Cloud Economics 1: A Vision

For the past few months we’ve been looking at the technical side of real-time cloud computing.  We’ve touched on some of the requirements for supporting real-time data communications on the cloud, looked at how SCADA and embedded systems might benefit from accessing the cloud, and even considered how the term “real time” may be best applied to cloud computing.

Going forward, I thought it might be a good idea to switch gears a bit, and take a deeper look at the business and economic side of cloud computing, and see how the latest thinking about cloud economics may or may not apply to real-time applications.

A new book, Cloudonomics, by Joe Weinman, Senior Vice President of Cloud Services and Strategy at Telx, gives a profound yet accessible overview of the business value of cloud computing—in other words, cloud economics.  Among other things, the book’s cover blurb says, “Weinman drills down past the hype and hysteria, the myths and misconceptions, to uncover the fundamental principles underlying how the cloud works, how it’s used, and how it will evolve in a business context.

With the vision of a mathematician, Weinman strips away the non-essential features of the cloud and breaks it down into its basic elements and principles.  At that level, he can demonstrate how “cloudy” ideas and concepts have been used for centuries.  For example, he shows the similarities between cloud computing and the transportation and lodging infrastructure of ancient Rome, complete with multi-protocol wide-area networks, pay-per-use resources, value-added services, regulatory agencies, security tokens, branding, advertising, and more.Coins for the cloud.

Weinman uses lots of real-world examples to show how we find cloud concepts in every facet of life, such as hotels, taxicabs, and movie theaters.  At the same time, he introduces some simple mathematical theories and models that sometimes uphold and sometimes contradict much of the conventional wisdom that has grown up around cloud computing.

Through it all, he strives to adhere to three goals: 1) present a multidisciplinary view from a number of fields of economics, mathematics, natural sciences, and system dynamics; 2) plant seeds of ideas in areas related to cloud computing, which may be cultivated and developed by others; and 3) take an evergreen approach, where the concepts are so fundamental and universal that they will serve to inspire research and application in business for many years to come.

Although I haven’t read it exhaustively, I’ve not yet seen much mention of the application or value or real-time systems in the cloud.  This is not surprising, as this topic is still on the distant horizon for many leaders of thought.  Or, it could be that what applies to cloud computing in general also applies to real-time cloud computing.

This raises an interesting question: Is there any significant difference between the economics of the more familiar cloud systems of business and consumer applications, and the less-well-known real-time cloud systems for industrial and embedded applications?  We know there are some unique technical requirements.  Is there a fundamentally different business model for real-time cloud?

In the weeks to come we’ll take a look at some of the ideas presented by Weinman in Cloudonomics, and see how they may or may not apply to the special case of real-time cloud computing.