Musing on the state of the economy over the weekend I recalled the comments of AT&T cloud evangelist Joe Weinman who suggested at the recent Structure 08 conference in San Francisco that, when it came to the future of utility computing and `The Cloud’, “if the software licensing model doesn’t catch up, people will either be forced to pull from the open source world or the whole idea is going to drop dead under its own weight.”

Well, up to a point Lord Copper. I can see where he is coming from but there seems a sense of doom about the opinion that I don’t see and history, together with the cycles of economic fortune and more specifically misfortune, may even bear me out. For example, I got to thinking about the current economic slowdown and remembering others in the past. 

Economic times were pretty bleak in the late 70s when the first big disruptive technology, the personal computer, first started to appear in volume. Most of the mainstream IT vendors said it would unlikely claim a significant place in business. But who is in business now? Then the doom-laden days of the late 80s, epitomised by Black Wednesday, brought Standard High Volume (aka PC based) servers from the likes of Compaq and Dell right into the heart of enterprise client/server infrastructures. 

Now we have another economic slowdown and it is certain to impact growth in some sectors of the enterprise IT marketplace, and will provide an added spin to the fortunes of others.  

The standard response for most enterprises is likely to be a push for greater savings, so any short term investments are likely to be geared to `green’ issues, with a concentration on energy consumption savings rather than the more altruistic notions of reducing carbon footprints.  

There is also likely to be some push towards anything that gives users more Bangs for the same number of Bucks. So virtualisation is certain to grow in popularity. That is likely to bring a need for greater investment in new server platforms. These will not only be more suited to running virtualisation code, but also provide a jump in performance, a reduction in energy consumption and a reduction in maintenance costs that, collectively, should make the new investment worthwhile. 

But all that could indeed run up against the strictures Joe Weinman outlined. Yes, if the mainstream leaders of the ISV community don’t change their licencing policies, and change them soon, it could easily bring the potential of The Cloud to a grinding halt. But it could also bring those vendors to a halt instead. As Weinman said himself, users may be forced to `pull from the open source world’, to which the short response is `yes….and?’ Why not source applications and services from the open source world?  

One answer is that suitable code is not necessarily available, but this is where the current economic situation, coupled to the disruptive potential of The Cloud, may re-run old historical patterns. The Cloud most certainly represents a brand new marketplace with totally different dynamics, occurring at a time when many users will be putting current investment plans on hold for a while. 

That gives a significant opportunity for new start-up companies that do `get’ how The Cloud’ can be exploited to develop their technologies and business models. When users start to see their way clear for more concerted investment plans they will also be in the market for whatever maps best onto their needs – which are likely to encompass much greater flexibility and agility, far greater performance, lower maintenance cost through self-management and healing, and dramatically reduced energy consumption – with much of it available in practice as a pay-per-use service. 

This is likely to be beyond the scope of many of the currently leading ISVs, particularly if they stay with the old licence models. The start-ups are also likely to have far better technologies which hit the new sweet-spots that post-slump businesses will need. After all, a cynic might actually wonder why all the current crop of fancy financial risk analysis tools were unable to spot that large packages of dodgy debts were still very dodgy debts, despite being rebranded as `investment vehicles’.