Cloud computing vs Open Source – Most CIO cannot tell the difference

Few weeks ago, I posted a discussion here in a CIO forum on LinkedIn and frankly some of the comments are very interesting to say the least. Now I decided to bring some technical guys to the discussion table. My argument was and still is as follow
“I have been reading many threads about Cloud computing and I came to conclude that most CIO (maybe because of their business background) do not know the difference or real benefits of Cloud computing or Open Source software.

Hi, I am not expecting everyone to agree with me but here is my argument. Most CIOs are interested in Cloud computing because of cost. COST!!? That’s very interesting because to my humble opinion, this only applies to IaaS (Infrastructure as a Service). If you do not want to spend money on hardware and be left with redundant system then IaaS is a good approach but that’s about it. I work with Cloud computing (specifically SaaS) and this next one might hurt my business but it has to be said; SaaS is not cost saving when you comparing it Open Source alternatives that you can host on your IaaS system…. Read more here

I am not sure that they understood the argument. I was not expecting anybody too agree with me and I wanted CIOs in the group to share their insight not sound like a copy of a Gartner report. Before making any conclusion, keep in mind that I am talking here about Software as a Service (SaaS), as defined here. In network architecture design, the external network  is represented by the “cloud” symbol therefore I would have to agree Wikipedia’s definition of cloud.  It is a software served over an external network regardless of a private network (private cloud) or public network (public cloud). YES – the internet was built on cloud technology. If you use any software over the internet; be it email, search, video or social network, the system is hosted by an external party which you do not have control over. The name cloud is just a marketing gimmick because hosted applications have been around for more than 20 years since Compuserve and Internet Relay Chat (IRC & BBS). So you see, “cloud” is definitely not new. Therefore software delivered over the internet such as Google apps and Salesforce can be also deployed using Open Source alternative. Cloud promises the following: scalability, peace of mind as it maintained by the providers and lower cost. CIO, I will tell you that your software, that it is deployed in the cloud or not will not be able to scale beyond the hardware and network capacity. I have another question for CIOs:
Do CIOs care or know where all their applications are running? 
That question is usually left to the technical team to decide within the budgets of the project and any other company politics. The biggest failures of IT projects is due to the fact that the CIO (or “the business” as it is usually referred as) do not know what they are trying to achieve (lack or misunderstandings of requirements) therefore it goes past the delivery and budget. 
So where does Open Source fits in, one might ask? Open Source software allows a business to take best of breed software and customised them to their own needs for free (as in free beer). If you do not want to support the Open Source software you can get support services but the software is hosted on your own system including your private cloud (Infrastructure as a Service). Let’s put it in to context; if a company requires a CRM system – they can download vTiger, customise it and either support it themselves or buy support. The same goes for an ERP system like Apache Ofbiz and MySQL for database. I am in favour of SaaS offering, after all I run a SaaS-based company. Nevertheless, CIOs do not confuse SaaS as being cheap, if you want something that has a low cost of ownership, then I suggest you go for an Open Source alternative if it exists. So why do I say that most CIO cannot tell the difference; SaaS is not cheap and does not have a lower cost of ownership when comparing it to Open Source alternatives. And by the way, you do not need to have an army of developers to build and customise your Open Source software. Do you really want the SaaS provider on a shared system to have access to your LDAP system? What happens when you want to integrate or port your existing data to your new fancy cloud based system? CIOs should not try to lie to me. I attended many meetings and conferences to know that most of them just want to please the board. What are the differences between cloud and virtualisation? What happens to your existing hardware once you moved your applications to cloud, have you thought of using them for virtualisation? So please do not make uneducated comments as “I don’t know a single CIO who can’t tell the difference between Cloud Computing & Open Source – maybe I move in different circles.” I am not talking about dictionary or Gartner definitions.  
CIOs, after reading this and before replying you should go and sit down with your technical team and ask them the difference, only after that you can provide a good educated comment. If you want to be on the “cloud” train then you are free to do so but if SaaS is not part of cloud offerings, please feel free to enlighten me as I am always willing to learn something new.
Who should make the decisions to go cloud or not? You are the CIOs, you tell me. Is it the developer, the architect, the project manager or the almighty CIOs from his ivory tower? There is no trickery here, every fool can define a word – just do this; think of a word then Google using the following “what is ‘the word’” then voila your definition. If you need someone to school you up then drop me an email. Based on the comments on LinkedIn, all I can say is WOW. Leave the technical aspect to the technical guys and you can focus on playing golf.
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London Start-ups TechWorld Event April 09

ETAPIX Global Ltd is sponsoring the London Start-ups TechWorld Event on 9 April 2009.

London Start-ups 2.0 TechWorld Event aims to build a platform where technology and Internet start-ups can gather together to exchange knowledge, network and reward innovations through funding partners.

If you are a Start-up company based anywhere on this globe and looking for partners, funding or just the right guys to transform your ideas into the real thing, then this event is for you. This is a chance to showcase your ideas, projects and or company in front of well selected panellists. There is only one catch; your business or idea has to be Tech or Internet related.

Our panellists have several years of investment and knowledge of Tech start-ups and can provide support through financing and workshops for your next BIG thing.

The videos will be broadcast live on USTREAM.com and all exhibitors will have their details forwarded to our network of partners for further promotion.

London Startup 2.0 TechWorld Event

Thursday 9th April 2009 at 18:00-22.30

EXPRESS BY HOLIDAY INN
LONDON – LIMEHOUSE see map

469-475 The Highway
London
E1W 3HN

We booked a conference room in Docklands London. We only have limited places available so hurry and get your ticket now @ http://www.urgoing.to/londonstartups
You can also join our hundreds of members on Facebook LinkedIn Smarta
or follow me on twitter @armelnene for an update.

Ticket : £15.90 (Exhibitors)
Ticket: £10.73 (Networkers and Guests)

TICKETS HAVE TO BE PURCHASED PRIOR TO THE EVENT.

NO TICKETS WILL BE SOLD ON THE DOOR.

Click here to see a list of the panellists including a short biography.

See you there and have your business cards ready.

I am not a geek… you are nerd

Social

10 reasons why Facebook, Bebo, Orkut etc… are not profitable

Everytime I visit a startups’ meetup, I meet some aspiring entrepreneurs who tell me that they have the next killer app that will take over…

So what is that application you are talking about?…Another social networking site?

I, personally, do not believe that social networking sites make real sustainable revenue. Let me outline some points so that we can discuss and share:

  1. Users registration is free and nobody pays for premium services so don’t offer them.
  2. Advertisement is profitable as long as operating expenses stays low.
  3. A sucessfull social networking site (in terms of population) means higher operating expenses.
  4. Users do not click on advertisement and found them quite annoying… This leads to unsuccessfull ads campaign and clients extraction.
  5. Not everyone has an IPhone or PDA. Not even 1% of users access their data on the go and what is the business model here? NOTHING!!! I thought so.
  6. Also, Fan pages and groups are killing advertisements revenue specially on facebook as they are available free of charge.
  7. Because of various laws and regulations, users data cannot be sold to third parties for their own use, another closed revenue stream.
  8. No control over copyrighted material that users upload. This will eventually lead to law-suit which can clause your business.

I suggest that if you planning to start your own social networking site, try to have a real business model and most importantly a business plan. If it makes sense on a business plan, I think traditional lenders will be interested.

If your main goal is to try to sell your business to larger organisation just like Bebo and the rest, then you might have to be more creative. Think what is the difference between MySpace and Facebook? If you site is Facebook compliant then I guess your chances are limited as you become dependent on a bigger player.

I gave 8 reasons as I will let you guys come up with the other 2 reasons. I am sure that this post will make you realise something or two, next time you or a friend are thinking of making a social networking site just concentrate a the business model = revenue stream, before you venture into the wild.

The above are just my opinion and are not based on extensive research but discussion with some VCs, news and blogs.

Twitter is a way of bombarding the world with an endless stream of self-serving mini-messages. According to the click mavens at Hitwise, it’s now the 84th most visited site on the web, and co-founder Biz Stone says the company sees twice as much traffic through its APIs.

But its 140-character “Tweets” aren’t conducive to advertising. And since it’s always been a free service, the pundits can’t imagine Twitter ever making money on subscriptions.

Bebo sale
twitter revenue
Social Networks and Profitability

UPDATE – Making money on a social network – BBC News

UPDATE: Are Facebook Ads Going to Zero? Lookery Lowers Its Guarantee to 7.5-Cent CPMs.
Facebook Connect + Facebook Ads = A Social Ad Network

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pixy

London Startups 2.0

London Startup 2.0

London Start-up 2.0 is a social group promoting the technology industry in London. You do not need to live in the London area to be a member or take part in it. The group was created due to demand in the start-up community. The current formats of meet-ups in the community are very informal and make it very difficult for start-ups to make the right impact.

London Start-ups 2.0 is about creating connections between the right people to take their business or ideas further. This is a place where aspiring and veteran switch ideas and form partnerships. We also understand the difficulties that businesses face in raising finances. For this reason, we have partnered with organisations including VCs to attend the meetings. We have list of important figures that we personally invite to spot new opportunities.

Our meetings will usually last about 4 hours long (+ free WiFi) and will take the following format:

• Opening
o Registration for start-ups presentation
There will be 15 places available. The spaces will be allocated on the first come first serve basis. Start-ups will be given a 5 minutes spot to showcase their products/ services in a very formal way: – please focus on introducing your company, product/ services and business model. Remember that you will be presenting to an audience of well chosen investors in a “Dragon’s Den” style, therefore you have to make sure that you know your ins and outs.
o Networking with community peers
o Food and drinks are provided free charge
• Presentation/ demo
o Each entrepreneurs will showcase their products/ services on a large projector for 5 minutes.
o The events will be filmed and distributed to other investment companies through the internet. Therefore, if you did not get any luck this time around, do not worry as more company will see your presentation.
• End of event
o Snack bar free of charge
o Networking

Government and other agencies providing financial support to small and medium size businesses will also be attending to give advice and support for you to take your ideas to implementation.

This group is about promoting your ideas and business; we ask that for the benefit of all our members, each member should post a brief introduction of themselves on the wall. You can use the forums to exchange ideas with others.