Tag: cloud computing

How much server space do Internet companies need to run their sites?

How much server space do companies like Google, Amazon, YouTube, Hotmail and Facebook need to run their sites?

“How much server space do companies like Google, Amazon, or YouTube, or for that matter Hotmail and Facebook need to run their sites?” is the question I’ve been asked to answer on ABC Radio National Drive this evening.

This isn’t a simple question to answer as the details of data storage are kept secret by most online services.

Figuring out how much data is saved in computer systems is a daunting task in itself and in 2011 scientists estimated there were 295 exabytes stored on the Internet, desktop hard drives, tape backup and other systems in 2007.

An exabyte is the equivalent of 50,000 years worth of DVD video, a typical new computer comes with a terabyte hard drive so one exabyte is the equivalent of a million new computers.

The numbers when looking at this topic are so great that petabytes are probably the best way of measuring data, a thousand of these make up an exabyte. A petabyte is the equivalent to filling up the hard drives of a thousand new computers.

Given cloud computing and data centres have grown exponentially since 2007, it’s possible that number has doubled in the last five years.

In 2009 it was reported Google was planning to have ten million servers and an exabyte of information. It’s almost certain that point has been passed, particularly given the volume of data being uploaded to YouTube which alone has 72 hours worth of video uploaded every minute.

Facebook is struggling with similar growth and it’s reported that the social media service is having to rewrite its database. Last year it was reported Facebook users were uploading six billion photos a month and at the time of the float on the US stock market the company claimed to have over a 100 petabytes of photos and video.

According to one of Microsoft’s blogs, Hotmail has over a billion mailboxes and “hundreds of petabytes of data”.

For Amazon details are harder to find, in June 2012 Amazon’s founder Jeff Bezos announced their S3 cloud storage service was now hosting a billion ‘objects’. If we assume the ‘objects’ – which could be anything from a picture to a database running on Amazon’s service – have an average size of a megabyte then that’s a exabyte of storage.

The amount of storage is only one part of the equation, we have to be able to do something with the data we’ve collected so we also have to look at processing power. This comes down to the number of computer chips or CPUs – Central Processing Units – being used to crunch the information.

Probably the most impressive data cruncher of all is the Google search engine that processes phenomenal amounts of data every time somebody does a search on the web. Google have put together an infographic that illustrates how they manage to answer over a billion queries a day in an average time of less than quarter of a second.

Google is reported to own 2% of the world’s servers and they are very secretive about the numbers, estimates based on power usage in 2011 put the number of servers the company uses at around 900,000. Given Google invests about 2.5 billion US dollars a year on new data centres, it’s safe to say they have probably passed the one million mark.

How much electricity all of this equipment uses is a valid question. According to Jonathan Koomey of Stanford University, US data centres use around 2% of the nation’s power supply and globally these facilities use around 1.5%.

The numbers involved in answering the question of how much data is stored by web services are mind boggling and they are growing exponentially. One of the problems with researching a topic like this is how quickly the source data becomes outdated.

It’s easy to overlook the complexity and size of the technologies that run social media, cloud computing or web searches. Asking questions on how these services work is essential to understanding the things we now take for granted.

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Selling old rope

Sometimes rebranding an old concept works in the favour of customers.

“Big Data is a fad” announced a speaker at a technology conference. “We’ve had Big Data for years. We used to call it business analytics.”

He’s right. The IT industry is very good at rebadging technology and the term ‘Big Data’ is just the latest of many examples — the best of which is how ‘cloud computing’ which is largely a rebadging of SaaS, Application Service Providers or client-server.

While it’s easy to be cynical about this IT industry habit, there is a valid underlying point to this repainting old rope — that the refurbished old string is cheaper and more useful than what came before it.

The problem for innovators creating accessible, cheaper and faster ways to do things is they risk that their product will be likened to the old, expensive and inaccessible methods. No cloud computing provider wants to be associated with IBM’s expensive client-server products or the flaky Application Service Provider of the dot com era.

Most innovations aren’t revolutionary, they have evolved out of an older way of doing things. So saying “it’s being done before” when seeing an innovative product may be missing the point.

In the case of Big Data the principles aren’t new but we’re collecting more data than ever before and the old tools — even if they could manage with the volume of information— are far more expensive than the new services.

So repainting old rope isn’t always done for purely marketing purposes, sometimes there’s a real benefit to the customers.

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Stranded markets

Businesses with old, declining markets are going to slowly fade away

“Stranded assets” are an accounting term for property that’s worth more on the books than it is in the marketplace.

Often the valuation problem has come about because of market, legislative or physical changes – what was a valuable and useful asset becomes isolated from the rest of a business.

Customers are biggest asset we have in our business – so what happens if our customer base becomes a “stranded asset”?

This situation isn’t far-fetched in a time when technology changes a marketplace – a blacksmith providing services to stagecoach companies would have been in this situation a hundred years ago.

In response to Are Businesses Fleeing the Online Space?, Xero’s Australian CEO Chris Ridd made some points about the problems MYOB have in the accounting software marketplace.

We see that going online to the cloud is finally allowing many small businesses the opportunity to avoid the “walk into Harvey Norman and fork out hundreds of up-front dollars on on-premise software” experience and instead go straight to the simplicity and cost efficacy of the cloud.

This is evidenced in our numbers and the fact that 40% of new customers signing up to Xero are coming from no software. (I mentioned last week at the NBN Forum that it was 30%, but we doubled checked and were staggered to find it was actually a lot higher). So we are creating a new market and cloud is therefore increasing the addressable market for accounting software. The cloud changes the economics of doing IT and makes automation of the business accessible and attractive to  a whole new category of SMEs.

Chris’ point is interesting – the new generation of businesses aren’t going to the computer superstore and buying box software. Which is a problem for those who sell box software such as MYOB and Harvey Norman.

What’s more, customers have moved away from those same superstores along with things like phone directories and classified ads, which is the problem companies like Sensis and Fairfax have to deal with.

A decade or so ago, MYOB, Sensis and Fairfax were dominant in their markets with a loyal band of customers. Today the remaining customers – many of whom have not changed their business plans for decades – are”stranded markets” made up of holdouts who won’t move to new technologies.

Those holdouts aren’t particularly profitable and they are slowly leaving their industries through retirement or, increasingly for these slow adopters, going broke.

Being dominant in a market that’s declining in both profits and sales is not the place to be for any business.

It’s difficult for the managers of these enterprises to move as their existing products are their core business, which is the classic innovators dilemma, but the alternative is to end up like Kodak or Sony.

One thing missed in the eulogies for Steve Jobs is how he overcame the innovator’s dilemma problem within Apple. When it became apparent the old Mac OS was a barrier to innovation, he killed it along with the floppy disk and Apple Device Bus.

Apple’s customers hated it as most of them had a substantial investment in the hardware which Jobs had made obsolete overnight. But almost all of them came back and became greater fans.

News Corporation are trying a different tack to Steve Jobs in splitting the operation into an “old” business and a “new’ business. That way the old business can find a way to make money or quietly fade away without affecting the newer, more dynamic entertainment and electronic arms of the organisation.

The challenge for MYOB – along with Harvey Norman, Fairfax and Sensis – is to move their customers to the new technologies, those who won’t go are the past and those stranded customers will isolate the business from the mainstream.

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Why would a plumber want a broadband connection?

A question that still bugs me from the Cloud + NBN forum this week is “why would a plumber want a broadband connection.”

It doesn’t seem so long ago that question was asked about mobile phones – in the early 1990s the question made sense as cellphones in those days were heavy bulky things that sat in cars. They were of little use to plumbers or anyone else except the executives and politicians who could afford them.

Today there are few plumbers who don’t have a mobile phone.

Why would plumbers want a broadband connection? Job scheduling, inventory management, stock ordering, quoting and invoicing are five tasks that spring to mind.

One of the big areas for all business is research and training. Keeping up with industry changes, particularly in fields where professional development is required to maintain your license or accreditation, is made far easier with online learning services.

For the plumber, being able to find out what’s new on the market and how to install or maintain the latest products keeps them in the marketplace.

Then there’s the necessity of being listed online – without a broadband connection the local plumber will struggle to keep up to date with the sites customers are using to find tradesmen.

Even asking the question “why should a plumber be online?” betrays just how many of us aren’t understanding how business is changing.

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Hanging on the telephone

Is there a digital divide appearing in customer support services.

Ever tried to call an online company about a problem? As the New York Times explains, it’s often hard to find the telephone number, let alone someone to answer your call.

The NY Times article worries a new type of digital divide is appearing between those happy to do business using email or social media and those who who demand to speak to someone.

In reality, the truth is more subtle than just generational differences – it’s about the web2.0 service-free business model where few, if any, resources are spent on customer support. The idea is the an assistance can be given out on “self service” basis through a website or, better still, crowdsourced on a user forum where the customers work together to figure out solutions themselves.

For many of the web based cloud computing and social media businesses, this model is essential to their survival. If you were to add a customer support department answering telephones, the viability of the business would collapse.

While it’s uncertain if that business model is sustainable for many of these web based companies, it’s interesting to ponder how many phone calls most businesses could avoid by having relevant information on their website.

It’s worthwhile looking at call logs and asking your staff what are the most common questions to your business. Answering those on the company web site might mean happier customers and fewer staff distractions.

For some businesses, letting customers discuss issues in an online company forum might be a way of crowdsourcing support and giving ideas for future products or service improvements.

Rather than leaving customers and staff hanging on the phone, having relevant and helpful information on the website saves everybody time and money.

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How much did Vista really cost Microsoft?

Microsoft Vista’s failure hurts Microsoft today.

Microsoft Vista was the company’s despised stepchild – released way past schedule, clunky, slow and disdained so much by the market that PC manufacturers started offering “downgrades” to Windows XP to attract customers.

Despite the embarrassment, Microsoft retained its position as the world’s leading software company and does so today. But Vista certainly did hurt Microsoft and today’s marketplace shows the deep, long term effects of that damage.

Research website Asymco earlier this week looked at the ratio of Windows PCs sold to the sales of Apple Macs over the last 30 years. The ratio peaked at 56 to 1 in 2004.

Today that ratio is 18 and when phone and tablet sales are added in, the ratio is approaching 1:1. Apple has caught up.

It’s no accident 2004 is the peak of the Windows-Apple ratio. In 2004 Windows XP had matured after three years on the market, the older computers running Windows 98 or ME (another hated operating system) were being retired and a new version of Windows – codenamed Longhorn – taking advantage of newer technologies and with improved security was due to be released.

On August 27, 2004 things started to change with Microsoft’s announcement Longhorn would be delayed two years. This effectively broke the product roadmap that underpinned the business models of Microsoft and their partners.

To make matters worse, Apple were back in the game with their OSX operating system well established and a steady stream of well designed new products coming onto the market.

For consumers and businesses one of the advantages Windows systems had over Apple was the cost difference. The “Apple Tax” started to be eroded by the company’s move to Intel CPUs which delivered economies of scale coupled an aggressive program of tying up the supply chain with key manufacturers.

Then Longhorn – now known as Microsoft Vista – was released.

Despite the cheerleading of the Microsoft friendly parts of the technology media, consumers weren’t fooled. The product was slow and buggy with a new interface that confused users. Making matters worse was Microsoft’s ongoing obsession with multiple versions offering different features, something mocked by Steve Jobs,  which further confused the marketplace.

Vista languished, customers decided to stick with Windows XP or to look at the faster and better designed Apple computers, and Microsoft’s market share started to slowly erode.

By the time Windows 7 was released Apple had clawed back their market position, launched the iPhone and caught the shift from personal computers to smartphones.

Probably the biggest embarrassment of all to Microsoft was the launch of the iPad, the market had been gagging for good tablet computer since the late 1990s and Microsoft’s partners had failed to deliver, partly because Windows XP, Vista and 7 didn’t perform as well as Apple’s iOS on the tablet form factor.

Microsoft’s completely blowing a decade’s lead in the tablet market is almost certainly due to the misguided priorities and feature creep that dogged Vista’s development. This is now costing the company dearly.

Asymco’s conclusion of Microsoft’s new market position is stunning and accurate.

The consequences are dire for Microsoft. The wiping out of any platform advantage around Windows will render it vulnerable to direct competition. This is not something it had to worry about before. Windows will have to compete not only for users, but for developer talent, investment by enterprises and the implicit goodwill it has had for more than a decade.

It will, most importantly, have a psychological effect. Realizing that Windows is not a hegemony will unleash market forces that nobody can predict.

Vista’s cost to Microsoft was great, it meant the company missed the smartphone surge, the rise of tablets and – possibly most dangerous of all to Microsoft – the move to cloud computing.

A lot hangs on Microsoft’s next operating system, Windows 8. Another Vista could kill the company.

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Leaping seconds, new millennia

The leap second brings back memories of the Y2K frenzy

Along with a storm disrupting cloud computing services, last weekend also saw computer networks being disrupted by the leap second.

Servers needed to rebooted, websites froze and – as usual whenever there’s a technical glitch – airline check in systems fell over causing chaos for thousands for travellers.

It’s all very reminiscent of what we thought would happen with the Y2K bug. While sensible people didn’t think planes would fall from the sky, dams collapse and the world financial system grind to a halt (we had to wait another eight years for that), we did think there would be a lot of dumb little things to irritate us over the first few days of the year 2000.

That no real disruption happened, not even the airlines check in systems failed or tried to check in people for 1901, was credit to the entire IT industry. It a shame that the success in dealing with the complex unknowns of what was called the Y2K “bug” – which wasn’t really a bug but a feature – ended up being portrayed a scam by the entire IT sector.

A couple of years ago I was talking to a finance guy who claimed “the whole global financial crisis was a scam, just like Y2K.”

That view overlooks how the IT industry knew it had a problem and dealt with it, as opposed to the banksters and their friends in government who denied there was a problem right up to the moment it happened.

Of course it’s easy to ignore your business or industry has a problem if you know your friends in government will make sure your bonuses, holiday homes and private school fees will be guaranteed by the taxpayer, the taxpayers’ children and the taxpayers’ grandchildren.

Last weekend’s leap second and the cloud computing outage teach us that technology isn’t infallible and that things do go wrong.

For most of us when they do go wrong, we won’t have the government to bail us out.

This isn’t anything new. In any complex society, the unexpected can disrupt our comfortable way of living in ways we don’t expect. It’s something all of us should occasionally think about.

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