My interest in cloud computing was driven several years ago by a simple belief: the cloud is a disruptive technology that will transform the landscape of computing. The simple fact is that existing market leaders are incentivized to invest in sustaining their markets. Disruptive technologies are almost always easy for market leaders to ignore, since they start as inferior to existing mainstream solutions.
When cloud computing first arrived in the mid-2000s, its price and performance were inferior for most computing use cases.
Since computing is a collection of different industries, the response to cloud disruption has varied. To qualify the timing and impact of the disruption, it is important to consider the different types of computing workloads. Disruptive innovation is like a watching a slow moving tank heading your way: adapt or watch the treads roll over you. The belief was deeply influenced by Harvard professor Clayton Christensen’s 1997 book, The Innovator’s Dilemma, which postulates that established market leaders almost always fail when confronted with disruptive innovation.
In the language of The Innovator’s Dilemma, they develop value networks of customers, suppliers and shareholders that influence a company toward the sustaining changes necessary to maintain and grow their current markets.


But like all disruptive technologies, it offered features that appealed to a market segment with few or no alternatives: on-demand infrastructure and consumption-based pricing.
Some have embraced cloud computing, choosing to either migrate to the cloud or offer their own cloud services.
For the purposes of this analysis, we have chosen to categorize workloads as either cloud-centric and cloud-enabled.
So while I nodded in agreement, I kept his business card so I can check back in with him in a few years. While few today would argue cloud computing is not a disruptive technology, there is little agreement on the timing and impact of the disruption. These changes in characteristic appealed most notably to high tech startups, where the value of time to market and monthly billing trumped long term price and performance. Others have defended their current markets with a marketing-driven rebranding of their existing solutions, or by trying to offer low-end cloud services as a upsell to their more feature rich traditional services. Cloud-enabled is used to describe the legacy applications that are moved to the cloud (e.g. Web hosting providers were one of the first to recognize cloud computing as a competitor, as Amazon Web Services started to adversely impact their market share.


And still others have hedged their bets, trying to embrace the cloud while hoping to delay the disruption in their existing markets.
Not long after the cloud entered this first mainstream market, most industry analysts realized its disruptive potential and the cloud hype cycle had begun. It was only as they matured and began to enter the mainstream markets did established market leaders begin to view them as competitive. The below graph shows the timing of the progression of the cloud computing disruption, with an expectation that the underlying cloud infrastructure will have matured to offer comparable or better performance and features for cloud-centric applications by 2013, and for cloud-enabled applications by 2017. Those of us local to the Boston area need only to look at at the dead carcasses of our past - e.g. Digital Equipment, Wang, Data General, Polaroid, Apollo, Prime - to recognize the impact of disruptive innovation.



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Comments

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