I was sorry to learn that Coghead, a Web 2.0 Platform-as-a-Service (PaaS) provider, announced it was shutting down. PaaS is an interesting model: a company offers a hosted service for developing, testing, running, and monitoring new applications. Customers can use the PaaS platform to launch new applications—or scale up existing ones—without deploying any local hardware or software at all. Sounds intriguing. Possibly very convenient. Possibly cost-effective.
It's proving to be too futuristic a vision. First, Bungee Labs, another PaaS provider, ran into trouble in 2008. Now Coghead is shutting its doors.
You wouldn't think this would be possible to read all the hyperventilating blog posts about cloud computing: how the time is right for cloud computing, everything will run in the cloud, what is the cloud—do we include PaaS? SaaS? If we don't define cloud computing properly, the cloud will perish! Many industry insiders are in a lather about these issues. It's as though the lottery has come up with the winning letters, which spell cloud computing, and now we have to scratch off the bonus letters just right to multiply our winnings or be sent home with a PC, jr. Nerves are a-jangle. Fingers are flying.
But if cloud computing is such an obvious remedy to the IT woes of business, why are these vendors in trouble?
Let's come down to earth for a moment. Let's consider this situation from the business customer's point of view. The business manager asks, Do I need PaaS? Is this really the most convenient, least risky way of building and deploying new applications?
I don't want to sound pedantic, but I think many cloud computing services will have trouble overcoming the obstacle that's snared many other technically impressive solutions in other IT markets of yore: just because you can build it and it's cool, doesn't mean that business customers will be comfortable with it. How many business customers in this increasingly risk-adverse environment are really going to adopt new programming paradigms and hosted services from small, evidently risky providers? Not many, I'm afraid.
Businesses want low cost and convenience. They want reliability and low risk, just as much. And (almost) nobody in business likes to learn anything new unless they have to.
I do think there are attractive opportunities for cloud computing in 2009. I'll details those in my new post. (Don't worry. It will be short.)
Note: Thanks to @chris_marino for tipping me off to the sad news about Coghead.
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6 comments:
John,
Good post, but I don’t think it’s too futuristic of a vision. As with any new industry or movement there will be a natural process of weeding out those that cannot survive. Building application platforms, in the cloud or not, takes a lot of time and money to gain confidence and trust from business users.
At Bungee Labs we went headlong at these problems, but we realized that we aren’t going to get there over night. It will take time before businesses are going to build applications of any real importance in the cloud.
At the beginning of the summer last year, we changed our approach and our organization, as you pointed out. We didn’t make these changes in response to the economy, in fact we made the announcement almost a month before it all began crumbling. Rather, we believe in the value cloud computing provides and adjusted our approach with enough money in the bank to do something meaningful to prove it.
Since that time we have been working on applications that will be built and run entirely in the cloud. The applications we are working on will solve real business problems and provide immediate value to business users. We believe that this effort will give us the time and resources to make Bungee Connect successful by providing a revenue stream and real-world, successful application examples. For us, the definition of success is far more than just technical innovation but also long-term sustainability.
Expect to see some cool things from us proving that cloud computing can deliver to businesses much of what has been promised.
Brad,
Thank you for your comment. I'm glad to hear you folks are pushing ahead.
For me, the sentence in your comment that leaps out is: "The applications we are working on will solve real business problems and provide immediate value to business users."
This is really what I'm driving at. A lot of technologists seemed to be awed by cloud infrastructure itself. Small players can try to compete against Amazon to provide raw cloud computing services. But many businesses will be reluctant to trust new vendors or new programmatic models. The cost-savings of cloud computing don't necessarily outweigh the uncertainty and training costs of, say, a PaaS service.
A better (less risky, but still difficult) approach, I think, is to treat the cloud as a means--it's becomes a new, powerful, convenient way of solving specific business problems.
In fact, your comment came in just as I was finishing a phone briefing with another cloud solution provider who's focused on specific, important operational issues for business. I'll be writing about them next week.
I'm glad to hear that Bungee is building new applications. Best of luck! I look forward to seeing whatever you folks come out with.
Brad, I don't follow Bungee these days, but its interesting that you're 'working on applications that will be built and run entirely in the cloud'
So, is this still PaaS? Or have you gone SaaS?
PaaS seems to be a tough nut to crack if you're not consistent/compatible with already a well established development (Java/.net/LAMP). I'd claim that Force.com isn't working either if you measure how much success they're really getting beyond Salesforce.com
John's right about firms not wanting to embrace new development paradigms. That's a huge hurdle to overcome.
We technologists write and talk about future technology and its promise. It's exciting to think about what's possible.
Since I'm also a business guy and an Intuit employee, I think about solving customer problems in a way that is better and maybe cheaper than was previously possible. Intuit is maniacal about customer experience and for good reason. At the end of the day, when a customer realizes that we've solved a problem for them and it is a ton better than what they did before... that's a business.
I'm definitely sorry to see Coghead go. They had pulled together a strong team doing innovative things. However, I think that Bungee's cutbacks and Cogheads shut down are not reasons to conclude that PaaS is not viable.
With Intuit QuickBase (I'm the General Manager for QuickBase) we have a long history and a very successful, growing business. We have over 350,000 paying subscribers and more than half of the Fortune 100 as clients.
Salesforce's Force.com platform is a kind of PaaS offering and it has shown great success. There are many others. The market is alive and well but that doesn't mean everyone can thrive and it is certainly harder in this economic environment.
Bill,
Thanks for your comment.
Just to be clear: I'm not saying that PaaS, per se, isn't viable. I am saying it's more risky that is generally acknowledged, and that business customers are more likely to trust large, established vendors like Salesforce.com and Intuit, rather than young start-ups, for platform-scale solutions.
I do see exciting opportunities for start-ups in cloud computing. But I think these opportunities relate more to business-specific solutions (perhaps like the ones Bungee is now building?) rather than infrastructure plays.
See my blog post on Cloud Predictions for a summary:
http://bestrategic.blogspot.com/2009/02/predictions-for-cloud-computing-in-2009.html
Congrats on your success with Quickbase. I was just speaking with a colleague of yours, Jared Leavitt, about what you folks were up to.
John
Chris,
Well, it’s SaaS + PaaS. SaaS because we are offering an application with a specific use, but PaaS because it can be built upon and extended. We agree, PaaS is a tough nut to crack. Firms may not be ready for PaaS yet, but we believe that as SaaS becomes a more integral part of a business the development paradigms that match will also.
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