shake. Today NUCOR is the largest steel producer in the United States.
When I was growing up, long distance was expensive.
Same product, half the price. Then, using the new technology of microwave links along train rights-of-way, MCI cut the cost of long distance in half and eliminated the complicated time-of-day-based pricing. Copycats soon emerged.
But AT&T refused to respond. When faced with the choice of losing market share to MCI or seeing their long distance business cut in half overnight by a price cut, they always chose to sit tight. The their huge investment in a land-line infrastructure suddenly became a huge liability.
The lesson from MCI was this:
In the early 1980s, the IBM PC was heading toward a near monopoly.
Then Apple came along with the Mac which offered far superior performance with its graphic interface.
Today IBM is completely out of the PC market and upstart Apple is worth more than 5x IBM.
Oracle bought their way into the server business and went right after IBM with an ad campaign that I greatly admire, because it worked for over 10 years.
Amazon AWS has over 80 different cloud services in addition to storage. We only do the storage. Our belief is that the storage is separable from all the other tightly integrated services. Like the engine in your car vs. the gas tank.
Most of AWS’s web services have to work together as a tightly integrated system.
But storage is like the gas tank in your car. You could replace it with a 55 gallon oil drum and the engine wouldn’t know the difference.
Because storage is getting to be a big problem!
Just Tesla has already stored 1.3 billion driving miles worth of data
And declining prices only accelerates the growth of stored data.
It gets to be like cleaning out the attic. There not enough benefit to getting rid of stuff you don’t need. So it just accumulates.
So the next wave of storage will be commodity storage. Stay tuned.
David Friend, CEO, BlueArchive
(That’s good for IoT!)
David Friend, CEO
What’s holding it back?
• Still too expensive, especially long-term storage.
Tape, paper storage are still cheaper.
• Too many sizes
Nearline, Coldline, Glacier, Infrequent Access, Reduced
• No standard API for IoT devices to talk to
S3 API almost a standard, but Google & Microsoft still fighting it
Otherwise, pretty darned close.
My prediction (in fact, my mission):
Object Storage becomes a commodity
Like electricity, one size fits all.
1. Simplification: One size fits all. You won’t need silly
2. Standardization: One API will become a de facto standard.
No vendor lock-in.
3. Speed: One speed will be fast enough for nearly
everything. You won’t need slow.
4. Safety: 11x9s, encryption at rest, hardened networks
So coming soon to an airport near you.
Visit our web site after April 10.