Siggraph06
11
Grid Utility Technology Drivers Enabling New Business Models July 30, 2006 Paul Kamp GridInstitute Fellow [email protected]
description
The business of cloud and utility computing. Breaking the technology link by tieing pricing to end user value
Transcript of Siggraph06
Grid Utility Technology DriversEnabling New Business Models
July 30, 2006Paul KampGridInstitute [email protected]
Sun Proprietary/Confidential: Internal Use OnlyPage 2 MediaGrid Summit July 30, 2006
Technology Context – The Net Effect
10,000X
1,000X
100X
10X
1X
1,000,000X
100,000X
1980 1990 2000
Moore’sLaw
Gilder’sLaw
Metcalfe’sLaw
Net Effect
For a given cost, performance improves over timePerformance
Time
Sun Proprietary/Confidential: Internal Use OnlyPage 3 MediaGrid Summit July 30, 2006
Business Context – The Net Effect
10,000X
1,000X
100X
10X
1X
1,000,000X
100,000X
1980 1990 2000
For a given performance levelthe cost to deliver a solution decreases over time
Performance
Time
Cost $/Unit of Performance
1/100$
1/1,000$
1/10,000$
1/100,000$
1/1,000,000$
1$
1/10$Cost to Deliver a 'Solution'
Sun Proprietary/Confidential: Internal Use OnlyPage 4 MediaGrid Summit July 30, 2006
Example solution – iTunes Music Store (iTMS)Bricks and Mortar distribution - Vinyl 45 RPM record
Artist Record Label Point of SalePromotion
Local Record Store
Inventory
Distribution
Content Creation
Manufacturing
Performing Artist
Songwriter
Sun Proprietary/Confidential: Internal Use OnlyPage 5 MediaGrid Summit July 30, 2006
Example solution – iTunes Music Store (iTMS)Bits and bandwidth distribution – iTunes Music Store
Artist Record Label Point of SalePromotion Online Music Store
InventoryDistribution
Content Creation
Manufacturing
Performing Artist
Songwriter
Sun Proprietary/Confidential: Internal Use OnlyPage 6 MediaGrid Summit July 30, 2006
Business Model – Increasing GM's Over TimeCost to deliver service decreases faster than price
$10,000
$1,000
$100
$10
$1
$1,000,000
$100,000
1980 1990 2000
Price
Time
Cost $/Unit of Performance
1/100$
1/1,000$
1/10,000$
1/100,000$
1/1,000,000$
1$
1/10$GROSS MARGINS
Cost to Deliver the Service
Price for Service that Technology is Delivering
Sun Proprietary/Confidential: Internal Use OnlyPage 7 MediaGrid Summit July 30, 2006
Utility and Application Delivery ChainEnabling the digital economy
Utility Computing Grid Distribution Applications
Utility Metering
Online Record Store
Direct Marketing
Delivery mechanism
Engine – Computer Center
Monitoring
Provisioning
Application Metering
Sun Proprietary/Confidential: Internal Use OnlyPage 8 MediaGrid Summit July 30, 2006
The Transition from Atoms to Bits
“The change from atoms to bits is irrevocable and unstoppable. Why now? Because the change is also exponential - small differences of yesterday can have
suddenly shocking consequences tomorrow.”
Nicholas NegroponteBeing Digital
Sun Proprietary/Confidential: Internal Use OnlyPage 9 MediaGrid Summit July 30, 2006
A Few Additional Examples● Tivo
– Service wrapped technology● Constant Contact
– Direct Mail marketing● Shutterfly, Kodak
– Digital film development and prints● Starbucks
– Internet Access as a utility . . .– Reseller of T-Mobile bandwidth
Sun Proprietary/Confidential: Internal Use OnlyPage 10 MediaGrid Summit July 30, 2006
A Few Proposed Media Examples● Digital Distribution of Film
– In 2003 the film industry spent $631M onphysical reels of film for US distribution
● Internet based distribution of radio– Save on Satellite time
● Digital Rendering of Film– Why buy the hardware when you can rent it
● Virtual Medicine– Telepresence– Medical Imaging
Sun Proprietary/Confidential: Internal Use OnlyPage 11 MediaGrid Summit July 30, 2006
Summary Recommendation – Next steps
● Rethink your business model to take advantage of the new modes of distribution and product development
– Define Partners, customers, delivery mechanism, that change the industry dynamics
– Application pricing must be in customer and solution terms
● Particpate in industry forums to enable the new business model
– Join the Quality of Service Technology Group (QOSTG)● Identifier: grid.qos● Web site: http://mediagrid.org/groups/technology/grid.qos● Email list: [email protected]
– Join the Grid Gateway Technology Group (GGTG)● Identifier: grid.gateway● Web site: http://mediagrid.org/groups/technology/grid.gateway● Email list: [email protected]
