Tim Anderson’s ITWriting

The easiest way to make money on the web is by signing up as an affiliate for Amazon.com and/or Google (Disclaimer: I have both). Although most affiliates achieve only small and occasional income, it is possible to earn significant amounts. With Amazon, you can create your own specialist online store and make it a viable business.

If there is anyone in North Carolina in that position, they have woken up to a nasty headache. Amazon has sent out emails telling them:

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

Affiliate James Barrett remarks:

This is absurd! No Legislation has passed and been signed nor does it appear it will … The lack of notice on this so associates could take action shows me Amazon has no respect for those sites it has been getting low cost referrals from.

My knowledge of North Carolina politics is limited; but what interests me is what this says about the Internet economy. A few giants dominate; they can afford to do without your business and you have little recourse if one day they change their terms to your disadvantage, or as in this case, cut you off completely.

The issue of how to tax online stores is important, of course, and I suspect Amazon’s move is part of a strategy to oppose taxes which will impede its business – but implemented, apparently, with scant regard for its affiliate partners.

Yesterday I attended a presentation from NTT Communications, a managed hosting provider, on the plans of 200 CFOs and CIOs from larger UK organizations (500+ employees) with respect to cloud computing. Since NTT would presumably like more companies to stick more stuff on its hosted servers, I presume it was hoping for a strong endorsement of the idea. Unfortunately for NTT, that was not the case. Fewer than 20% of those surveyed think they are using cloud computing now, a bit more than 20% think they will adopt some of it in the next two years, but – and here’s the real killer – cloud computing is way down the list of investment priorities, at around 5%. I’m not clear 5% of what exactly; but the report says it is the lowest priority.

What are companies spending money on instead? Servers and storage, network infrastructure, security, company web sites, backup and disaster recovery, unified communications, desktops and laptops, software, almost anything else in other words.

What’s wrong with the cloud? The three top issues, for those surveyed, are security, immaturity, and reliability.

These are valid concerns, though each one is open to debate; but the entire survey was undermined by the fact that most of those surveyed admitted to not knowing what cloud computing is. The reason is not ignorance, but the many and various ways the term is used. The common strand is that it is something to do with the internet, but even that is undermined if we describe virtual on-premise servers as a “private cloud”.

What are the varieties of cloud? Almost infinite, but here are a few:

• Multi-tenanted applications such as Salesforce CRM, Google Docs, NetSuite. This is the model that has the biggest inherent economic advantage.
• Hosted application platforms including Google App Engine, Microsoft Azure, Force.com. These are hosted application servers, where you write the code, taking advantage of integrated hosted services for storage, identity, transactions and so on.
• Utility services such as Amazon S3. It’s a great example: S3 offers nothing but storage, though you can use it in conjunction with other Amazon web services.
• On-demand infrastructure such as Amazon EC2. You get virtual servers to do what you like with. NTT’s services are mainly in this broad category. It’s cloud but you are mostly not getting the benefits of multi-tenancy.
• Anything on the internet. Running a web application? Hey, you’re in the cloud.

If we are going to have a sane discussion about these things, we need to know what we are talking about. Maybe rather than asking companies whether or not they are doing that cool cloud stuff, it would be better to enquire how they see their use of the internet evolving.

Another big question is the extent to which companies are willing to buy in their IT infrastructure as a third-party service. Although it makes obvious financial sense in most cases, it is a big ask given how business-critical it is, hence the concerns about security, immaturity, reliability.

Smaller companies with ad-hoc IT systems are likely to be more amenable to the idea, but this group was not covered by NTTs survey.

Conclusions? The main one is “watch this space”. In the end I reckon sheer economics will drive cloud computing adoption – in all the areas described above – but the one thing NTT’s survey proves is that larger organisations are in no hurry to make that jump.

I’ve read the Open Cloud Manifesto with interest. It’s hard to find much to disagree with; I especially like this point on page 5:

Cloud providers must not use their market position to lock customers into their particular platforms and limit their choice of providers.

Companies like IBM won’t do that? I’m sceptical. Still, it is all very vague; and companies not on the list of supporters have been quick to point out the lack of any effort to achieve cross-industry consensus:

Very recently we were privately shown a copy of the document, warned that it was a secret, and told that it must be signed "as is," without modifications or additional input.  It appears to us that one company, or just a few companies, would prefer to control the evolution of cloud computing, as opposed to reaching a consensus across key stakeholders

says Microsoft’s Steve Martin. Amazon, perhaps the most prominent cloud computing pioneer, is another notable absentee.

It is a general truth that successful incumbents rarely strive for openness; whereas competitors who want to grow their market share frequently demand it.

The manifesto FAQ says:

There are many reasons why companies may not be listed. This moved quickly and some companies may not have been reached or simply didn’t have time to make it through their own internal review process.

A poor excuse. If a few more months would have added Microsoft, Amazon, Google and Salesforce.com to the list, it would have been well worth it and added hugely to its impact.

That said, I’ve found Amazon reluctant to talk about interoperability between clouds, while Salesforce.com makes no secret of its lock-in:

… you are making a platform decision, and our job is to make sure you choose our platform and not another platform, because once they have chosen another platform, getting them off it is usually impossible.

said CEO Marc Benioff when I quizzed him on the subject. I guess it could have taken more than a few months.

The Amazon MP3 store has arrived in the UK, and I’ve noticed that it is much cheaper than Apple iTunes for many items, particularly when buying complete albums. Here’s an example: Day & Age by Killers. £7.99 on iTunes:

and £3.00 on Amazon:

That’s 62% cheaper. Amazon also sells the CD for £8.98. Since you get more for your money with a CD (no lossy compression, physical backup and sleeve notes, transferable rights) that strikes me as about right.

The MP3 format is also more convenient than iTunes AAC, since it is supported by more devices.

I’m intrigued though. Why is Amazon so much cheaper? A last-ditch effort by the industry to create serious competition for Apple?

I’m at the Dreamforce conference in San Francisco, where Marc Benioff, CEO of Salesforce.com, and co-founder Parker Harris, are presenting new features in the force.com platform.

The first is a built-in ability to publish your Force.com data as a public web site. The service is currently in “developer preview” and set for full release in 2009. Even in preview, it’s priced per page view on your site. For example, if you have the low-end Group Edition, you get 50,000 page views free; but if you exceed that limit, you pay $1000 per month for up to 1,000,000 further page views. It would be unfortunate if you had 50,001 page views one month.

The second announcement relates to Facebook integration. This is a set of tools and services that lets you use Facebook APIs within a Force.com application, and create Facebook applications that use force.com data. Sheryl Sandberg, Facebook COO, says this is “Enterprise meets social”. The problem: Facebook is consumer-focused, more play than work. Sandberg says this deal will launch Facebook into the Enterprise. This will be an interesting one to watch.

Third, there are new tools linking Force.com with Amazon’s S3 and EC2. Tools for S3 wrap Amazon’s API with Apex code (Apex is the language of Force.com) so you can easily add unlimited storage to your Force.com application. Tools for EC2 delivers pre-built Amazon Virtual Machines (AMIs) that have libraries for accessing Force.com data and applications. The first AMI is for PHP, and simplifies the business of building a PHP application that extends a Force.com solution.

Interesting that Salesforce.com is providing two new ways to build public web sites that link to Force.com – one on its own platform, the other using PHP and in future Ruby, Java (I presume) etc.

It’s worth noting that you could already do this by using the SOAP API for Force.com, and there are already wrappers for languages including PHP. This is mainly about simplifying what you could already do.

More information is at developer.force.com.

Amazon made multiple cloud announcements yesterday, just ahead of anything Microsoft might be pitching at PDC next week. The Elastic Compute Cloud is out of beta; there’s beta support for Windows 32-bit or 64-bit at $0.125 per hour; there’s a new web-based management console; and new automatic load balancing and scaling.

The last points may be the most significant. Smooth scaling is one of the toughest problems for any enterprise or busy web site. On demand scaling is totally compelling.

There’s still something missing. What if the service goes down? SLAs, sure, but saying to the boss “we’ve got an SLA” is little help if your business is losing thousands every hour through unavailability. I’d like to see something about failover to a non-Amazon service, or some convincing reason why we won’t see repeats of the downtime that has afflicted Amazon a couple of times already this year.

Here’s another sign the service is growing up. Wordpress comment moderation shows me some basic info about the source IP of comment posters, and I noticed an item of spam yesterday that was sourced from an Amazon EC2 server:

No, it wasn’t one of the new Windows VMs! I traced it to a Swedish site running Plone, emailed the company to point out the problem but haven’t yet had a response. The spam itself makes no sense; probably a test.

Update: I received an explanation from the site:

We have been running a proxy on EC2 that rewrites certain websites for demo purposes. It has just been up for a few days, but it seems that someone thought it was a nice way to relay spam (we only proxy port 80, so just the message board kind).

Just attended a session here at FOWA from Amazon’s Jeff Barr and Flexiscale’s Tony Lucas on cloud computing. These vendors have similar offerings (in kind, but not in scale; Flexiscale is tiny by comparison). Lucas had told me he would talk about interoperability between Amazon and Flexiscale but did not do so, nor did Barr mention it.

I took the opportunity to get in some questions at the informal gathering after the session. The context is that Amazon has had serious outages this year, which will not have gone unnoticed by organizations considering its platform; the ability to import and export AMI’s (Amazon Machine Instances) would help users to implement failover plans. Is either Amazon or Flexiscale considering support for the Open Virtual Machine Format (OVF), used by VMWare?

Neither is doing so. Lucas muttered something about standards driven by commercial agendas; Barr said Amazon would wait and see and did not want to standardise too early; and that customers were not asking for it.

What interested me was the intense interest from other developers who had come up to ask questions, in this topic of interoperability and avoiding lock-in. This makes me wary of Barr’s comment that there is little interest.

In mitigation, Lucas said that his company can already import AMIs, but does not do so because it might breach Amazon’s terms and conditions. Barr pointed out that AMIs are just Linux VMs so you can easily migrate their contents. Both good points. Nevertheless, it strikes me that VMWare’s vCloud offering goes beyond either Amazon or Flexiscale in this respect.

Lucas made a couple of other observations. He said that Google’s BigTable, which sits underneath the AppEngine API, is not open source and makes  it impossible to implement AppEngine on his platform. He added that Flexiscale was always conceived as a platform offering, not just on-demand virtual servers, and will announce a platform based on a 100% open source stack shortly (aside from the Windows version; sounds like there will both Linux and Windows available).

You will soon be able to run Windows on Amazon’s Elastic Compute Cloud (EC2), in a fully supported manner. Jeff Barr says this is scheduled for public release by the end of 2008:

The 32 and 64 bit versions of Windows Server will be available and will be able to use all existing EC2 features such as Elastic IP Addresses, Availability Zones, and the Elastic Block Store. You’ll be able to call any of the other Amazon Web Services from your application. You will, for example, be able to use the Amazon Simple Queue Service to glue cross-platform applications together.

This opens up EC2 to a substantial new group of potential customers. They will be asking, of course, if the cloud can be made reliable.

Now, how about integrating with Hyper-V and/or VMware so you could easily move your servers in and out of the cloud?

Like “Web 2.0”, the term “Cloud computing” is one that nobody much likes, but is hard to avoid. Argue all you like; but there are real and significant changes, and we need to call it something.

I wrote a piece in today’s Guardian which looks at some of the issues. Tony Lucas at Flexiscale, a cloud computing provider, makes the point that “occasional large outages are actually more likely than small ones”. His words were prophetic; I spoke to him shortly before Flexiscale itself went offline for two days. That’s unacceptable for anything business-critical; there has to be a plan B. SLAs by the way are not the answer; they promise some level of compensation in the event of failure, but this is typically miniscule in comparison to the business consequences.

Virtualization could be the answer. If your virtual servers at one provider go offline, just bring them up with another provider. That implies interoperability; and if this interests you, note that Amazon’s Jeff Barr is speaking on this subject with Lucas at the Future of Web Apps conference in London next month. Another development is VMware’s vCloud, which promises to “federate between on-premise and off-premise clouds” with its vServices. VMware is also a big supporter of the Open Virtual Machine Format (OVF), a format for portable virtual machines. If the reliability problem is solved, it will remove a key barrier to adoption of this kind of on-demand computing.

Amazon has announced a partnership with Oracle, to run Oracle’s database and middleware products on Amazon’s Elastic Computer Cloud (EC2). Specifically, the products are Oracle Database 11g, Oracle Fusion Middleware, Oracle Enterprise Manager; and for the OS, Oracle Enterprise Linux. A key feature is that both Amazon and Oracle offer full support for these products and configurations. Amazon’s web services are growing up.