In our previous post, A Silent Revolution in the Information Technology Industry we observed that the cycle time to implement and deliver a business application has been steadily decreasing over the past fifty years from several years at the dawn of computing to a few weeks or faster today.

This acceleration of delivery by two or three orders of magnitude is a byproduct a rapidly evolving and maturing current IT infrastructure.

The acceleration comes from the use of pre-built components and our ability to schedule data, applications and compute engines separately, sourcing these resources to the places and methods of lowest cost. We also discovered that this phenomenon is not unique to IT.  Most mature industries have become service integrators taking advantage of pre-existing services. In the example of our previous blog entry,  it would be foolish a car insurance company wishing to build national coverage to start building a network of car repair shops.  Car insurance companies avail themselves of existing car repair shops, and it would be preposterous to think otherwise.

Yet when we think about IT for a large organization, we don't think twice about hundreds of millions of dollars spent in vertically integrated infrastructure, tens of thousands of square feet in huge data centers housing thousands of servers, many of them performing no more than file serving functions and most of the time woefully underutilized.

Under these circumstances it is no surprise that in spite of the proliferation of outsourced services in the past ten years or so, IT is still primarily a privilege for large organizations.  It could be argued that this state of affairs is a side effect of the large granularity of IT resources:  A 10-employee business may not be able to afford to purchase and maintain a collection of servers, each one dedicated to an application and the associated in house expertise.

Cloud computing is changing the dynamics of application integration and delivery very fast.  Service providers in the internet are beginning to offer fine grained services that obviate the need of a large up front capital investment by service consumers:  it is no longer necessary to purchase a complete server for data storage even if only a small fraction is used.  Storage can be rented fromthe cloud by the gigabyte per month.  Virtualization has made it possible for service providers to offer a fractional server for rent for much less than what an in house physical server would cost.

The benefit accrues not only to end user service consumers.  It is lowering the cost for new service provider entrants in the market addressing niches that were not profitable before.  The Mozy backup service and the Pi Corporation data presence services, recent acquisitions by EMC constitute examples of this new trend.

A consumer may pay just a few dollars a month for a cloud based storage service.  This is an example of an IT service scaled down to the consumer market.  Instantiating a service takes just a few mouse clicks and a credit card or a Pay Pal funds transfer.  Compare this process with the status quo of an "in-house" deployment:

The poor consumer is required to research trade publications and the Internet and identify a suitable backup product.  The consumer purchases the product from a software vendor and installs it in the target machine.  Once installed, the consumer is required to follow an onerous regime of regular backups.

Even when the backups are scheduled the user needs to be aware of a number of contingencies, such as ensuring the machines are up and running at the time of the scheduled backup, and if the backup is done to a network shared drive, to also ensure that the connection is in working order and that the target machine is up and running.

If the unthinkable happens and there is a problem with the primary drive, some consumers may not have the expertise to perform the repair and recovery and may need to hire a technician at significant cost.   Even with this hired expertise, horror of horrors, the consumer may find out in this dire moment that backups are missing or done improperly leading to partial or total data loss.

What is wrong with this picture?  First, the end user is being used as the point of integration for the IT process.  We have come to accept this situation in an IT context by sheer habit.  It would be unacceptable in any other context: would a customer hire a taxi that requires the customer to drive the vehicle?

In our next post we will use a constructive proof of how to build a consumer backup service using more primitive component services.

Using a similar approach, the lowered integration services will not only benefit the consumer end user, but also will create opportunities for service delivery in emerging markets.  The fine grained component resources that the cloud makes possible, will enable a new generation of service providers in these markets delivering services specifically tailored for these markets.  The potential economic benefit of this new paradigm is potentially enormous.