Cusumano’s view – Cloud Computing and SaaS as New Computing Platforms.

Cusumano, M. (2010). “Cloud Computing and SaaS as New Computing Platforms.” Communications of the ACM 53(4): 27-29. http://doi.acm.org/10.1145/1721654.1721667
This is an interesting and well argued analysis of the concept of Cloud and SaaS as a platform. The paper concentrates on the lock-in and network effects and the risk they pose given the dominance of certain players in the market, in particular Salesforce, Microsoft, Amazon and Google.
Direct network effects (that the more telephones people have the more valuable they become) and indirect network effects (the more popular on platform is for developers, the more attractive the platform for other developers and users) are key to understanding the development of Cloud. Central to the articles potential importance is the analysis of how intergrated webservices (and thus integrated software platforms) might create conflicts of interest, network effects and hence risks.
Cusumano’s anlysis of Microsoft’s involvement in the market is compelling (particularly given his history in this area and detailed knowledge of the firm).
I do worry however that the papers exclusive focus on current players (and hence the interest in traditional concerns about network effects and dominance) downplays the key role of integrators and small standardisation/integration services which are emerging with the aim of reducing the impact of these network effects. Unlike traditional software  (where the cost of procurement,  installation, commissioning and use is very high) the mobility between clouds is easy if the underlying application is Cloud-provider-independent. This means there is considerable pressure from users to develop a cloud-independent service model (since everyone understands the risks of lock-in).
The future might thus be an open-source platform which is wrapped to slot into other cloud platforms… a meta-cloud perhaps.. which acts on behalf of users to enable the easy movement between providers. This is something Google is keen to stress at its cloud events.
I look forward to seeing the book on which the article is based

One thought on “Cusumano’s view – Cloud Computing and SaaS as New Computing Platforms.

  1. When you want to set up a cloud, it’s important to know how to do this correctly. There are lots of cloud services out there that will tell you how to set up a cloud and give you storage. However, you have to ensure that all of your needs are being met.

    Like

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