Innovation in Software

Over 2008 some remarkable technologies emerged quietly that seem to be gaining traction within the industry. Whilst around for years, I am confident their time is about to come proper.

If you were to ask most people on the street who the most innovative technology firm was of 2008, you are likely to see a familiar list: Google, Apple, maybe Microsoft or perhaps some of the smaller outfits that have crossed into the mainstream like Facebook or Twitter.

Few people will mention Amazon.

In fact, if you point out that Amazon is right now perhaps one of the most innovative technology firms on the planet, people will raise an eyebrow and ask “What? The online shop? Where I get my my books and DVDs from?”.

This typical reaction is perhaps caused by only industry participants having seen so far just how Amazon are disrupting the economics of doing business online. Now anybody can have access to infinite storage arrays, huge compute clouds, masses of humans to complete complex tasks and distribute content across the globe as fast as possible, all without a penny of capital expenditure: you pay only for what you use. You can even send your physical products to be stored in Amazon’s warehouse and they will for a fee handle order fulfilment for you, again only paying for what you use.

Capital expenditure is a start-up company’s biggest problem. Remove it and suddenly anything becomes possible in the start-up World. This is big. Very big.

The real beauty is perhaps the fact Amazon made this move originally to use their own infrastructure more efficiently. If Amazon has lots of spare compute capacity ready to serve pages during their busy season (the run up to Christmas), why not lease it out the rest of the year? And yet this strategy has started to offset their own infrastructure costs so much I wouldn’t be surprised if within a few years their operational costs tend towards zero. The most powerful e-commerce platform on the planet, and everybody else is paying for it for them.

This has caused people to sit up and notice. “The Cloud” is now the hottest buzz term in the industry and all players are trying to figure out a strategy to compete.

One of the issues is that Amazon’s infrastructure is not as simple to use as it could be. Plenty of firms see a gap to try and make things simpler: one of the biggest complaints about S3 is that you need to use custom APIs instead of open standards like SFTP or WebDAV; EC2 needs a more complex understanding of systems administration and data storage than traditional models; for many applications it’s overkill or too generic, and so on.

If you break the components needed for a web application into its constituent parts from platform and compute capability through to storage services, you realise that at each level there are numerous companies trying to find a place in this market from Google and Microsoft through to unknown start ups, some of whom are attempting to make access to other cloud services easier to use and therefore are some sort of “meta-cloud” service.

This is thought to be a paradigm shift in how developers think about developing and delivering applications, but what we have seen to date is likely just the tip of the iceberg. For a number of years now traditional engineering firms (notably Rolls Royce in particular), have realised substantial revenue growth comes not from product sales – competitors can easily counter advances in product development – but in services. It seems the computer industry is starting to cotton on, and companies like AMD are thinking about how to ride the Cloud hype into the services sector. Even Microsoft are considering versions of Windows that users pay for by the hour.

It is perhaps because these service revenues lock a user into a provider’s business that some point out the dangers but I believe in time we will allay such fears by changing how we describe, define and use cloud capacity: it’s perfectly possible for us to control our own data and rent storage and compute capability as we need it, perhaps without realising that is what we are doing, without surrendering our rights and privacy. It is not yet a trivial job to do so, but surely over 2009 we are likely to see services emerge that allow consumers to harness cloud concepts and capabilities without needing to understand the detail.

Ultimately though, the real benefit over the years ahead will be the possibilities these services offer the programmers wise enough to harness them: without the CAPEX requirements, the only limitation developers seem to encounter is that their imagination struggles to break free from the bonds that have dominated careers to date. It is hard after decades of worrying about RAM, storage and CPU limitations to have all them removed, or at a minimum re-shaped. This is the beginning – if we can struggle to imagine it – of something huge.

Service Level Agreements are a must-have for Enterprise clients and it has surprised me that so few web companies have used them as a route to making money: if you don’t need an SLA, take the app for free. If you do want an SLA (because say your entire email operation is running on our web service, say), then you need to pony up some cash. It’s worked in open source, so I think it’s a no-brainer for an industry that is service-orientated at its core.

Good news then that Amazon S3 has today announced an SLA which means if they drop below 99.9% uptime per month you can have some cash back. You get even more money back if they drop below 99% uptime. They also agree to give you 60 days notice if they want to get rid of you for any reason – but don’t have to give that reason.

It’s a step in the right direction, but they could make even more money by offering even better SLAs if customers are prepared to spend more money to get them. That money would be capital Amazon would be free to invest in infrastructure which not only enhances S3, but Amazon’s core systems and business.

Some time ago I setup an online bookshop with Amazon.co.uk and their aStore tool. It’s not had much love for the last six months, but I’m going to be putting a fair bit more time into it in the next couple of weeks. If you have any suggestions for products or books that should be featured, please let me know in the comments.

The observant will also notice that as of today, at the bottom of each post above the comments is a little ‘tag cloud’ of relevant Amazon products. Amazon’s algorithms are a little whacky at times, so it might take a while for genuinely useful products to show up. I’m tempted to change this into something more traditional, but I want to see how this new kind of advertising might work.

I also intend in the next few weeks to introduce a very small Google AdSense block onto individual story pages placed between the headline and the article body. If you’re reading this site through the feed – and if you can’t or don’t want to use a feed reader, you can now subscribe to feed updates via email using the form in the sidebar – you won’t see any adverts, ever.

These moves are just meant for the 11,000+ people who pass by here every year without ever stopping by again: they obviously didn’t get any value out of what I wrote, so perhaps somebody else can help them.

If people find these moves really intrusive, I’ll obviously reconsider them.