Tuesday, February 24, 2015

Revolutionary Cloud Computing e-books from Tim Chou

If you don't understand cloud computing, you are not alone

Let's assume you are not a developer.. You don't know what the words DevOps means. You have heard about containers, Docker. You have heard about Cloud Computing. You have heard of AWS, Azure, Rackspace. You hear every single large company from IBM to Ericsson planning to offer cloud products and services

Although you may be ignored and relegated to shut up at any Docker meetup, you are a very important person. If you can understand cloud computing, you may become an advocate. You may become a customer for cloud. You may be an influencer for future IT strategic decisions, as C level executive or a venture investor..

As the end, you may be the one who has the budget to fund,  hire and pay best the very engineers and coders, who are talking at a meetup where you feel you don't belong.

This is an expanded explanation of what I wrote in my previous blog Enterprise Cloud Adoption. Why is so slow? 
The great majority of organizations did not adopt the cloud yet, because there is still a challenge to understand what cloud is.  All we have is a cacophony of messages. there is absolutely no one who can implement a cloud in an enterprise as easy as 1, 2, 3
You are not alone

Who is Timothy Chou?

When writing the previous blog, I discovered Timothy Chou. Vince Vasquez , Cloudbook CEO introduced Timothy's new e-books about Cloud .

Timothy  began working for Larry Ellison as President of Oracle On Demand in 1999. long before the word cloud was in vogue. Oracle may be a controversial company, but what they do well is maximizing revenues through solid business models.After  leaving Oracle he returned to Stanford University, where he taught introductory computer architecture for 15 years, and started the first class on cloud computing. Michael Dell follows him on twitter.

Timothy is the man we were waiting for: He explains" the fundamentals of cloud computing, without using fancy, technical buzzwords and by incorporating plenty of real world examples. It begins by describing the seven fundamental software business models at play and then describes each layer of cloud computing."

Fig. 1: Model Seven from Cloud Fundamentals, by Timothy Chou

The Model 7 is not similar to AWS, or Rackspace:
Model Seven is the model in which all consumer application cloud services live. ...
In other words, I don’t charge you directly for the usage of Amazon.com or eBay or Twitter or Facebook or Google. Instead I monetize with ads, which is obviously the case with Google and many others. I can also monetize with transactions like eBay and PayPal. Every time you buy a book at Amazon you can think of it as inverted meaning because you’re actually paying some part of that to use the Amazon.com software.
All of these have been developed purely as cloud services
This outlook for understanding the cloud business model is brilliant. It can create habits and the desire in customers to pay significant amounts of money. It is easy to understand.

What is wrong with AWS?

Nothing for Amazon itself. But the new customers who came there because they are not willing to learn the labyrinthine AWS secrets can become an easy prey.

Don't even try to explore AWS pricing system . GIGAOM RESEARCH has a research report recommending a Gravitant a company offering products and services just to Get a grip on AWS pricing changes

The blogger Nir Eyal explains how can you overcharge for services via UIs  using a subtle psychology.
First, users tend to take the easiest route; they do whatever requires the least amount of physical and cognitive effort. ... Picking a preloaded amount is simply easier 
 These systems also make it easier for customers to let go of their money. In another sense, they eliminate what Duke Professor Dan Ariely calls the pain of paying. Ariely states, “The agony of parting with our money has to do with the saliency of [seeing] this money going away.” In other words, the less real money feels, the less painful it is to spend and subsequently, we spend more of it.

 The rule of thumb

According to Professor Chou
... the cost to manage software is about four times the purchase price of that software per year. If you pay $4,000 for the software, you’re going to spend $16,000 per user per year to manage the security, availability, performance, and change management required for all the infrastructure running under the application.
.... For those of you who are having a hard time believing this, just go talk to any CIO of any major corporation and they’ll tell you they spend 80-85 percent of their budget managing the existing portfolio of applications and software

Where to buy the new e-books

I like the format of the e-books
Fig. 2: Watch, Read Tell
for each topic, you can watch a video average 3 minutes  to 5 minutes maximum. You can read the text. Or you can use the slides to tell the story to others.

Perhaps these e-books are not perfect. But they are the best I have seen so far. It gives you the basis to go to a Cloud developers meetup, stand up and ask them:

"Excuse me Sir. This is nice, but what is your business model?"
Fig 3: What goes in to create revenues? This is the question.

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