Let’s start a new meme/hashtag/acronym: Global Information Network, or GIN. I know there is a double meaning here, but we have the right to have a modicum of pleasure in life, right?
I’ve been writing about the advent of an information utility for a while, but even my visions don’t match what we’re watching unfold. In short, it occurred to me some time ago that information was becoming (and is now) so essential to life that it becomes commoditized with the infrastructure that supports it.
Products become commodities all the time when something turns out to be so essential that everyone needs it, not just a select few. When this happens, something curious happens economically.
If you have to sell at the lowest common denominator, there isn’t much room for profit. Competitors looking for a seat at the table slashed prices ruthlessly until the only way to turn a profit was to sell billions of dollars worth of merchandise for pennies a profit.
Commodification of information
This is essentially what the cloud computing revolution of this century has been. We started with large rooms filled with air-conditioned equipment that ran on relatively low-powered computers that provided financial reports to the CFO.
Additional requests were difficult to find and were always at the discretion of the CFO. There was no IT manager at the time, only an MIS or management information systems manager whose job was to support the CFO, hence the focus on reporting.
But commoditization has opened up all sorts of opportunities: departmental computing, PCs, email, the Internet and more.
In the mid-1990s, Alan Greenspan, then Chairman of the Federal Reserve, was unable to explain the rapid and significant expansion of productivity and employment growth in the United States with barely a whiff of inflation. . Classical economics had no answer, but we all knew that the trivialization of information also led to its democratization, information for all. Productivity followed.
Cloud computing has commoditized computing, and it’s not too soon. The late 90s saw a horror show as the latest mass delete and replace movement hit the back office scrambling to accommodate four-digit date formats. Never again the mute refrain of those who lived it.
In its place came cloud computing, or what became cloud computing, a commoditization that made data center hardware and labor unnecessary for the user. It was a simple and enticing promise: just pay a monthly subscription and your data and applications will be there.
The Global Information Network (GIN) is now approaching, which is commoditizing cloud computing just as surely as the cloud has made the computer room a distant memory for most organizations.
To fully appreciate GIN, consider how Microsoft Azure partners with Oracle and Salesforce as well as others. They are well on their way to having a giant data store, each easily converting to another on demand.
Understand then that Amazon Web Services (AWS) is after any cloud provider that wants to be able to expand their cloud geography without building or buying massive infrastructure.
Salesforce and others build relationships to support store-anywhere strategies. Also consider how some may shift workloads between processors in search of the most convenient and cheapest bare metal.
One of the latest examples of cloud sprawl is Oracle’s recent announcement that it will roll out 14 new cloud regions next year in addition to the 22 already in place, with more on the horizon.
Oracle and the others dream of blanketing the world with commoditized information services and migrating their users wholesale from on-premises computing to their clouds — and they will, most of the time, is the content of the time.
But we’re also entering an era of coexistence and greater integration, an era where who owns and manages the hardware is far less important than what’s done for the user. So don’t expect an IT operation to be exclusively under the sway of a single vendor.
When PCs became fully commoditized, it was because one vendor, IBM, set a standard for PC architecture and everyone, from memory to disk drive to monitor maker, supported the standard.
My two bits
This is what commodification does. The big players like Microsoft, Oracle, Salesforce and a few others are seizing on this moment of commoditization and they understand that the winners will hold a substantial share of the market – and a new kind of secret sauce – for the next fifty years. This is what drives a strong interoperability movement.
There has never been a better time to be a customer in the information services market. But it’s also a perilous time to be a software startup because while the architectural standards may seem inviting, the majors’ market power will make it difficult to capture market share without being consumed by the biggies or co-opted.
This is the potential downside of commoditization, it promotes mediocrity by inhibiting innovation.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.