The Virtual Cloud’s No Good if Hardware’s Cheaper Than Software!

Tue 4/28/2009 12:00 pm. Like many illustrious happening trends in my astonishingly-lengthy career — gallium arsenide and bubble memory are two perennials — there is a minor problem with most gee-whiz technologies that will dominate the world tomorrow if not sooner: there are usually competitive stuff that is always getting cheaper.

Today’s striking example is virtualization software and cloud computing. The tremendously bright future of these are based on server hardware cost: you will save vast sums from consolidating under-utilized servers (virtualization) or getting rid of them entirely in a pay-as-you-go rental scheme (cloud computing, i.e. at Amazon in the sky somewhere, instead of that dreary server closet).

Trouble is, as we all know, every year computers and servers get ridiculously cheaper. At the same time, the software required to make these things happen does not get cheaper: you still gotta get your programmer types to figure it out. Eventually — right about now, I’d say — the lines cross: Mr. Businessman can buy a cheap box and a fairly low-rent IT type can copy everything from the old box to the new box. Or he can pay a programmer to do a lot more work and take advantage of the new thing....

I’m not really trying to claim these wondrous technologies are DOA; but I am definitely claiming that the constant cratering of hardware prices is never mentioned in connection with these trends — which omission seems highly suspicious....