As the clouds change …

This is going to take a few paragraphs to set up, to please bear with me.

One of the harder aspects to building a business atop someone else’s platform is a fundamental dependency upon them that you create. Your business depends, to a very large extent upon their good will, and their desire to grow an ecosystem.

Every now and then you get more predatory platform providers. These groups like to take control of larger segments of ecosystem, and provide a product or service that gets harder for others to compete with, because, in part, they are naturally disadvantaged in doing so.

Microsoft was the poster child for this in the 80s and 90s. Their mantra of DOS isn’t done until Lotus won’t run (and there is irony behind this link that is not lost on me). They’ve done this to other segments with Wordperfect, and many many others.

They aren’t the only large company deciding it wants what others built as a market. Note, this isn’t a bad thing in and of itself, but there is a fundamental issue of leveraging of power over rivals, when you decide to compete with someone using your platform.

In the world of the cloud, the provider you work with matters, as if they see you building something of possible value, and then decide they want that, they can make their platform more workable for them, and less workable for you.

Case in point. Netflix uses Amazon. Netflix is a streaming movie/tv rental service, that provides on demand entertainment for a reasonable monthly price. They also have a DVD version of the service (that preceded the streaming side), but thats not the business that I am focused upon.

Netflix built a streaming server atop Amazon EC2. Amazon (and many others) noticed. The business model was relatively simple. All you need is a massive set of servers, some clients, a billing interface and …

So Amazon decided to compete with its customer. This is not a value judgement. Being good business people, they saw the market, realized that they had the platform they could monetize easily for this, and decided to do that.

Again, I am not being judgmental about Amazon. But they went from supplier to supplier and competitor. As you can see from their chart on Google (click on 5 year), this competition has been rough for them.

This is something that every entrepreneur should be concerned about, building something of potential value upon a platform you don’t have control over. If you don’t make it easy to move to other providers, and in fact build that into your system, you could wind up tightly tied to those whom are supplying you with a critical component of your basic service. And if they fail to do well by you

What is interesting to me is that seems to be the commercial equivalent to the emergence of hydraulic empires.

Now that I’ve supplied the background, lets get to the meat of the post.

Amazon, today, announced the free availability of tools that can enable customers to do what other entire companies have set themselves up to do. And again, this is not a bad thing, and I’d argue it was a natural progression for Amazon to want to control more of the stack.

But this places good small companies that provide similar services at risk … specifically those who use Amazon EC2 as their primary cycle provider.

Which should be a good strong prod to them to start looking at alternatives (think Joyent, Rackspace, etc.). Despite protestations I occasionally hear from others, Amazon is not the cloud. It is a provider of cycles, and a good one at that. But its not the only choice out there.

With this said, mebbe some of our friends at places like Cycle Computing will look more strongly at Joyent and other offerings, and build their value atop a wider range of choices. And make those choices transparent to end users. That would be better for them in the end, as one could set up cloud computing systems on demand based upon market and data conditions.

The only real hard part in this is data motion, storage and replication. This has also not been solved by/for Amazon. Big data takes a long time to move. Data motion is still non trivial. And that is what is likely to tie one computing system to a particular platform.

I see an opportunity here, begging for a solution. And I think we have one.

Stay tuned.

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