Tag Archives: cloud

Netbooks, Moore’s Law And Which New App Will Come for Rescue?

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The rise of Netbooks, of which 21 million units* will be sold in 2009, may put in jeopardy the progression of Moore’s Law, as netbooks cannibalize sales of laptops. As a result of Moore’s Law, the price of a mid-range PC has not changed much since long, but every year the power of the machine you buy doubles the one available a year before. This exponential growth in performance can be easily tracked in the amount of storage that you get each year for a $25 SD card (8GB in 2008 vs 4GB in 2007) or for a $100 hard drive (1TB in 2008 vs 500GB in 2007). For microprocessors the rule is shifting from doubling clock speed, to doubling the number of cores every 12-18 months. This geometrical progression results in a laptop in 2018 with 256 cores and 32 TB solid-state drive.

Nebooks are driving Moore’s Law in a different direction. A Netbook has the power of a PC of 3-4 years ago, just at a fraction of the cost. And the reason netbooks replace laptops is that they can run the same basic applications that most people use: web browsing, email, writing docs or Skype. Although conceived as an ideal second ultraportable computer for road warriors, netbooks could become the prime PC for basic use in the office and at home for many in these times of recession.

Software, and in particular Windows, have driven the evolution of the PC hardware with “hungrier” software versions every few years. But Vista failed to bring any breakthrough features compared to Windows XP, and netbooks are benefiting from that.

What do software developers have in their roadmaps that will need 256 cores in ten years? Video editing, media encoding or photo processing software need powerful CPUs, but unless the future bring us an OS with disruptive user interfaces with 3D virtual reality, HD, plus voice and gesture detection, it is difficult to imagine why we will need 256 cores in a laptop or desktop PC.

What is sure is that Multi-Core CPUs fit nicely with server virtualization, and that will make data centers which host the cloud more cost-efficient. The demand for multi-core processors for servers will sure drive the CPU market, but will it be able to do it at the same pace as desktops were doing before? If we are to believe in the success of the cloud, not only the value is shifting from the OS to the Cloud, also the demand for stronger processors is.

We could well end up in 2018 with 256-core servers in the data centers and ultra small low-cost dual-core devices in our pockets connected to the cloud.

* The Economist: Less is Moore

Update:
Intel could report soon the first quarterly loss in 21 years. Even if they say Atom margins are similar to those of the high-end processors, there is always the doubt if cannibalization has anything to do with the loss. On the other side AMD says they will not address the market for netbook processors, instead putting all eggs on the high-end CPUs that will power cloud servers. Will we see the 256-core CPUs somewhere else than in servers?

Top 5 Disruptions in the Past Twelve Months

These are the top hottest five topics that we have covered over the past twelve months with the biggest potential for a disruption in both the Communications Industry and in our habits.

1) Mobile Internet, the Internet way.
The iPhone and Google’s Android have revolutionized Mobile Internet in the handset, making web browsing such a cool and better experience that operators have embraced unlimited data plans for the first time, in bundle with these “next-gen” handsets (well, in fact operators did it first with Blackberry for unlimited enterprise email). Downloadable Mobile Apps were already available for Symbian, J2ME, Windows Mobile and Blackberry, but never have they been hotter than they are now on App Store and App Market. The Winners: Apple and Google (and even Blackberry to a certain extent). The Losers: Nokia, Sony Ericsson and Windows Mobile. The short-term winners, long-term who-knows?: The Service Providers that are cashing-in the flat fee Unlimited Data plans, but sacrificing their chances to ever control again the Mobile Internet as they did before.

2) Cloud Computing.
Amazon Web Services, Google App Engine, Google Apps, IBM “Cloud consulting”, or Google releasing Chrome to run complex apps on the browser at full speed, have made headlines in 2008. Startups such as Animoto run on Amazon’s cloud to enjoy flexible on-demand computer scalability (no wonder Amazon is also an investor in Animoto). The hype is such that these days everything is getting cloudy (or re-defined as cloudy) : GPS navigators face competition from the clouds with Google Maps (maps run on the cloud, with real-time info update and interactive recommendations/ads). Even speech recognition now runs in the cloud with Google Mobile App. The Winners: Google getting us to spend more time online, pioneer Amazon that gets economies of scale, and the IT vendors, such as HP or IBM, that will equip clouds. The Losers: Microsoft, for the moment. SaaS running on a browser make the OS less relevant. The catastrophe of Vista has only help the Cloud cause with enterprises eager to consider alternatives. Microsoft is building huge data-centers and will be a big cloud player too. For the moment, the cloud will put pressure on them.

3) Internet TV.
Hulu has brought national broadcast TV shows to the Internet. YouTube has confirmed the revolution of Internet Video, now well into the mainstream. YouTube not only is reaching agreements with content owners to be an ad-based platform for content distribution, but it has been a huge platform for politicians for the US 2008 presidential campaign, and now for President-elect’s change.gov. Not to mention the new habits of kids to search YouTube for information instead of searching Google. The Winners: All of us that now have virtually unlimited video content, including old-time TV jewels, just one click away. The Losers (yet to be confirmed): Broadcasters that will cannibalize higher CPMs revenues of traditional TV, with much lower CPMs prices in the online world. The effect is still small but innovative models will be needed before the cannibalization goes too far.

4) Wireless Broadband. With HSDPA or EVDO widely deployed, the 3G networks are now beginning to deliver on past promises. WiMAX has also seen in the past twelve months many commercial launches, and will play a key role in emerging markets where fixed broadband is not a financially viable option. The Winners: Mobile Operators that will get an additional source of revenues selling Mobile broadband, and opening the door to Machine2Machine applications taking advantage of ubiquitous wireless connectivity. The potential losers (not yet): Fixed Operators will need to keep fixed broadband ahead in terms of performance, to avoid substitution by wireless. Mobile Operators will lose too, as their hopes to make Mobile Internet different from fixed vanish.

5) Netbooks.
Asus EEE PC has been followed by most laptop vendors (supported by Intel low-power low-cost processors such as ATOM)  to bring a new class of 1 kg laptops with less than 9″ screens, ideal to enjoy full Internet on the go. Combined with Wireless Broadband, these low-cost laptops are not only a great companion for road-warriors but also are likely to power Internet access in many emerging countries as an affordable PC solution. The Winners: Millions of new Internet users worldwide, as well as Internet addicts. Flash memory manufacturers. The Losers: High-end lightweight laptop makers, that will face competition from low-end machines with enough power for everyday use. DVD/CD writers and disc makers, with discs replaced by memory cards and the disc writer by a card reader.

Is Chrome Enough to Kill Windows?

Megabytes and megabytes of commentaries after its launch are setting yet one more record on top of Chrome’s top speed marks of one percent market share in one day, and fastest ever browser.

Most analysis agree that Chrome is aiming at Windows, and not to Internet Explorer. Together with Gears, Chrome’s performance is a huge step forward in making the browser the platform where applications run, making the OS less relevant than ever. For developers, applications can be made independent of the OS, saving programmers from the hassle of porting to different OS platforms. For users, it brings the freedom to choose any OS as long as it has a browser, without fearing applications will not run if they do not choose Windows.

And applications keep moving to the cloud . Although I still use Vista for my home desktop PC, I already trashed Outlook and Thunderbird, replacing them with Gmail superior and convenient web interface. I currently use more Google Docs than OpenOffice to work with documents and spreadsheets. I am considering to get a netbook and my choice might well be Linux.

Still, many heavy applications, specially those media intensive as video/photo editing or high resolution games, will take a while to run on a browser, much less online from the cloud. So we can not discard the OS too quickly either. Windows still commands more than 90% market share, despite slowly eroding. If Google really wants to kill Windows, it will need to do more than Chrome, and a Google-supported Linux distro would really hurt in Redmond.

Bezos on Amazon Web Services

Om Malik got an interesting interview with Jeff Bezos, Amazon CEO.

Bezos explains how they worked tough at Amazon to develop a hard interface between their network engineering group and their applications programmers group. Once they had architected a set of APIs for their platform, Amazon thought why not make it available to others and create a business out of it. And so Amazon Web Services was born. Amazon is already a web-scale application, so they have the expertise to run a powerful robust platform.

But Wall Street does not like companies diversifying in businesses too different from their Core. And Amazon business, by the books, is retailing. The stock market has accepted well all line extensions from selling books, to music, to DVDs, to electronics, to watches, and basically to anything that can be retailed. Amazon is a huge retailer for almost anything that can be sold on-line. Their knowledge of their customers, the ease of use, their powerful recommendations and the greatest buying experience you can get on-line are Amazon’s core assets, from a Business academic standpoint.

But the truth is technology and innovation are also Amazon’s Core Competencies, and Amazon would have never been the biggest retailer on Earth without excelling at creating such a great on-line experience through great software and a high-performing web platform. All this technology was developed by Amazon and was vital in achieving differentiation from Barnes&Noble and others. So making this unique expertise in web platforms a new business by itself is just another way to monetize one of Amazon’s competencies.

Wall Street will still argue that retailing is a low margin business, while selling software and services is a high margin one. Wall Street would surely prefer an spin-off of AWS. With the hype on Cloud Computing, it could even allow Amazon to cash-in on the buzz by floating a small percentage of their Web Services unit.

Knowing Bezos, he might prefer to go his own way regardless analysts, and demonstrate with hard facts that he was right to bet on Web Services new business.

In the Clouds

Cloud Computing is a fancy term these days that applies to many different things. Concepts such as Software as a Service (SaaS), On-demand Computing, Utility Computing, Managed Services or even older ones as Hosting or Outsourcing, seem to all fall under the Cloud buzzword.

The basic concept is that the Cloud provides IT infrastructure (processing, storage, database or applications) on-demand, on a pay-per-use basis. The most renown examples of Cloud Computing are Google App Engine and Amazon Web Services. Microsoft recently launched Live Mesh, enabling users to upload files, folders, and sync PCs and devices info through the Live Mesh cloud. Web applications such as Salesforce.com or even Facebook, are often referred as clouds, providing SaaS, and Facebook giving APIs to develop applications. Even the recent HP bid to acquire EDS, has been tagged as a move to reinforce HP position in the Cloud market.

A vivid example of what Cloud computing can represent for an online startup can be found in NYT’s article Cloud Computing: So You Don’t Have to Stand Still.

[…] Animoto, an 18-month-old start-up in New York that lets customers upload images and music and automatically creates customized Web-based video presentations from them; […] earlier this spring about 5,000 people a day were trying it.

Then, in mid-April, Facebook users went into a small frenzy over the application, and Animoto had nearly 750,000 people sign up in three days. At the peak, almost 25,000 people tried Animoto in a single hour.

To satisfy that leap in demand with servers, the company would have needed to multiply its server capacity nearly 100-fold, says Stevie Clifton, 30, a co-founder […]. But (they) had neither the money to build significant server capacity nor the skills — and interest — to manage it.

Instead, they had already worked with RightScale, a cloud services firm in Santa Barbara, Calif., to design their application for Amazon’s cloud. That paid off during the three-day surge in growth, when Animoto did not buy or configure a single new server. It added capacity on Amazon, at the cost of about 10 cents a server per hour, as well as some marginal expenses for bandwidth, storage and some related services.

The example illustrate the opportunities that Cloud Computing represents for entrepreneurs for prototyping applications with little investment. Startups can launch without the risk of being killed by success, as they are able to easily adapt IT infrastructure capacity to their growth. See “Cloud” price lists from Amazon and Google below:

Amazon Web Services pricing in USA:

    Storage
    $0.15 per GB-Month of storage used
    $0.100 per GB – all data transfer in
    Data Transfer
    $0.170 per GB – first 10 TB / month data transfer out
    $0.130 per GB – next 40 TB / month data transfer out
    $0.110 per GB – next 100 TB / month data transfer out
    $0.100 per GB – data transfer out / month over 150 TB
    Requests
    $0.01 per 1,000 PUT, POST, or LIST requests
    $0.01 per 10,000 GET and all other requests*
    * No charge for delete requests

Google App Engine provides 500MB storage and up to 5 million pages per month on the free package. ReadWriteWeb discloses that App Engine price will be:

    $0.10 – $0.12 per CPU core-hour
    $0.15 – $0.18 per GB-month of storage
    $0.11 – $0.13 per GB outgoing bandwidth
    $0.09 – $0.11 per GB incoming bandwidth

The old promise of Outsourcing to convert CAPEX into OPEX is now at the service of the entrepreneur. Clouds can be a true engine for innovation.

Picture: Ricardo Carreon