Monday, March 2, 2009

Will cloud computing be the innovation from this downturn?

Entrepreneur Magazine recently ran a list of significant innovations that appeared during previous times of economic duress.

From the Great Depression came Scotch tape. Miracle Whip. Campbell's Chicken Noodle soup. The fluorescent light bulb. From the stagflation/oil crisis/Vietnam era, the scanable supermarket bar code. From the dot-com bust and 9/11, the iPod and the Blackberry.

It's a cool list that provides you exactly that warm, fuzzy glimmer of hope that watching the stock ticker and the news certainly does not right now. Hey, it says, even if things look pretty grim at the moment, someone somewhere has just had his or her aha! moment. Don't worry, he or she is frantically working on something that we won't be able to live without in a decade or so. Hopefully, they can get financing. (Note to financing types: say yes, it'll be worth it.)

So what will be the great contribution to society during this particularly nasty downturn? More specifically, will cloud computing be one of the great innovations that comes out of the Great Recession?

I discussed that possibility in a post a few weeks back, just prior to a Churchill Club event about how Silicon Valley itself can survive this recession. In addition to the reasons I posted about why cloud computing may (or may not) be what comes out of this mess, I thought I'd add a few more points on the topic.

Jason Clarke and James Walker of Bitemarks quoted Cassatt CEO Bill Coleman at the Churchill Club event with some advice for start-ups (cloud or otherwise). "Startups need to learn to monetize their offerings quickly or risk going out of business. ...Coleman states we are at the next major inflection point in the evolution of the technology market." The invent-boom-bust-build-out cycle that Bill has seen over his career in high tech certainly points the way to a lot of opportunity atop the cloud computing wave. (If, of course, clouds have waves. Well, you understand.) But, your business has to deliver value to your customers while building a coherent business model for yourself.

Tom Foremski of Silicon Valley Watcher, formerly with the Financial Times, covered several intriguing, related topics with Bill Coleman recently. The first part of that interview is available here.
One of the other tidbits the Bitemarks guys pulled out of Bill's Churchill Club comments was this: "As for those of us who are working through our first recession, it's worth remembering -- as Coleman stated -- you learn far more during a downturn that you do at any other time."

Entrepreneur Magazine's columnist Brad Sugars agrees. Not only is there a lot to be learned now, he gives 10 good reasons to start your business now, because of the downturn. He lists a bunch of reasons why, from the fact that everything is cheaper now, to better availability of good people, to the fact that the media coverage is a lot easier -- the media loves things that buck the trend, you see.
In any case, no matter if you subscribe to any of these beliefs or not, it'll be interesting to watch this cycle and even more interesting to participate in it. That's certainly why I and my other industry colleagues are here putting the effort into cloud computing and the big changes in IT operations it enables.
And, let's hope that in terms of innovations that come in down economic cycles, cloud computing is more like the transistor radio. Or the pace maker. (Both from the Eisenhower recessions.)
But, please, let it be nothing like the hula hoop.

No comments: