I am fascinated with the next bubble and think it’s ironic that the name is so bubble-esc. While Cloud computing is definitely a milestone in the evolution of an IP based world, it also represents the same pitfalls of all previous Internet based markets. Of course, Pitfalls should be expected in any market that is projected to be $95B by 2011 (according to Merrill Lynch analysts). Lamont Wood does a good job of covering the high-level issues surrounding cloud computing.
Like it’s predecessors, cloud computing has started off with a fuzzy definition of what the market really is. $95B is a huge number and is not an entirely new market. While the service fees associated can be thought of as new, they actually are a shift of economics away from owner/operator. The servers, application licenses, development, rackspace, backbone and access charges are already well established markets in their own right. However, much of what comprises the traditional Internet and Networking space is now being dressed up in a fancy new outfit and tagged as part of a $95B (not new!) market.
I hope investors will get this. The world did change on the day that IP connected government labs and universities. A new market was born the day Mozaic first supported images and graphics. Unbelievable value has been created through the build-out of IP based infrastructures and the development of amazing applications. I make my living because of the Internet, its value is very real to me. It is now a luxury to spot the mistakes of the past major market trends of web 1.0, mobility and recent web 2.0 hype. These painful lessons should provide a solid platform upon which new value and business opportunities may take off into the clouds. It’ll be fun to follow.