Sun Among The Clouds

Technology industry forecasts are an interesting exercise. I find it somewhat similar to “science fiction”, only that industry forecasts gauge a shorter capitalist term, and they are more analytical (less fiction for the Board of Directors, Investors, and Stakeholders).

Back in January this year, as part of an ongoing hacker[1] community discussion at Hacker News, I made a forecast that “around 2009 Q3, the tech industry will be the first to recover from the downturn (before real-estate or auto).” That may seem unrealistic at the moment, although technology innovation and entrepreneurship is evolving. A recent NYTimes article also reaffirmed this trend, as many laid-off folks are doing startup’s, which is a great sign.

What I also predicted in that HN discussion was that “a new product/service will be released by Sun or IBM, that will gain major traction among the hacker community.” And that does seem to be taking shape, with the conjunction between two technology giants — IBM Corp. and Sun Microsystems. IBM is in talks to buy Sun in a bid to add to their Web heft. It does make sense — in terms of their business and technology landscapes. But what surprises me is Sun’s new mantra of calling itself a “cloud computing” company. I feel it comes a little too late, from a company that was at the forefront of networking computing just a decade ago.

Will Sun be able to make a dent in the cloud computing space? I have my doubts. Not that Sun is technically incapable in any way, but I don’t think the business execs at Sun understand cloud computing from a hackers perspective. The real market for cloud computing is among the hacker community. Hacker’s build technology startup’s, and most modern-day technology startup’s need the power of cloud computing for on-demand scalability as part of their SaaS architecture. But hackers also need far more flexibility and assortment in their cloud computing architecture, which is generally not seen with high-end players like Sun. Pricing is another critical factor among the frugal hackers. Also, competing against the likes of Amazon (AWS) and Google (AppEngine) in the cloud computing space will not be all that easy for Sun. Sun can very well cater to Fortune 500 companies, some of whom already have a Web-enabled infrastructure equivalent to cloud computing, but AWS and AppEngine are already in the process of aligning better to the needs of the hacker community.

There’s a brighter side to Sun’s cloud computing strategy for startups though. As Stacey Higginbotham wrote at GigaOm:

Both IBM and Sun are working with startups to build out an open cloud computing platform to connect a variety of clouds, from Amazon’s to GoGrid’s to internal clouds. Sun is already working with RightScale and Zmanda to offer cloud services and management for its cloud and others. Clark outlined a similar strategy yesterday on behalf of IBM, and mentioned RightScale and Aptana, as other providers of the management layer for the cloud.

How this alliance between IBM and Sun shapes up, and how it might change the cloud computing space remains to be seen.

Update (10 April 2009): IBM withdraws offer for Sun Microsystems. Deal collapses.

Update (20 April 2009): Oracle acquires Sun.

Footnote [1] The term “hacker” generally raises eyebrows, as someone involved in computer security/insecurity. But, the term “hacker” also reflects a programmer subculture mainly notable for technology innovation and the open source movement.

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