Good god, where will the new storage experts come from? As we enter the middle of the 2010 decade, new IT projects are increasingly being designed for the public cloud instead of local IT systems. Gartner figures that by the end of 2016 we'll be through the looking glass, with more money spent on "cloud" applications and services than traditional delivery mechanisms. Soon …
There are lots of books on this, especially at Mises.org; basically the following is the case:
* we have a debt based currency, the government and economy are in a debt spiral, until loads of people go bankrupt or the currency dies, central bank 'printing' only delays this!
* we have have lenders fraudulently providing compounding interest loans, based on fraction reserve of debt(!) bonds and currency, and mostly nothing, so not an honest value for value exchange.
* all this fake money inflation pushes up the price of goods, so makes stuff less and less affordable for younger generations, because wages tend to lag these price increases, so more people have rent stuff.
* toxic waste like synthetic derivatives is just debt fraud on steroids to the n'th power!
People should also have a look at the book "Scarcity" by Sendhill Mullainathan & Eldar Sharif, to learn that people with scarcity can develop tunnel vision, so miss important stuff outside the tunnel and build an inflating debt spiral of currency, time, or other scare resources, and even come to a grinding halt e.g. bankruptcy or Divorce.
Trevor Pott wrote:
"You pay for what you need, except for those cases where you're locked into contracts, or you pay extra per month not to be in a contract."
I recently got sick of the endless error 500s (lack of server resources) my hosting ISP was throwing and started looking around.
The alternative I chose offers a much more flexible set of packages and much increased performance at half the price.
It gets better: if I stop paying the service simply stops working and there are no financial penalties. After the legal wrangles of a decade ago when an ISP continued to demand payment for a service that had ceased to work, I am very happy about this.
You're right that inhouse IT is going to have a brain drain of sorts. Most of that drain is going to move to the cloud vendors or IT service firms, however, I still think there will be a lot of inhouse IT.
But this is not just IT. I used to do a lot of work in electric power, and that industry has changed to the point where the local transmission substation is owned by Pacific Gas & Electric, our local utility. However, there is a big, fat "Siemens" sign at the substation entrance, as apparently Siemens actually maintains half the gear inside the substation.
As for "renter chic" it's not a lifestyle choice so much as an economic necessity. Most people who spend 40% or 50% of their income on rent are not doing so because they have rented the penthouse. They do it because job and wage prospects are so weak that getting a studio or sharing a 2 bedroom takes half their paycheck every month.
Where will they come from? Overseas I would bet.
It won't be me. Been courted on several occasions to do storage. Not a chance. The nights and weekend work is enough to kill you. I've watched a few tired wretches do the wrong thing, one unfortunately blew up several hundred VMs ("hmmm... SRDF in this direction.. , wait, no, this direction ... oops"). The stress and demands are not worth it and the smart ones avoid it like the plague.
"For houses the economics are pretty simple: you'll spend more renting in a lifetime than it would take to pay a mortgage, and when retirement comes around the fellow with the paid of mortgage has a house to live in rent-free. "
Wrong.
Renting is 85% of the cost of buying. Recent research has shown this.
Ok. By the time you retire you've paid out 15% less than the property buyer did for buying the house outright.
You have to continue paying out for your rental property, or pay to go into a retirement home. Either way, the property owner is one step ahead and actually owns the property (and can therefore sell it making back most of the money paid out in the first place)
"Yes, yes. We MUST own the road from the Manor into the village. "
It simply doesn't make sense to OWN the infrastructure, unless you are a truly massive organisation. Like Google or Amazon or Microsoft.
Your comparison with property ownership don't stack up. A House will probably be worth 4 times what was paid for it initially, by the time the mortgage has been paid. How much are your servers worth from 25 years ago, or even 5 years ago? A car would be a better comparison. Even better, the road infrastructure!
You also seem to think that we'll de-skill by moving to the cloud, but it's definitely the other way round. We'll need heavy automation and scripting, for provisioning and deployments. Yes, we'll be managing MANY more hosts per sysadmin... but also doing lots more stuff, so we'll need more people not fewer.
Hybrid cloud does make sense though, or at the very least being able to switch between providers if you don't want to host your own.
Oh, and if you can't afford the cloud bills you are screwed anyway. You would not be able to afford the electricity or the people to run the service, and the cost of the actual hardware is just a tiny part of the cost of running a whole service.
Actually, it does.
We had someone in recently hyping how wonderful it would be if we scrapped our exchange server and paid them only £5 per month, per mailbox. This was seen as a good idea until I did the calculation
£5 * 50 mailboxes = £250 per month * 12 months =£3k *5 year life of exchange server = £15k
Once the cost was pointed out it was realised that:-
1) We own our own server so startup costs were irrelevant
2) Even if we didn't, It would be cheaper to buy hardware and software than putting the existing one in the cloud
And 5 years would be a short life for a server in an SME!
All this 'put it in the cloud' hype is all very well if: a) you are in a city or somewhere with a fast internet connection and b) your clients are in the same situation.
When you are a small company out in the countryside and you have, at the best, a 1meg connection that may or may not be up 24/7 you keep everything in house of necessity.
I am of the old school that says if you have physical access to it then you control it, not some faceless corporation that may play fast and lose with your and your clients data.
Re: "I am leery of lock-in"
I emphatically agree. That, in its many forms, is perhaps the worst strategic mistake and eventually will bite you. It can actually take the company down.
Tangential aside: Hate the current 'cloud' buzzword. The term has been perverted, just the same as 'hacker' was, by people with no history and understanding. I have been on 'the cloud' in various forms since the 1970s.
For geezers rightly suspicious of this back-end infrastructure, though, it is finally becoming reliable enough to use. In some respects, your IT infrastructure is better off on the de-localized backend and that even includes traditional 'client' side stuff like GUIs.
Trevor is spot-on about a hybrid solution. If you have something that has to be saved or has to be accessible without a network connection, you need local infrastructure as well.
As a practical matter, I am an IT guy and I have just about an even mix of function on the cloud and locally. Except that the cost of having idle sessions on the cloud is impractical, I am beginning to prefer it.
Just like all the graybeard mainframe guys brought out of retirement for Y2K, if everyone switches to cloud storage and there are some huge exploits/disasters in a decade or two and everyone wants to move back to in-house storage, they'll have to open up their checkbooks!
The real issue with all this, is that these cloud companies are legally obliged to open up their systems to the first warrant that comes along.
I recently had a letter from HSBC saying that the USA government had demanded they release all details so as the US could identify US citizens holding funds abroad.
I have never been American, I have never lived in America, none of my ancestors were American
As a British citizen WHY must I be bound by US law, why must I turn over identity documents for the US government for money that is not even on US soil with a non-US bank?
Anyone who thinks it is good business to store details in cloud storage really need their heads tested.
What truly amazes me is how people fail to recognize some security properties of the cloud. When cloud vendor says that data is encrypted on its storage, people often emit happy/content noise and consider security solved.
But for processing you need to decrypt that data, right? On someone elses infrastructure, right? Even the encryption key is then in their RAM they can dump, right? They can clone your data, they can access your VMs without you or your security monitoring noticing.
So in essence, even if we diss the usual worn TLA org (FLA for GCHQ et al) stuff, we trust cloud provider personnel completely. Because cloud providers are known to pay good money to their admins, so they are motivated to keep your data secret or at least they don't care. Maybe it's time to get very friendly with your cloud provider's personnel. It may be a good business decision.
"The simple answer is that when the economy goes titsup.com, those folks that own their IT won't suddenly find themselves without the equipment necessary to run their business."
While I don't want to pick on a small part of your post, this part doesn't hold water. The way a cloud based company breaks compared to the way an ownership based company breaks is basically a wash, and certainly not important enough to push a company one way or the other.
I work in a shop that owns extensively. We have a mainframe and SAP, and storage designed for those needs. We pay far more for our storage than a green-field installation today will because we started 40 years ago and have had to evolve each refresh from a starting point of what was available last refresh. That said, we've had decades of IT-powered profitability that a new install wouldn't have. So while they can build something that does what our owned equipment does for less than we paid, we've come out ahead. The aggregated increase to profitability we've enjoyed since we started doing computation in the 60s is enormous compared to the difference.
I got my bank to charge me for my electricity and ISP bill, whether I remember it or not. If the leccy or ISP bill don't get paid, I can't pay any other bill over the internet and have to go pay for them manually on a Bank, while losing a day's work, which leads to losing more money. The cost of risking some billing error is far less than not having it paid and get the service cut.
I guess the principle applies to greater business: if the infrastructure you are thinking of renting would ultimately prevent your business to function in case of disaster, don't do it.
Economics, even convenience, are not at the root of the cloudy future we're on the road towards. It's just the logical outworking of the irrational, pseudo-religious devotion the "movers and shakers" have for outsourcing. Most of those who frequent this site know the truth. We've lived it. But right now there are too many business leaders who are either too dense or invested in this failed strategy for any course correction to take place. That massive recall of talent to fix the Y2K problem isn't going to happen again, because it would require reversing that now entrenched megatrend.
Besides, system administration, especially storage administration, is really hard. Years of (mostly) self-education (training? what's that?). Conniving, clueless managers. Long hours of tedious, mind-numbing and vision-deteriorating work punctuated by periods of sheer (professional) terror. Let me ask, how many of you have had your phone ring after getting off 4 weeks of 24x7 on call, and succumbed to the temptation to chuck it out a window? No CEO works that hard. Certainly no politician does. And, with all due respect, no COBOL programmer ever did.
Given all that, who in their right mind would leave retirement to go back into that meat grinder? Not me. Not ever. I'll make due with my little space at that trailer park in South Carolina, where you'll find me using a battered old iPhone for target practice.
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