A current major trend in enterprise IT is to re-centralize computing and have smaller clients. Total cost of ownership (TCO) decreases dramatically with centralization because maintaining and upgrading software running in one physical location is easier than doing it on many people's personal computers.
Most client software, even computationally intensive software like high quality graphics, has very low duty cycles. It does nothing most of the time. When you buy expensive PC hardware to support it, you are paying to support peak usage, the few minutes per day when it does the intense computations and you want the user interface to be responsive. The average computer resource usage of this software is very low, much less than 10%. Therefore running the software on a central server is much more efficient. There is the additional benefit that expensive infrastructure such as high-reliability disk storage does not need to be replicated through an organization.
There are many types of cloud services including virtualization, SaaS and web applications . Most of these have become highly effective in the last 10 years. Their development has been driven by companies such as Google, VMware and Salesforce.com who have based their businesses entirely on these types of services and have not pursued desktop computing strategies.
3G netbooks and very capable smart phone make adequate clients for Web Services, SaaS, Virtualization and other cloud offerings. They have the additional advantages of low power consumption that comes from their phone ancestry and mobility.
Here are some stories to support this
- Move from Windows Laptops to Netbooks in 4Q08 In 4Q08, worldwide PC processor unit shipments declined –17.0% quarter over quarter (QoQ) and –11.4% year over year (YoY); ... Intel's Atom processor for mini-notebook PCs (which Intel calls ''Netbooks'') continued to make a notable difference in the overall market performance but not enough to help the market avoid dramatic decline. Without Atom, worldwide PC processor unit shipments declined –21.7% QoQ and –21.6% YoY
- Intel readying for rise of Android-based netbook Intel readying for rise of Android-based netbooks Intel is expecting a flurry of Android-based netbooks in late 2009 and throughout 2010, and is preparing to support manufacturers with suitable chipset hardware. That’s according to VentureBeat’s “reliable source”, who suggests that the chipmaker - responsible for the Intel Atom N270 processor found in the vast majority of netbooks on the market today - is betting that Google’s open-source mobile platform will find a niche among what are usually Ubuntu or Windows XP machines
- RCR Wireless 2009 Wireless Forecast: Chips Meanwhile, Qualcomm has placed emphasis on its Snapdragon chipset for notebooks, netbooks and mobile Internet devices, with the latter category projected to surge as netbooks bridge the price gap between laptops and handhelds...Qualcomm will have competition, as Intel Corp. — the world’s largest chip maker — has targeted MIDs as PC sales rates slow, hoping to grab some of the market served by Apple Inc.’s iPhone. PC maker Dell Inc. is rumored to be preparing a smart phone play to open new markets. ...Meanwhile, most chip vendors are looking to core strengths and seeking bright spots in the year ahead. Smartphone sales are projected to grow this year — analysts vary on the strength of that growth — and vendors who make GPS, Wi-Fi and Bluetooth chips and 3G modems have a fighting chance, analysts have observed. ...“These are bright spots,” said Will Strauss, principal at Forward Concepts. “3G in general is still growing.”
- Cloud computing ascends the mainstream (The Age 20 Feb 2009) illustrates how mainstream cloud computing has become. Juicy Orange pays 10 to 80 cents per hour for the virtual service, which means it has stopped forking out for physical hardware - it has become a web development company with none of its own computers. "We don't spend hours and days waiting for physical hardware installations any more. I'd be hard-pressed coming up with any real disadvantages. Once we got over the learning hump, it's been nothing but better," says Mr. Murphy
Cloud computing requires fast, reliable and portable network connections. The telecommunication carriers who can provide this will achieve a pricing advantage over their competitors
Some Consequences of Movement to the Cloud
- Cannibalization of existing sales. What will netbooks do to the PC and laptop value chain? Currently netbooks are growing the PC pie but in the longer term US$250 netbooks may cannibalize US$1000 laptop sales at great cost to Intel and Microsoft. Netbooks are well-suited to cloud computing so netbook + cloud may replace laptop the Microsoft software. Google, salesforce.com, Amazon and other software already works well from the cloud while Microsoft Word does not so well-suited. The $250 vs. $1,000 price difference will drive change.
- Possible convergence of smart phones and netbooks.
- Processor wars. Intel Atom, Qualcomm Snapdragon, Freescale’s ARM based chipset.