Book review Customers should store all their data in a bottomless cloud because that data can be used to generate new business with a value exceeding its storage cost. So says David Friend – who runs a cloud storage service company.
Friend, CEO and president of Wasabi, and ex-CEO of Carbonite, worked with Thomas Koulopoulos, chairman of futurist think tank the Delphi Group, to pen The Bottomless Cloud, a 64-page e-book.
The authors argue that businesses should embrace an abundance view of data instead of a scarcity view and become data-driven. That’s the way the world is going and those who fail to adapt to this new paradigm will end up in the dustbin of history.
The Big Switch revisited
Friend and Koulopoulos use the history of electricity generation to draw an analogy with developments in IT.
Companies originally supplied their own power, then bought it from all-in-one utilities and now are buying it from a more efficient disaggregated supply chain.
Likewise, until recent times companies computed and stored data on-premises. But this is not a core competency and companies are bad at doing this. As a consequence, all-in-one cloud suppliers such as Amazon, Microsoft with Azure, and Google,have sprung up, offering to do it better.
And they do, in this Cloud 1.0 model, but at a cost of customer lock-in and by deploying the same scarcity of resource model as the on-premises era. Computing and storage cost serious money and have to be rationed. Just like, the authors say, long-distance telephony was once rationed by cost.
Today telephony costs have dropped, the rationing has effectively ended and the networking benefits of communication are taken for granted.
So it is, or should be, with data storage.
The authors do not trot out the argument that data is the new oil. Data is not a commodity – unlike Storage- because data is valuable to and pretty much unique to each individual business. This is unlike an electrical watt or volt or drop of oil which is the same as every other watt, volt or drop of oil.
Storage costs should fall because users can then move to an abundance model of data instead of a scarcity model. Cloud 2.0 embraces an abundance model, and the authors proclaim this will lead to a “bottomless cloud” era.
They say Cloud 1.0 uses a scarcity mindset to build external economies of scale. Cloud 2.0 uses an abundance mindset to build economies of scope. This is a neat insight.
Economies of scope
Economies of scope “create a digital ecosystem in which companies can easily connect to and expand into adjacent markets and new business models. Companies that compete based on economies of scope are obsessively data-centric.
“One of the best examples is Nike, which has transformed itself from a provider of sneakers and clothing into a lifestyle and fitness company that is intimately linked to technology and healthcare vendors.”
Friend and Koulopoulos say digitisation is a first step. The next is datafication, which they define as “the wholescale transformation of the business model by rebuilding the business around the data. And this is not only transactional data and documents, but the much larger treasure trove of behavioural data that is suddenly available.”
The authors add: “The objective is to adopt a mindset of abundance and keep as much data as possible available for as long as possible. It’s what some Cloud 2.0 providers call “Hot Storage,” implying that all data is equally accessible and potentially valuable.”
A storage service supplier would say that
A storage service supplier would say that, wouldn’t they! It is all very well to advocate an abundance model because the more you store the more you pay. The money incentive flows mainly one way.
The authors reject this thinking and argue this data will unleash new business models and revenue flows. Here are some of their thoughts.
- In an era of abundance, the value of data is in how much of it you can capture and mine; the greater the volumes, the greater the potential value.
- New business models are emerging that rely on nearly unlimited storage to spur innovation and uncover new opportunity.
- We are firmly of the opinion that businesses using on-premises and Cloud 1.0 solutions are anchoring themselves to the past.
- For organizations that live and die based on their ability to innovate products, services, and business models, the choice of Cloud 2.0 and the eventual movement to the bottomless cloud is essential.”
- To be clear, we see the Bottomless Cloud as a mandatory rather than an optional change in the way data will be stored and managed, and how it will impact the success of every business.
There’s more in this ebook, such as the notion that people and devices will have digital twins describing them and enabling realtime predictions to be made about their behaviours.
And then there are the gee whiz extrapolated statistics; “By 2100 there will be 100 times as many computing devices as there are grains of sand on all of the world’s beaches, and every one of those devices will be churning out data.”
If you find you have an odd half-hour then download and check out this Wasabi-Delphi ebook about the cloud with no bottom.