larry ellison on cloud computing

Ran across an interesting video where Larry Ellison rants about the use of the term “cloud computing”. To some extent, I agree with him, insofar as “cloud computing” is a rather vague, all-encompassing statement.

It is also true that companies such as and others have been offering their services for quite some time, and are lumped in when most folks talk about cloud computing.

However, where I perhaps disagree with Mr. Ellison (FWIW) is that cloud computing doesn’t describe anything new at all. I think the relatively new element that cloud computing describes is the use of virtualized systems that allow for the use of hardware infrastructure over many disparate computers (or other devices) in a seamless and scalable manner.

Thus, for example, while may have been around for a decade, Amazon AWS, Microsoft Azure and other infrastructure service providers, as well as the type of technology that enables them (e.g. vSphere) are relatively new. Sure, there were always shared servers available, but until recently, I don`t know of anyone who, as a service provider, offered highly reliable and very scalable virtual private servers on levels exceeding what could be offered in a single box. If you wanted something like that, then the only thing that would be available were separate discrete boxes, proprietary clustering systems, or open source cluster systems (like Beowulf).

For SaaS, frankly it doesn`t really matter all that much – who cares how manages its back-end, so long as its customer are able to access its functionality.

The Exciting World of Licensing Metrics

OK, off the policy/opinion track for a moment, and on to more technical stuff. Most of you will probably consider this topic rather dry, but it is something that lots of folks in the tech industry do think about (and should think about).

Just to quickly summarize, the article speaks briefly to the various types of metrics that can be used to price software, and the complexities that have arisen given things such as multi-CPU computers, multi-core CPUs, virtualization technology and clustering technology. Anyway, the article is a bit of a sales piece as it concludes that the answer to all the complexity is, of course, how the author’s company is doing it:

Subscription pricing models have become increasingly popular in the past few years. Open source software companies typically charge for support on an annual basis, rather than for one-time software licenses. But those contracts are still often based on the number of processors involved, leaving CIOs in the same bind. For our part, we at Sun want to simplify pricing and planning even more: Subscriptions for software are still actually subscriptions for support, as Sun’s software is now free and open-source. But pricing is based on the number of employees a company has. To simplify how to determine what that number is, we base it on what the company reports annually to the Securities and Exchange Commission (SEC).

Nothing super new but worth a bit of a read, particularly if you’re a software developer thinking about pricing models.

My $0.02: This works fine for established, cashflow positive businesses, but of course smaller shops very often look at big upfront initial license payments as a type of financing – moving to a subscription model does of course impact this. Yes, I know, sort of stating the obvious. Then again, that does bring up the interesting question of capitalizing subscription/maintenance payments… But that’s a topic for another day…
The Software Licensing Debate, Round 2 – Weigh In – weighin – CIO