Apps, Software and Video Games shortly will go the way of the DVD – they will live in a ‘cloud’.

Bandwidth is the key to the cloud. If you’ve got enough access to it, meaning if you’ve got a fast enough connection, then you don’t need any physical media or software to live in your PC, Mac or for that matter very soon your mobile phone and tablets.

We used to have giant ‘desktop’ computers that had to have HUGE hard drives in order for us to install many applications. For example, Photoshop, Dreamweaver, MS Office, CAD software, etc. all are very large installation packages. Couple this with your collection of MP3’s, photo’s, video’s and documents and most of us ran out of room on a PC that had 50-100 gigs of space for a hard drive.

The obvious to the consumer

Today, as a consumer we see convenient repositories for photo’s, music and videos and documents. Skydrive, GoogleDocs, Dropbox, Box, Amazon Cloud Drive. Now consumers are beginning to understand and use these places to store what they used to store on their home computers. Why? Several key reasons – first, once uploaded to a large mainstream cloud drive (and I mean to the likes of Google, MS or Amazon) your collection of ‘whatever’ is safe. How many of us have dropped or lost a laptop, had a hard drive fail, spilled coffee on our desks and then PC, etc. If you didn’t back it up to an external hard drive you lost it all. Worse yet, I’ve had friends who did and THAT and the hard drive failed shortly thereafter. Years of precious photos (and now videos more than ever thanks for our mobile phones) you can never get back or thousands of MP3’s gone (at $.99 each). Second, consumers now are getting familiar with storing their digital belongings off site and in a cloud. We hear about Amazon’s or Google’s cloud storage drive initiatives more and more everyday. They are fast becoming the new norm. And third – they are not expensive. Certainly not when compared to a 1.5 Terabyte hard drive that can fail without warning.

The not so obvious to us all

What’s not so obvious to consumers is what’s happening in the enterprise business realm. Years ago, you wanted to put up a business domain web site or had a business that required large databases, some required separate servers for clients that are uber security conscious, some needed to have their domain living on a separate server from others (especially the financial and health industries). Others needed production servers, staging servers and then after testing finally deployed an application or web service. Sometimes IT had to physically travel to the colo facility to apply a ‘patch’ to a newly deployed application and hoped that the patch worked as it was supposed to or else everything came to a screeching halt. Businesses lost money, time, and face sometimes. You’d pay Sun, Oracle, Cisco, EMC, etc. millions to deploy servers and DB’s for your environment. You’d spend money on hiring the right technical IT staff to deploy and sync and stitch all of this together. This WAS the norm.

Enterprise today is all moving into a cloud based environment – virtualization is the norm now.

Sun servers were all the rage in the 90’s. But they were VERY expensive. Robust, great customer service, but very costly. Today, you can run a linux box for a fraction of the cost. No more hard drives or servers (blades or otherwise). You can fire up an ‘instance’ and server through AWS in a few minutes. No going into a colo facility. Start-up’s can get to market almost instantaneously and for far less of a cost. You pay for what you use. No more buying a million dollar license for ATG, Vignette or Broadvision and installing 15 discs in a cage. You rent it now. Patches get uploaded by the cloud vendor in a virtual environment and tested before they are deployed to you.

With the rise of this ‘virtualization’, more and more apps or processes now get built into the browser. Java script was written just for this purpose and has allowed for far more sophisticated applications to run in a network environment and now on browsers. Other software will be embedded in browsers as time goes on that will mimic the functionality and hardware on your PC. You can bet on it.

Platform as a Service (PaaS)

Whereas IaaS (infrastructure as a service) providers offer bare compute cycles and SaaS (software as a service) providers offeraccess to such apps as CRM online, PaaS offerings provide turnkey services for developers to get their apps up and running quickly, no infrastructure concerns needed.

Offered as a service, PaaS runs the gamut from development tools to middleware to database software to any “application platform” functionality that developers might require to construct applications. None of these above services come without their problems. But so did everything else before them.

IaaS focuses on managing virtual machines, and the risks are little different than with other cloud types — here, the main risk is rogue or unwarranted commandeering of services. IaaS requires governance and usage monitoring. But with this comes a good degree of convenience and business ROI.

Some of the most popular cloud services running virtually are; Microsoft Windows Azure, Googles App Engine (which offer a nonSQL relational SQL database service), VMware cloud foundry, ( from, Heroku (also from SF), Amazon Elastic Beanstalk, Engine Ysrd Cloud (for Ruby on Rails enthusiasts), Engine Yard Orchestra (for PHP enthusiasts) and CumuLogic (for Java developers). Consumers never see or hear any of this but use web services that live on these services day in and day out.

What will be obvious to consumers in about 10 years or less

All of this bring me back around to bandwidth and apps. Once we have enough consumers that have access to real fast broadband (100mbps or more down and ideally 200mbps down), then the Apple and Android app store will disappear. Software discs will become obsolete. Video game installation discs – gone. Why, because once you have enough speed, apps can be loaded and accessed wirelessly via the web. The calls to databases, functionality and such can all be received instantly online. Its already happening, slowly. Examples of this in the entertainment space is Ultraviolet, bring your DVD’s to Wal-Mart and upload them to your digital locker – no more disc. Onlive, Livestream, Gaikai all stream video games without the need for a disc, Netflix (you know about them). Consumers are aware of these, but then you’ve also got GoogleDocs and Skydrive for documents and the creation of word and excel docs. We don’t need an install disc anymore.

Last week, it took me 4 days to upload 12,934 MP3’s to my cloud locker at Amazon Music drive. Less time than I ever thought. Available anytime for me to download if need be. That’s nearly $ 13,000 worth of music, stored for as little as $ 20.00 a year.

Mobile apps, software suites, video game discs, movies, music photos and more will still be here but will not physically be in your home forever. It’s inevitable.


‘clouds’ and ‘context’ and web 3.0

Web 1.0 can be seen as embracing the ‘Commerce‘ on the web (amazon, ebay, netflix, etoys +) and a whole bunch of failed’s that went bust during the March 2000 meltdown. Web 2.0 can be viewed in terms of embracing ‘Community‘ as myspace, youtube, friendster, linkedin and facebook. Niche communities to be part of online. So what is web 3.0? It’s ‘Context and Clouds‘. With Web 3.0, the internet will act as my personal shopper through increased personalization, a built in recommendation engine through your peers in online communities and in the ‘clouds’ – whatever software and media you need will live in a ‘cloud’ (like DropBox) or (set of them) for you to tap into anytime just using a browser. webtonic.jpg

In order for the web to really become a ‘personal’ shopper and recommendation tool it has the potential to become, it needs to get my data. The enormous amount of data that is being collected by various services will over time be used to deliver specific and personal media to me. And its not just media that will be suggested. Everything from what interests me personally – clothing to household appliances will be ‘personalized’ just for me. And frankly, some call this an invasion of privacy. To me, it’s finally a tune-up of how advertising should work. If TV advertising worked this way, we’d all be happier to sit through some ads on TV. But it doesn’t. And the internet will be able to ‘perfect’ what TV has been unable to do since the 1940’s. old-tv-set.jpg Let’s take a quick look at TV.

On TV, advertisements run on certain programs based on the demographic and audience measurement data gathered by Nielsen. Nielsen operates in over 100 countries. Nielsen was founded in 1923. Nielsen conducts these tests by calling the locals and asking them what they are watching at the moment.

The system has been updated and modified extensively since it was developed in the early 1940s. It has since been the primary source of audience measurement information in the television industry around the world. Since television as a business makes money by selling audiences to advertisers ($65 billion spent on TV in 2006, Ad Age), the Nielsen Television Ratings are the single most important element in determining advertising rates, schedules, and program content.

Nielsen Television Ratings are gathered by one of two ways; by extensive use of surveys, where viewers of various demographics are asked to keep a written record (called a diary) nielsendiary.jpg of the television programming they watch throughout the day and evening, or by the use of Set Meters, which are small devices connected to every television in selected homes. These devices gather the viewing habits of the home and transmit the information nightly to Nielsen through a “Home Unit” connected to a phone line.

OK, so its 2008. Doesn’t the above sound a little ‘tired’ already?

Now switch to the internet. While some people are irked by ‘cookies’ and other’s by giving away information on forms or saving a ‘preference’ on a website or which websites are in ‘my favorites’ or ‘bookmarks’, these actions eventually will all allow advertisers to better target each of us and offer a service/goods or media that I’d really consider owning. And it’s the web services that mine this info through my interaction with them that are the best. Google being the first and best at it, is now a ‘brand’ name. And it’s the only brand name that doesn’t advertise and never has (think about it). It engages. Its very core looks to help and through its offering of great services to us, allows it to gather information about us and tailor its ads and services accordingly. I use many services offered by Google. In exchange for this, I’ve given some of my personal info to Google.

New ‘vertical’ search efforts like sidestep (travel), icerocket (blogs) imedix (medical) and other ‘niche’ search products will further help advertisers deliver specific services for each of us that are helpful and useful. Google has done a great job in a broad sense but now it appears that there are many new ‘vertical’ search engines that specialize in searching very specific ‘ niche’ subjects and categories. Drilling down where Google is not. Over the course of the next several years I think we will see several ‘vertical’ search engines giving Google a run for its money.

But that’s another post for a different day.