Looking back over my lifetime the superstars of technology in some ways did us disservice. I applaud Mr. Gates, the late Mr Jobs and others’ achievements in making technology seamless and universally accessible, but by doing so they distanced us from it, making it mysterious. Most kids have little understanding of how the machines that infest their lives work, which is a shame. It is also undesirable to most since we end up in a world where a few are able to exploit the many with their clever wizardry – look only to Apple’s eye-watering profits which recently surpassed mighty Google’s revenues!

An old passion reignited

I was fortunate to have been brought up by an electronics engineer (my Dad) who had a keen interest in computers. I have fond memories of him teaching me how to mock things up with a bread board (a rapid prototyping system for designing electronic circuits) and the nuances of good soldering. Aged 9 I was making simple burglar alarm systems so I could tell when my sister was trying to sneak into my bedroom, by 11 I was making my BBC Master computer do real world interactions via its parrallel port and some circuitry I’d rigged up and at 12 I built a model hovercraft. Making such devices is not actually that complicated!

I’m ashamed to admit that I allowed those passions to fade. I moved on to programming instead and immersed myself in the virtual world, then the Internet, but in the last year my passion for real-world electronics and computer interfacing have been rekindled. I’m delighted to report that I am also very much not alone in this! Perhaps the best known “movement” are Hackspaces – places where like-minded hackers can get together, pool ideas and resources and make cool stuff.

One of the technologies that has really helped us hackers is Arduino – a programmable, open source, simple to use board for under £20 that you can hook up to your own electronics to do all sorts of things. Combining computing and home-brew electronics just got practical again, whereas during the age of the PC it was frankly rather impractical for most since you needed quite advanced skills to directly interface basic electronics with a PC and they are expensive and large so you can’t stick one in a box to run your door bell, for instance.

In short, modern personal computers had distanced the user from the underlying technology compared to my old BBC Master which has made them accessible to a wider audience but also limited innovation to a small number of well-resourced companies. Even Linux did not help much since although the operating system is more accessible to a hacker the underlying hardware was still a PC and not really designed to have bits of DIY circuitry attached. But that is changing.

The Internet of Things

I’m not suggesting that hacking with home-brew electronics and small computers will bring the UK out of a double dip recession. What has changed though is the addition of ubiquitous network connectivity into that mixture along with an acceleration of innovation.

What I am in fact predicting is that 2012 will be the year that the Internet of Things really takes off, driven by the hacker community.

It is already here, but what will rocket-boost it is the hacker community empowered by cheap open source hardware platforms. There are two platforms in particular I’d like to highlight: Nanode and Raspberry PI. Nanode is an Arduino with the capability to speak over IP built in conveniently. It is actually quite a pain to make an Arduino communicate via IP or even serial by itself (I’ve tried, trust me!) but Nanodes make it easy, and they are dead-cheap – under £20 for a kit and about an hour to solder the components onto the PCB.

Even more exciting is the British Raspberry PI; an ARM GNU/Linux computer for $25. ARM are the British central processor chips that used to be in Acorn computers and are now powering the world’s smart phones, tablets, netbooks and more. With such a cheap and powerful computer available the possibilities are no longer limited by money, but rather by one’s imagination. I am not suggesting that all those new devices will be one-off non-commercial affairs either. As we have seen with the ‘Web and with smart phones many of the services and apps that have been developed have gone on to become major commercial offerings, and I would expect the same of the exponentially-increasing network-connected devices littering our lives. The revolutionary aspect will be, I believe, that everyday people will drive the innovations rather than established corporations.

Limitless possibilities

To give you some examples, I have a few Nanode projects on the go myself. First I’m using one to monitor the moisture level in the soil of my sole houseplant which was inherited from my Mum who in turn got it from my grandfather. I’m hopeless at remembering to water things and it is a very precious plant, so I have applied technology to the problem. The circuitry is very simple and rather than worry about polling data and doing charts etc. myself my next step is going to be to get it publishing data to Pachube, a cloud-based service to do all the useful stuff you want with data like drawing charts, sharing it with people and delivering notifications to your phone.

Another more commercial project is a temperature and humidity monitor (a Nanode with a SHT15 sensor) to monitor the environment in my cupboard under the stairs which is my home’s nerve centre (I’ve noticed it is getting a bit hot thanks to the collection of IT kit in there). My plan is to use the eventual design in our data centres as well – why pay some vendor £hundreds for an IP data centre environmental sensor when we can get a job lot built for us on the cheap?

I’ve got numerous other ideas and I’m not alone. Hackers are out there working on cheap-and-cheerful solutions for everything from home-care for the elderly to asset tracking in the field to home and industrial energy management. It does not stop with the individual applications either though; looking at the likes of Pachube one starts to realise the enormous potential of pooling and analyzing all the data we are starting to collect.

British invention

Britons are fabulous inventors – our history is steeped with examples of ingenuity – but we have arguably lost our way. I believe that it is time to correct that and that these low-cost, flexible, open source, community driven platforms are an ideal vehicle to reignite the nation’s passion for invention and innovation. Further, many of the most inspiring developments are happening right here in Blighty – Nanode and Raspberry PI are British and if you want to see something really cool check out these Arduino-based aerial drones.

With the Euro-zone teetering on the brink of collapse and a new recession looming we should fall back on our strengths and look to technology innovation to drive our economy forwards. ARM is the perfect example; they don’t make anything, that is all done in Asia, but they are enormously successful at creating the intellectual property and licensing it to a hungry and growing global market.

So, hackers of Britain, get out your soldering irons, make your way to your local Hackspace, share your ideas, ask the “stupid” questions (there is no such thing and have a go at bending technology to your will. We can all be wizards now!

When I recently took delivery of my magic mouse I was struck by how aptly it was named. If it were presented to someone only a few decades ago – a smooth pebble-like object which could be used to interact with a computer by moving it or merely brushing one’s fingers across its surface – might it not have appeared magical? Mr. Jobs’ elegant creations brought to life Arthur C Clarke’s maxim that any sufficiently advanced technology is indistinguishable from magic.

Adding to this, the world economy continues to stutter, teetering on the brink of another global recession fuelled this time by not the banks defaulting, but the prospect of entire governments being declared bankrupt. Is this really the time for fancy new technologies?

3D printing

Perhaps the most obvious transformational technology to pick as the one to watch would be 3D printing. It is hard to understate the likely impact of “printers” able to create almost any device object as common as personal computers are today, but we are quite a way from that point. At present they are relatively crude, able only to print a small range of types of plastic and quite expensive.

An interesting area to watch is the open source RepRap, which can be used to make some of the parts for additional copies of itself. The implications of machines that are able to make anything, including copies of themselves, are profound indeed, but I am not convinced that 2012 will be the year of 3D printers and fully automated manufacturing.

The Internet of Things into life

But no, I think the next big revolution will be something called the Internet of Things. So what is it? In this context I’m talking about all the Internet Protocol (IP) connected devices that litter our lives. Why does this matter? Well mainly because there are a lot of them – estimates of between 50 billion and 1 trillion by 2020 are out there. You might be thinking, “Nah, I only have a couple of computers, what are they on about?”. Well, I counted up all the IP devices in my home recently and got a surprise:

• 1 x Mac mini (our media computer – I recently cancelled Sky and we stream all TV)
• 1 x Cable modem with integrated Wireless Access Point
• 1 x ReadyNAS file server (for backups and storing large files such as movies)
• 1 x X-box
• 1 x Wii
• 2 x Mac Air Laptops
• 2 x HTC Desire Android smart phones
• 1 x Amazon Kindle
• 5 x IP CCTV security cameras
• 1 x CCTV system head unit
• 1 x Burgular alarm system
• 2 x Televisions
• 1 x Hi-fi amplifier

A total of twenty IP-connected devices! Now, I’m a well-off technologist so you could argue that I have more devices than most and that most people would not connect all their devices (like the TVs – all mine do is auto-update their firmware at present). However, first that list is for two people (my girlfriend and I) and second we are actually fairly minimalist with our technology and tend to have as few devices as possible; we have one laptop and phone each, only one pad device (the Kindle) between us, and a couple of other computers and consoles. Anyway, call it in round numbers 10 IP-connected devices each and assume there are 1bn people like us in the developed world and you get 10 billion devices in the West. Suddenly 50 billion in 8 years seems very likely, in fact if anything a bit low!

More addresses!

Until recently the potential for this explosion was also hampered by the fact that we were running out of IP addresses. IP addresses are codes like “78.31.108.54″ that are used to address machines on the Internet – that one happens to be my personal virtual machine. The old system is called IPv4 and each of the four parts of the code could be a maximum of 255, so the total possible addresses was about 256^4, 2^32, or about 4 billion (4 * 10^9). Some devices are inside home or office networks so don’t have an Internet address themselves, but if they could it would potentially accelerate the potential of the Internet of Things even more.

Recently new version of IP addressing, IPv6, has been rolled out which gives us vastly more – a mind-boggling 2^128 possible addresses, or about 3.4 * 10^38. As described in a lovely XKCD cartoon, it is unlikely that human society in anything resembling our current state will ever consume that many addresses, but I digress!

The peoples’ revolutions

For something to be a revolution you need a bit more than device proliferation though. Let’s take a step back and look at the last couple of decades and the other recent revolutions. I would like to contend that since the headline technology revolutions of my lifetime (personal computing and personal network connectivity) there have been two further major revolutions and that both of them have been community-driven, albeit reliant on the first two revolutions. As an aside, that is often the way of innovation, as in the words of W. Brian Arthur:

“Novel technologies form from combinations of existing ones, and in turn they become potential components for the construction of further technologies.”

The third technology revolution of my lifetime, and the first driven more by people than by institutions, was the World Wide Web, which grew organically without any central authority and whose content was created by people everywhere, especially in the beginning. I remember being at university and sitting in a tiny bedroom next to my room mate in the wee small hours while we both built our personal Web sites, borrowing bits from others who had gone before. Today the content is being generated by even more people now that the technical knowledge requirements have been reduced with systems like blogging and wikis.

The fourth revolution has been in software development communities. I’m cheating a bit and rolling two revolutions into one; first the open source software movement – generally free community-sourced and managed applications; second the accessible software development ecosystems that have been created for smart phones by companies like Apple and Google realising the awesome power of enabling the community to get creative with their platform. There are further examples as well, such as the popular Linux-Apache-MySQL-PHP (or Python, Perl etc) “stack” which millions of bedroom hackers and professional programmers alike use to rapidly develop their own Web applications; a free development platform created by the open source community.

The benefits of accessible app development platforms is fairly obvious (just look at all the things your smart phone can do), but amazingly some hard-headed business people are still in denial about open source software despite it being responsible for many systems that are now integral to our daily lives. The Linux operating system, to pick but one example, has proven to be massively reliable – more so on our experience than closed source Windows by a long way – and is completely free. Open source is an amazing example of functional communism at work. I’m a particular fan since I have built my entire business on open source technologies and thanks to them I’m able to undercut all my competitors and still make a healthy profit. Everyone wins!

You might be asking, “What about smart phones or social media? Are they not revolutions?”. Back in 2000 I had a Palm Pilot that could do quite a few smart phone type functions and Moore’s law has always predicted that we would have powerful computers in our pockets. Ubiquitous network connectivity is also key to smart phones but that too is a long-term trend. What has made smart phones really work compared to my old Palm Pilot has been the people-power behind the app development. As for social media, again I see that as more an evolution of technology; as far back as 1997 I was using Internet Relay Chat (IRC), usenet news and online forums, all arguably social media. It is the Web that is the revolution, driven people finding cool new ways to use that technology – social media being just a prominent example.

The hackers’ revolution

I believe that the fifth major technology revolution of my time will be the Internet of Things and that like other recent revolutions it will be powered by a community, in this case the hacker community, their innovative drive empowered by cheap open source hardware platforms.

I’m not suggesting that hardware hacking is anything new, but what has changed is the addition of ubiquitous network connectivity into the mix along with some cheap and flexible platforms such as Nanode (an Arduino board with ethernet attached) and Raspberry PI, a Linux computer for $25. Especially exciting is the fact that those innovations are both British.

In my next post I will describe how I think hacking is making a come back, how it will rocket-boost the Internet of Things revolution and how I believe that together it could be a real boon to our faltering economy.

Cloud computing can be regarded as essentially the provision of computing resources and/or software as a utility, in the same way that your business uses familiar utilities, such as electricity, water, gas etc. Cloud computing enables you to pay for computing resources as you need them. These services are provided over the internet, on a consumption-based pay-as-you-use model, with short-term contracts and without up-front expenditure.

Whether you realise it or not, you’re probably already using cloud-based services. Facebook and Google are two prominent companies offering cloud-based software as a free online service to billions of users across the world. Google, for example, hosts a set of online productivity tools and applications in the cloud such as email, word processing, calendars, photo sharing, and website creation tools.

Broadly speaking, to be considered “cloud computing” an application’s data and core processing functions would be hosted/stored and managed online or ‘in the cloud’, and accessible from any PC, laptop or mobile device with a network connection in real-time.

In this context, “in the cloud” actually means that the application, along with the data it uses, is installed one or many powerful computers called servers, which are similar to home computers but in a different form factor and without screens, that reside within specially adapted buildings called data centres. Data centres are like warehouses filled with banks of servers in cabinets called racks. Data centres have powerful air conditioning systems to keep the servers cool and highly resilient power and internet connections. A picture of one of ours before being filled up is here.

Three Flavours of Cloud – the “service models”

One of the biggest confusions over cloud comes from the fact that it actually applies to a number of different layers in the “stack”. Don’t worry about what I mean by the stack, but if you’re curious see this post. There are three flavours of cloud, which broadly go down in cost but up in the required level of technical know-how in the order I have listed below:

Software-as-a-Service (SaaS)

These are usually applications or services that you access via a Web browser. Google Mail and Google Docs are examples of this kind of cloud computing. Some companies host an application on the internet that many users sign-up for and use without any concern about where, how, by whom the compute cycles and storage bits are provided.

Some SaaS is delivered via customised client applications, for example if you use Twitter or Facebook from an app on your phone. Our own SquirrelSave personal cloud backup product is also an example of SaaS in that sense – you, the user, doesn’t have to worry about where the data is getting stored nor the internal workings of the platform we have developed.

A better term than “software” might be “application”, since the platform part is also really just software, but SaaS has already gained wide acceptance. SaaS is usually the most expensive form of cloud since you are paying for the software as well as the underlying infrastructure and it requires no technical know-how. Examples of paid SaaS include Salesforce.com, though presently the most widely known examples are “free”. Of course, nothing is truly free, and by giving away their services companies like Facebook and Google are getting something – your information and time.

Platform-as-a-Service (PaaS)

This is a set of lower-level services such as an operating system or computer language interpreter or web server offered by a cloud provider to software developers. Developers write their application to a more or less open specification and then upload their code into the cloud where the app is hosted and automagically scalled without the developer having to worry about it overly. Microsoft Windows Azure and Google App Engine are examples of PaaS.

In old-school hosting parlance, a managed hosting service might also be considered PaaS – the developer gives the hosting provider some code, and the provider worry about how many servers, how much bandwidth (internet connectivity), etc. and just give the developer one bill. Because of the auto-scaling and ease-of-use afforded by PaaS, and the abstraction/obfuscation it gives the vendor, it usually costs a premium over renting the underlying infrastructure directly (IaaS).

For the more astute readers: You might hear people say that that Facebook is also a “platform”. This can easily get confusing; yes they provide a platform for developers to make add-ons, like the popular game FarmVille, but in reality they are just being a gateway (FarmVille runs on servers outside Facebook’s data centres) and are not providing any computer resources, so they are not providing PaaS. A similar example is Apple’s iOS platform – they provide tools to developers and a gateway to sell their apps (the app store) but if those applications that have a cloud component will likely be using IaaS or PaaS from elsewhere.

Infrastructure-as-a-Service (IaaS)

IaaS is the provision of virtual servers and storage that organisations use on a pay-as-you-go basis. This is the most powerful type of cloud in that virtually any application and any configuration that is fit for the internet can be mapped to this type of service, but is also the most technically challenging to exploit. Amazon’s Elastic Compute Cloud (EC2) and Simple Storage Service (S3) are examples of IaaS, as are our own Miniserver VM® cloud compute and Memstore™ cloud storage services.

In practice, cloud suppliers often provide additional services alongside IaaS offerings, so the boundary between IaaS and PaaS can become blurred. However in its purest form compute IaaS can be considered as a bunch of unmanaged virtual machines (VMs) for which you provide the operating system image, that can be scaled up and down (by spinning up and tearing down VMs) according to your application’s needs in near-real time (ie. within minutes). IaaS data storage is more simple, working like a giant disk drive where you only get billed for what you are using, usually on an hour-by-hour basis.

A virtual server or virtual machine (VM), is just like a normal server but is smaller in terms of CPU, RAM and disk than a whole physical server, and several sit on each physical host server. We typically put about 15 VMs on each host server, for example. VMs have the advantage that they can be created and destroyed effectively in real-time in dynamic response to demand.

Private vs. Public – “deployment models”

As well as IaaS, PaaS and SaaS (the “service models”), cloud has a number of “deployment models”. The ones I’m going to focus on here are “private” and “public” cloud. There are also “community” and “hybrid” clouds, but I’m going to save that for a later article. Also, here I am just going to briefly cover what public and private cloud means in the IaaS context.

Public cloud means that your virtual machines are sat on the same physical host servers as other clients. A private cloud is where the host servers, and in some cases the physical network or even an entire data centre facility, is dedicated to one client. When most people say “private cloud” what they usually mean is “a company’s own data centre with some virtualisation software”. This is arguably not cloud since you lose the scalability aspect. When we, as a cloud provider, say “private cloud“, we mean infrastructure dedicated to one client that we scale (by adding dedicated host servers into their set from our standby pool) as necessary. Some people would call that a “virtual private cloud”.

Moving To The Cloud?

One of the great things about cloud is that it can be experimented with very cheaply. If you are looking to make use of cloud services then I suggest just dive in! Start small, with one service, and then move more services once you are ready.

Analysts have indicated that future technology leaders will gravitate to cloud-based models as a way to deploy software and to store content, and we are certainly seeing that trend. A lot of customer start using our cloud as their development “sandbox”, costing a few £10s of pounds per month, and as they gain confidence gradually migrate more critical applications across.

I was technical co-lead on phase two of the G-Cloud project. Miles Gray of the NHS (the other lead), the technical team and I proposed a fairly detailed architecture for the G-Cloud (here). There were some core principals that we felt were vital: it would not be a “thing”, but instead a collection of cloud infrastructures, services and applications, probably mostly provided by private sector but with some public sector in there too, all bound together by open standards cloud APIs with an app store and services interchange at the heart. The Public Sector Network (PSN), the Government Secure Intranet’s (GSi) proposed successor, would be the unifying platform.

I am increasingly convinced that G-Cloud will happen. Martin Bellamy,  Ministry of Justice official and previous G-Cloud project leader thinks so, and Chris Chant, now head of the programme, certainly thinks so too! The public sector is already moving to cloud; there are a number of local government initiatives with pooling infrastructure resources and running shared services. A good example is Hampshire, who run infrastructure and services for a number of smaller local authorities, linked together via the Hampshire PSN.

There are two main features that make G-Cloud different to other government ICT projects, and which are why it will work:

1) There is no “big bang” spend. We, the supplier community, are making the up-front investments and then simply offering those services to government on a pay-as-you-go basis, with no requirement for long-term contracts. Therefore, there is little risk to government.

2) The G-Cloud services will be vastly cheaper than what government is used to paying, but will come with a seal of approval from CESG’s new Pan Government Accreditor body so that government customers can have some surety that the services meet requirements.

On the security front, working with the security work stream we proposed multiple G-Clouds, one per Business Impact Level. Applications, data, suppliers and users at similar security levels would be grouped together.

The core commercial tenet would be government not pay anyone up front to build any infrastructure or software, but instead would consume everything on a pay as you go basis, with the app store doing the billing. Suppliers’ service quality record would be shared (a bit like eBay ratings), to enable cost-quality buying decisions, and supplier switching would be straight forward thanks to the disintegrated stack approach and standardized infrastructure and platform as a services (IaaS/PaaS).

The only parts that we envisaged vital for the government to own and control (to maintain its impartiality) were the app store / services interchange and the proposed “Pan Government Accreditor” – a centralized CESG body that would pre-certify G-Cloud components (IaaS/PaaS/SaaS, stand-alone applications, etc.). Cloud economics expert, Simon Wardley, of CSC’s Leading Edge forum, agrees that it is imperative that any app store remains centralized and government controlled.

I was therefore worried to learn at a briefing on PSN at last week’s Efficient ICT, Greener Government conference that Cable & Wireless are attempting to “do an Apple” and turn PSN into a platform where they offer 3^rd party services, hosted on their infrastructure, to government, taking a slice of every transaction. Such plans should be resisted.

My other big worry about the G-Cloud was that they would only talk to the usual suspects – the large systems integrators that appear to have government ICT sewn up and have done a highly debatable job of delivering value – who I do not believe are capable of delivering the cost benefits of cloud. SMEs are going to be a vital part of the G-Cloud ecosystem, and as part of the technical architecture we envisaged ways to facilitate their entry. For example, by splitting up the stack an innovative software development SME, once they and their application was pre-certified, would not need to invest in List-X data centres to offer a secure solution, they could partner with a pre-certified IaaS or PaaS supplier and get their solution into the app store.

So, what of SMEs? Well, as an SME who has recently been signed up to the IaaS/PaaS foundation delivery partner activities for the G-Cloud project, I am pleased to report that they are staying true to their word of assigning 25% of the contracts to SMEs. The next step is for our Miniserver VM® virtual server and Memstore™ cloud storage services to go through accreditation with CESG’s new pan government accreditor. Some of the commercial aspects also need to be finalised, but the aspiration is to be able to provide IaaS to government via the G-Cloud framework as early as January 2012.

So far, so good, but there are hurdles to enable pre-certification, and thus easy buying of cheap, secure services: i) EU procurement rules remain a problem, though a framework agreement is coming out imminently which will hopefully enable pre-certification; ii) Security responsibility needs to be centralized, but getting SIROs to trust the pan government accreditor would be a major culture shift; iii) The usual suspects have huge vested interests and appear to have convinced government that a 30-40% saving is acceptable. It is not. The government should actually be aiming for a 70-80% savings on their ICT spend from the G-Cloud. If done properly, G-Cloud has the potential to be hugely disruptive and could be saving the government £12bn per year by 2020.

iCloud is a hosted storage service that will seamlessly copy and sync documents, e-mail, calendar, and contact data from a Mac or Windows PC, back and forth to iOS devices like the iPhone and iPad.

Great for those of us who are now much more mobile and face the challenge of making sure the same e-mail, contacts, calendar events, and documents are available whether you are sitting at your desk, using a tablet from home, or working on your smartphone while riding in a taxi.

Businesses, particularly small companies reliant on iOS and Mac OS X hardware, will find iCloud an appealing way to simplify file management and distribution.

However most businesses are unlikely to use iCloud until Apple adopt an open cloud standard.  The fact that iCloud won’t deliver on other platforms like Android smartphones and tablets are going to be a major hurdle for Apple to overcome.

In Apple’s defence they have done a good job with the development tools, always a key area for driving adoption of a platform technology. In a recent Appcelerator and IDC survey 51% of mobile developers said they planned to use Amazon’s cloud services in the next year, and 50% said they planned to use iCloud.

Apple also seems to be the only manufacturer that is edging away from PCs/desktop machines and encouraging greater uptake in the “cloud”. For example, MacBook Airs never came with DVD drives, and the new Mac mini range no longer have an integrated DVD drive either.  Similarly new Sandy Bridge Airs and minis can have OS X reinstalled directly over the internet rather than booting from USB or external hard/DVD drive. Apple’s mobile devices are now getting over the air updates and are no longer going to be tied to iTunes on the desktop.

Our new cloud storage solution, Memstore (in beta, live next week), uses open source software, OpenStack, combined with in-house technologies, to deliver a flexible, scalable and safe way for customers to store their data in the cloud on a pay-as-you-use basis.  The service will also be the cheapest on the market as well, in line with our “costs plus” pricing model, showing that you don’t need mega-scale to achieve low price points. According to Forbes, iCloud will be more expensive than Amazon and Google’s comparable services, which already arguably inflated.

OpenStack’s code base comes principally from Rackspace, and you might wonder why a successful company like them would give away their software? The answer is simple: Amazon. From a standing start 5 years ago Amazon Web Services has grown to an eye-watering $1.4bn in revenue. Rackspace, their leading competitor in the cloud space, is thought to have about one tenth that figure in revenue from cloud. So, Rackspace and the other out-paced cloud providers have clubbed together to create an open, interoperable cloud system. Their hope is of creating an open market for cloud resources, which would be more attractive to business users and promote innovation, and thus get bigger bite of Amazon’s lunch.

Now, last year Apple’s market valuation exceeded Microsoft, and as of this week they exceeded Exxon to become the world’s largest company valued at just over a third of a trillion dollars. So, if anyone was going to try and take on both Amazon’s somewhat open, and certainly cross-platform, cloud as well as the likely future in the form of OpenStack it would be them.

But can they really? Due to being a fairly closed system, iCloud’s success is contingent upon their iOS user base since that is the main demand area at present – personal content distribution and mobile applications. However, Google’s Android mobile operating system has over 40% of the global smartphone market in terms of devices sold/shipped and Apple only has about 15%.

Essentially Apple sees iCloud as a consumer rather than a business service – and Apple have never really been interested in enterprises or business, despite the work they done to support policies and enterprise standards like Microsoft Exchange ActiveSync on the iPhone.

In addition to the closed, proprietary, non-interoperable system being likely to put off serious business users there are two other issues. It does not look like iCloud will not come with a substantial service level agreement, which guarantees iCloud uptime or quality of service, and they don’t seemed to have paid a huge amount of attention to security. CIOs aren’t going to entrust important data to a service that may or may not be available when needed.

Still, even if it is a consumer service, Apple is a quality brand so one would have thought that security would be a priority, and these days consumers are increasingly aware of the need for keeping personal data safe, especially online.

I firmly believe that adoption of open cloud standards is one of the keys to unlock the full and global potential of cloud computing and to breaking down the duopoly of Amazon’s IaaS and Google’s consumer SaaS. Jobs & co may be making astonishing profits, and will likely continue to do so for some time, but unless they either out-landgrab Android in the smartphone and tablet market or open their doors to cross-platform services their success may be short-lived. But maybe that is not a concern. Maybe, with Jobs’ rumoured ill health, he has decided that there are few more golden apples to lay and that he should cash in while the going is good.

For several years now, we’ve been running all our business systems over the ‘net  (including instant messaging, email, document management, project management & collaboration) by using open source software. Both Nick & I are huge fans of open source, so I thought I’d share why and how we use it within Memset.

As of 2008, 85 percent of businesses were using open source software, according to Gartner. That percentage has probably increased since then as more and more businesses find that they consistently get great value – and the desired ROI – from open source software.

We turned to open source for a number of reasons:

• Price. You don’t need to pay licensing to Microsoft anymore, simply download the open source software and install it, and don’t pay a penny. Furthermore, you usually get unrestricted access to the source code enabling you to modify it to suit your requirements.
• Flexibility. Once you have the software installed you are free to host your applications wherever you like. This means you no longer need to put all your information in one basket, say with Google, so instead you’re able to separate the software from the host and own your own data. A good example of how to achieve that would be Zimbra; an open source suite of office applications which can be hosted by any managed hosting provider. We have customers who rent a virtual machine from us and have us install Zimbra on it.
• Improved Productivity. By using open source software and adapting it to suit our needs, with fairly minimal development effort, we’ve been able to build on those foundations to automate a large number of our processes such as account billing, administration, provisioning, maintenance and monitoring activities so that they require very little staff input.
• Desktop Free. Because they are all Web based it makes it really easy for people to work from home, or anywhere for that matter. We have now migrated most of our staff to ‘nix-based systems (mostly Linux, but some of us use MacOS), and all they need is just a browser and an email client. Firefox & Thunderbird are certainly enterprise-strength, for example, and there are plenty of solid open source server-side solutions.
• Increased Security. In my opinion, open source applications tend to be even more secure than their commercial equivalents as open source communities are generally able to find and fix security vulnerabilities much quicker than their corporate counterparts. The very weakness pointed out by software companies like Microsoft (ie. that the source code is visible) is in reality its greatest security strength.

But what if it stops being supported?

Perhaps the biggest objection to open source I hear is, “But what if the solution I’m using stops being supported by the open source community?”. First off, you have this problem with commercial software; what if the supplier fails, or in the case of one like Microsoft what happens when they change version and stop supporting yours.

That is not the real answer though; one of the real beauties of open source software is that it is designed to be, well, open. All the solutions we use (see below) are based on open database architectures (often MySQL) with lots of documentation, so that even in the worst case scenario of the package no longer being supported, all of our business information is available in an open, accessible format, requiring only a little DBA time to extract. Try doing the same with a proprietary software’s internal data base!

Also, because the solutions are self-hosted (ie. you’re getting the software from someone other than the person providing the hosting) you are in total control of your own data. We do not use Google Docs, for example, mainly because I don’t want all my company information to be stored on a random server somewhere in the world with no guarantees of security.

Example: TRAC (Integrated Project Management & Wiki)

We use a mixture of in-house developed system and open source solutions such as Trac (project management & Wiki) and Sugar CRM to deliver an interlinking suite of information management tools which are available to everyone in the company.

Customer information is stored in a master central database, and by using rapid software development platforms like Django we have been able to quickly and cheaply add all the features and tools we need with our own internal development team.

However, the key element in the context of information management is probably our Wiki; it contains all procedural information and the distilled wisdom of the people in the company. You get complete version control and logging for free with the software, and those built-in auditing features helped make getting our ISO9001 accreditation a breeze.

Trac is invaluable for sharing information between teams, keeping track of changes to documents and projects, listing outstanding issues, assigning jobs and creating visibility of each others’ workflow. Being able to have an organised central location where everyone can go is great. It is certainly a lot better then trying to pass around .doc files from one person to the other, or constantly uploading and downloading .doc files to and from Sharepoint and having to worry about out of date versions. And, as its Web-based, you can access your data online from any computer, anywhere, secured and encrypted over HTTPS.

Example: SugarCRM

Sugar OS is an open source CRM application bringing a feature-rich set of business processes that enhance marketing effectiveness, drive sales performance, improve customer satisfaction and provide executive insight into business performance.

At Memset we use SugarCRM to improve productivity and sales effectiveness through the sales lead management functionality.

Example: Request Tracker

RT is an open source issue tracking and workflow platform. We use this software for all our customer technical support. It allows us to keep track of and assign assign tickets and to monitor who is working on which tasks, what’s already been done and when the tasks were completed.

Example: Openfire (chat)

Openfire, is an open source XMPP/Jabber server for instant messaging. Sure, you could use MSN, but we prefer not to have Microsoft listening in on our corporate communcations. We self-host and fully encrypt our internal instant messaging chat.

These are just a small selection of the open source solutions we have implemented at Memset. Also, despite us having a lot of technical know-how, you really do not need to be an expert to use these open source systems.

Even if you do not have the very basic systems administration skills in-house there are plenty of companies like Memset who will happily host and manage these services for you, while still giving you full control and data-ownership. With more and more companies looking to Cloud-based business management services like these, open source really is coming of age, even for the most security-conscious companies; Memset is fully ISO27001 certified and can ensure that your business-critical data remains 100% under your control, within UK borders.

Open source should be considered as a viable option for your business as it provides better value for money, lower costs, increased productivity and improved security.

One of the areas on which we reached clear agreement in the G-Cloud and App Store phase 2 was the definition the layers of the stack, infrastructure, platform and software, and their scalable, standardised “as a service” modes. Pleasingly, our delinations were very similar to prior work from two decades ago by IBM, except that ours incorporate virtualisation.

The diagram shows what we agreed we mean by Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (right hand side) and the areas encompassed by the individual terms infrastructure / platform / software on the left. A better term than “software” might be “application” since the platform part is also really just software, but SaaS has already gained wide acceptance.

It is assumed that “as a service” means all services within the definition are fully integrated up to and including the respective level, thus incorporating any sub-levels. Therefore, SaaS providers could either sub-contract to a PaaS provider, or would incorporate the PaaS themselves and provide it as part of the SaaS “stack”. In turn the IaaS could be sub-contracted or incorporated. The customer would see an integrated service.

It is also worth explaining the overlap between ‘platform’ and ‘software’; that is because some advanced platforms are built on complex software solutions which go well beyond just operating systems and a bit of infrastructure software.

For example, one could consider bare operating system as the platform, with the bespoke software application incorporating its own software infrastructure elements (eg. a bespoke CRM solution). One might also consider a Linux-Apache-MySQL-PHP stack as the platform in its entirety, with only the PHP code and databate structure being the software/application layer. The key differentiator between ‘platform’ and ‘software’ is that a platform is standardised and to an extent commoditised, with the software being the bespoke / custom element. A platform would also often, but not always, be highly scalable across multiple servers.

Standardised / commoditised software (hosted application) services, as opposed to bespoke / custom deployments, would most likely be considered to be SaaS.

Virtual differences

Until this point many experienced readers might be saying, “Yes, that that is just hardware, middleware and software renamed!”. To a large extent you would be right, with one small exception being subtle differences between modern platform or middleware, but there is an important difference between the old concept of “hardware” and ours of “infrastructure”: virtualisation.

It was agreed among the G-Cloud team that the virtualisation should now be considered as part of the hardware layer since it has become such an integral method of dividing and provisioning hardware resources. It is important to note that we drew the line precisely between the virtualisation layer (ie. the hypervisor) and operating system, viewing a bare-bones virtual machine without operating system or kernel as the unit(s) of hardware.

Of course, virtualisation is not ubiquitous. Indeed for many systems including highly scalable ones upon which PaaS and SaaS stacks are built do not use any virtualisation (Google App Engine does not, for example). In such cases one would simply view the stack without the virtualisation layer with the boundary between infrastructure and platform being between the physical hardware and operating system layers.

Network

Another critique of this model could be that the “interconnecting network” appears to link directly from the software layer through to the client device. In reality, of course, all network traffic has to sink back down through the layers from the software to via the networking & firewalling layer, then on to the client device. To keep the stack looking like a stack, however (which is correct from a logical perspective), it is better to stick the client device on top rather than off to one side. In the full postulated functional of the G-Cloud logical architecture the connections are more explicitly shown in a 2D rather than linear model. Hopefully that will be in the public domain soon!

I have spent the last few months working with the cabinet office on phase 2a of the UK’s G-Cloud and App Store programme. My position was as industry co-lead for the technical architecture work strand. The other lead is a public sector employee from NHS connecting for health, which, despite the flak they get, have done great work in marshalling and managing massive numbers of servers and PCs and the networks in between. Other work strands included Information Assurance, Commercial, Quick Wins, Service Management and Business Transition Planning.

Working on the project has given me a very clear insight into what the benefits of Cloud Computing to government and business really are, and also what a government Cloud would need to look like. That was essentially what we were describing (in broad terms) in our technical architecture strategy paper, which will be published soon. Therefore, I’m updating my definition of Cloud Computing in line with that work, and also incorporating the NIST definition, which has recently become something of a de-facto standard (although I don’t entirely agree with it).

Cloud != Utility

“Cloud Computing” has many aspects, as depicted above. One of those axes are the service models; Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).

Cloud Computing is often confused with Utility Computing but they are not the same – rather the latter forms part of the former. Of the service models, IaaS alone is analogous to Utility Computing, and I agree that they are fundamentally one and the same but with the added element of virtualisation making IaaS an evolutions of the concept.

Nor is Cloud the same thing as Grid Computing. Both terms are well-defined and there is no need to invent a new name for these decades-old concepts (my Dad was providing Utility Computing services from his computer bureau service before I was born!):

• Grid Computing: The combination of computer resources from multiple administrative domains applied to a common task.
• Utility Computing: The packaging of computing resources (computation, storage etc.) as a metered service similar to a traditional public utility.

I see Cloud Computing IaaS as the combination of those old concepts of utility and grid:

Cloud Computing IaaS = Grid Computing + (Utility Computing * N)
…or…
Cloud Computing IaaS is a Grid of Compute Utilities

I shall explain. The real power of the Cloud Computing concept comes about when one views it as the mass-market for Utility Computing resources, and that is what the G-Cloud programme essentially asked the technical work stream to come up with; an architecture that would allow a number of different, but standardised, Infrastructure as a Service (IaaS), Platform-aaS (PaaS) and Software-aaS (SaaS) services to be make available in one central competitive market place (the App Store).

The clear desire was also for those services to be interoperable, especially at the infrastructure level. Additionally, and this is where the “Cloudiness” comes in, the desire was such that one could request computing resources to a specified service level agreement (SLA) and at a specific security impact level, and have a pre-certified range of options which could then be chosen based on price, or other factor.

That fits with what I believe most people mean when they say “host it in the Cloud” – referencing an amorphous, distributed collection of compute resource used in a way that you don’t really care where your application resides, so long as your requirements are met.

Therefore, I maintain that when we refer to “Cloud Computing” we should be talking about an open market for computing resources, created when you combine multiple interoperable compute utilities into one massive grid, hence Grid + (Utility * N).

NIST definition

I really like the new Cloud Computing definition from the US’s National Institute of Standards and Technology (NIST) for the most part. They define three service models, five essential characteristics, and four deployment models. I have represented their model on a cube, as below:

A well-managed data centre is not “a Cloud”!

The only part I take issue with is their “private Cloud” concept; something being conveyed with gay abandon by technology analysts the world over unfortunately. In most usage, “private Cloud” just refers to a partitioned off chunk of infrastructure within one utility computing provider in most cases, or worse-still just a well managed data centre with a bit of virtualisation if you ask some people!

The UK government, for example, wants a private Cloud for some higher-security requirements, but that would be a pool of resources from a number of utility computing facilities (probably partitioned off super-secure areas of providers’ data centres); an open market again, albeit one with specific requirements. As it stands, the “essential characteristic” of resource pooling is at-odds with the analyst-speak concept of a private Cloud; if it is private and dedicated to one organisation, you will only be pooling the resources of one organisation.

There are very few organisations that will have a sufficiently diverse usage profile to gain additional benefit from such an approach, however there are several with similar requirements that could club together as one private community, like UK government. Also, only NIST’s “Hybrid Cloud” encapsulates the full vision of what I believe Cloud Computing is about (interoperability etc). Therefore I would change the NIST deployment models as follows:

• Private Compute Utility: An infrastructure physically dedicated to one organisation.
• Private Community Cloud: An infrastructure spanning multiple administrative domains that is physically dedicated to a specific community with shared concerns.
• Public Cloud: An infrastructure spanning multiple administrative domains that is made available to the general public / businesses, without physical partitioning of resource allocations. (There is arguably only one public Cloud – hence the phrase “host it in The Cloud”.)
• Hybrid Cloud: A combination of public public and private compute utilities in order to allow “cloud bursting” for some requirements, or to allow a private compute utility owner to sell their spare capacity into The Cloud.

It’s all Amazon’s fault; misnaming their Plastic Compute Utility

The origin of the term “Cloud” comes from the diagrams we used to draw of the Internet back in the ’90′s; typically the automatically-routed internetwork was depicted by a big fluffy cloud in the middle of a network map, and it was just accepted that it would route things sensibly between the data centre and client (or other end points). The term then gained further traction with people using phrases like, “I’ll just host it in the Cloud”, now referring to the generally available computing / hosting resources connected to the ‘net.

Then, along came Amazon with their “Elastic Compute Cloud” (EC2), applying the term to something that (when considered on its own) is really just a massive plastic compute utility. ‘Plastic’ since you have to request more or less instances (resources do not elastically shrink) – the elasticity is a function of how you write your application to interface with their API. A ‘Compute Utility’ because it is really just one very large compute grid being sold as a utility service; why apply a new term when we have a perfectly good one?

I see Cloud Computing as the result of having multiple utility computing providers at your behest, with standardised APIs to allow provisioning from competing suppliers. That is pretty much here now, although the grid middleware to allow smooth interoperability is not quite industrial-strength.

IaaS vs. PaaS vs. SaaS

One of the nicely encapsulated outputs from the G-Cloud project to-date has been an agreement on what we actually mean by infrastructure, platform and software, and how they do differ a little from the old terms hardware, middleware and application, but that can wait for my next posting (here).

An impressive amount for a technology startup with no clear means of generating revenue, so I thought I would do some calculations of my own:

Twitter has about 18-20 million users in the US, according to Mashable

Earnings, earnings, earnings

There are 300m people in the US and 750m in Europe. Let’s assume that the ratios are the same for Twitter users. Therefore, the total number of Western Twitter users (ie. people who would potentially pay for anything) in 2010 is:

(20m / 300 ) * (750 + 300) = 70m users

To justify a $1bn (£625m) valuation they need to be able to realistically generate at least 5% of that as profit (20x earnings multiple, which is basically unheard of outside blue chip corporates) ie. at least $50m/year.

Therefore, in round numbers, they need to be able to realistically expect (in future) to generate earnings (profits) of $0.70/year from each user.

So far, perhaps not unreasonable; once micro-payment systems start working properly one could imagine users paying a notional $0.10/month to use Twitter, or advertisers paying that per user, at least so long as Twitter is the only one of its kind.

Twitter ain’t so special

That is where we realise the valuation’s big flaw: Twitter is not doing anything special. To build another system that replicates their functionality would, in my opinion, take 2 good coders, 2 good system administrators and one good web designer 6 months, tops. Add in some management and marketing capability for operational running and if you are a generous employer your wage bill might be £500k/year ($800k).

What about hosting costs? Well what it boils down to is a large and very active database:

Assuming 100m users
100 reads & 10 writes per user per day
= 10 billion reads & 1 billion writes per day

Squeeze into 16 active hours (just looking at the West)
= 120,000 read & 12,000 write transactions per second

To host a system which is capable of those transaction levels you would need at most 100 1U quad-core machines loaded with RAM (eg 24GB), costing £200/month each, or £240k/year ($385k).

So, I reckon that Twitter’s operational costs should be under $1m/year. But what do I know, right? I’ve only been designing, building and hosting massively automated online business systems for a decade, not to mention being one of the UK’s leading tech entrepreneurs.

A more rational valuation

So why are Twitter’s investors valuing such an easily-and-cheaply replicable business so highly? I suppose that they are banking on a land-grab effect and user stickiness, but we have seen what is happening to MySpace’s diluted popularity faced by new competitors.

When faced with such valuations I fall back on common sense and base the valuation on a cost-plus revenue model, ie. “what would it cost to provide the service, plus a modest profit margin”? All businesses and markets eventually commoditise down to that price point after all, and such commoditisation can happen very rapidly in the online world.

Viewed from that perspective I estimate that Twitter’s services are probably worth about 1.4 cents per user per year at present (estimated $1m/y running costs divided by 70m users). Lets be really generous and assume that they are able to generate 50% profits on that (first-mover advantage etc), so we get $500k/year profit, which at our mentalistic 20x valuation ration would give a valuation of a whopping $10m (£6.25). Hmm.

But that can’t be right?

I admit, I am taking an extremist point of view, and commoditisation of this very new and innovative sort of service is almost certainly several years away. However, defaulting to a cost-plus business model does demonstrate the likely value of such services when the competition have all caught up, and in Twitter’s case it is not a terribly exciting outlook.

Further, the valuation is being extrapolated from a $50 million purchase for a minority share holding. That investment was possibly more about getting a seat on the board than about a real valuation of the company.

Finally, and call me a cynic, but most investors are in the business of making a large return on a high-risk investment with a short time-horizon. One of the ways that happens all-too-often in the technology sector is less about yields and more about a business’s price getting hyped as high as possible before the savvy investors get out. Some some poor sap is then left holding the baby when commoditisation or better-competition comes to bite, exposing the lack of substance behind the valuation and causing the valuation to tumble.

Eye of Google

That is Twitter’s fundamental problem, to repeat myself: It is nothing special. Google (for example) deserves its outrageous share capitalisations because they have a unique technology which gives them an indomitable lead in the market place. Twitter is little more than a non-realtime Web-based chat room, and its technology would be trivial to replicate. Expectedly, the behemoth that is Google has indeed turned its lidless eye on chat-like status-updates in the form of Buzz.

To my eyes, their strangle-hold on the consumer Web-services market remains unchallenged by the likes of Twitter. The only interesting thing I’ve seen, however, is that their master-plan to crush Microsoft by making the browser the new platform was perhaps hiccoughed by Twitter in the form of software like TweetDeck – an example of Web services reverting to local software clients. Perhaps the browser is not quite ready for everything we want to do just yet after all, but I doubt that will save Twitter from eventual relegation to the Web-stars twilight world along with the likes of friends reunited.

The panel session was lively, and I raised a few eyebrows with my predictions that the Big Corps in software & broadcast were under major threat. I was particularly pleased when I managed to astound Mr. Paxman with some stats on women in technology – here is an excerpt from the Intellect blog on the conference:

In the final panel session, Jeremy Paxman (probably for the first time in his career) was stuck for words when Kate Craig-Wood, MD of Memset, indicated that there was a 23% gender pay gap in the IT industry. Paxman expressed a little scepticism over the statistic, but rest assured the figure is one oft quoted by Intellect and comes from an equalities and human rights commission report.