Last week I attended the Glue Conference here in Denver. As the name suggests, Glue is all about connecting things on the web; specifically, connecting infrastructure based services, to platform services through to applications and SaaS based services. Thematically, Glue is a rare targeted conference that fits well with my investment interests, which casually I describe as “all about platforms and services”. To have this conference in my “back-yard” was a real treat. First about the conference, I have to say that Eric Norlin, the conference coordinator did a great job with the agenda, which came off without a hitch. Eric made what is inherently a chaotic process look easy; no small feat. He had a big assist from the Foundry Group guys, and in particular Seth Levine. Great job to all!
A couple of key observations struck me after I’d had a chance to digest the two-day agenda and I wanted to share them here.
Bright Light on Services: For some time, I have believed that we were in the early stages of a major wave of service-based innovation. Certainly, there remains innovation in products and technologies that facilitate these services, but increasingly, services are where the action is. As if I needed further evidence, Glue offered it. The amount of innovation going on in the loosely coupled web is staggering, all facilitated by cloud-based services delivery platforms.
“The Cloud” Remains Early: You know you are early in a market cycle when no-one can agree on the definition of the market. The cloud, its boundaries, remain amorphous and poorly defined. This is not to say that the opportunity isn’t real, it is simply to say that the market has yet to sort itself out with common language that has shared meaning. The same terms are used to describe varying concepts. Take the simple stack-based construct of a) infrastructure as a service, b) platform as a service and c) software as a service; where the lines of demarcation are between these layers of the stack remain fuzzy.
One Size Does not Fit All: While one may be able to define the common architectural and infrastructure layers of the cloud with common language, applying them to specific business problems will take a much more flexible construct. The early innovation in the cloud seems to be in the social networking space where the use of APIs and cloud based service delivery platforms are comfortable to engineers. But I was amazed at how cavalier those with a focus on social were about applying cloud based principles to the enterprise space. I asked several people at the conference who would be accountable for quality of service, uptime, reliability, etc. to the the enterprise customer of small business owner in a loosley coupled application environment where multiple “services” were integrated into a single application environment (for example a third-party calendar application integrated into a CRM application. The answer I typically got was; “well the calendar is a small application so its no big deal if it goes down.” Really? Its as if I was speaking a different language. Krishnan Submaranian and I had the one thoughtful conversation I had at the conference on this topic. The topic of our conversation was “whose throat do you choke”, which he blogged on today. I couldn’t agree more with his post. Cloud and loosley coupled application developers will have to internalize these issues if they are to suceed in the enterprise and smb market.
The Big Barriers: There are some big unresolved questions that I believe must be answered before one can expect massive customer adoption of cloud based computing platforms. The first category is around data portabilty and ownership. Who owns the data? How does the data get transported from one platform to another? Will the cloud platform vendors adopt open platform business practices? There was alot of discussion about standards as the “way to solve these issues”. I see it a bit differently, which is to say that until platform vendors adopt open business practices (as opposed to “standards” which are subject to interpretation), the cloud will hold itself back. Vendors will have to learn to differentiate their services on factors that are fundamentally valuable to customers, as opposed to holding customers hostage through data lock-in.
All in all, if you are intersted in the cloud and the loosley coupled, web, you really should attend Glue next year. I had a great couple of days, met some great people and learned alot. Most of all, I remain excited about the investment prospects in this area.