It may be no accident that in the last week of the year’s first quarter there were so many significant moves by big companies, particularly in giant systems of connected computers. Cloud computing and the Internet of Things, these moves suggest, are moving from their rough pioneering days to something bigger and more stable.
To consider just a few of the biggest moves over the week: Google harmonized its cloud computing business to a single entity, with a pricing model intended to hold customers by enticing them to build ever cheaper and more complex software.
Cisco announced it would spend $1 billion on a kind of “cloud of clouds” project. Later in the week it was part of a consortium of big multinationals that will set engineering standards for wiring people, machines and computers together in large industrial settings.
Microsoft’s new chief executive made his first big public appearance, offering Office for the Apple iPad, partly as a way to sell more of its cloud-based Office 365 product. Intel announced a big investment of money and technology in Cloudera, a move that establishes a clear leader in the business of doing big data analysis in the cloud.
At a user conference in San Francisco, Amazon Web Services announced the general release of its cloud-based desktop computing business, as well as a deal with Infor to offer cloud-based enterprise software tools to industries like healthcare and manufacturing.
None of these were impulsive, breaking announcements. Rather, they were more like deals that were first hatched in late 2013 as strategic plays for the coming year. And, at the end of the start of 2014, the bets have been placed.
Some of these, like the moves by Cisco, Microsoft and Intel, seem like efforts by incumbents to catch up with the times. (if that sounds like criticism, consider the alternative.) Others, like the announcements by Google and A.W.S., further develop cloud computing. The consortium deal tames its next step by establishing practices.
What all of them do is admit that cloud computing soon will not be another business. It will be a part of almost every business, probably one that continues to grow.
“What is surprising to us is how long it took,” said Adam Selipsky, vice president of marketing at A.W.S., the biggest company in cloud computing. “This is a multi-trillion-dollar opportunity. We assumed from the beginning it was unlikely we’d be the only participant.”
A.W.S. began in 2006, and already takes credit for enabling the creation of businesses like Airbnb, which is taking on the hotels business; Spotify, doing the same to music; Dropbox, a challenge to traditional data storage; and Pinterest, which disrupts things like tearing pages out of catalogs and sharing them. With most everyone on cloud computing, there should be more of that, from AWS and other cloud outfits.
Established companies like Netflix, Kempinski Hotels, and the Australian bank Suncorp have or are in the process of primarily running their business on A.W.S. Charles E. Phillips, the head of Infor, said his company is “essentially going all in” on a cloud-based enterprise software strategy, changing its compensation to sales people and offering to take all of a customer’s data over to A.W.S. from their existing computers for $55,000.
“Friends don’t let friends build data centers anymore,” he said. That’s likely to become a common view, though companies like Cisco still back the idea that private computer centers will remain important for a long time.
Mr. Selipsky saw the market changing from start-up curiosity to established practice in other ways. “We’ve seen a huge interest from educational institutions in teaching a cloud curriculum,” he said. “There’s demand in computer science and engineering departments in skills like building applications on inexpensive commodity hardware,” with abilities to grow globally fast.
That twinge some feel at times like this is akin to seeing the fences go up on the frontier, the record companies signing your favorite underground band, or the parents coming down to the basement party just when it was getting good. We may be past the wild part, but there’s far more potential with this inevitable outcome.
If you do feel that way, don’t worry. This is also the week that Facebook made big investments in virtual reality and solar-powered drones that send high-speed data. A representative from Google gave a talk at the University of California, Berkeley, about Google’s experiments in quantum computing that was cautiously optimistic, but not conclusive. Some disagreed.
There’s still plenty of frontier out there for everybody.