Category Archives: Cringely

Amazon’s Cloud Monopoly

by Cringely, published November 2, 2015

GartnerCloudEarlier this year two different research reports came out describing the overall cloud computing market and Amazon’s role in it. Synergy Research Group saw Amazon as by far the biggest player (bigger in fact than the next four companies combined) with about 30 percent market share. But Gartner, taking perhaps a more focussed view of just the public cloud, claimed Amazon holds 82 percent of the market with cloud capacity that’s 10 times greater than all the other public cloud providers combined. I wonder how these disparate views can be possible describing the same company? And I wonder, further, whether this means Amazon actually has a cloud monopoly?
Yup, it’s a monopoly.

synergycloudAmazon has monopoly power over the public cloud because it clearly sets the price (ever downward) and has the capacity to enforce that price. Amazon is the OPEC of cloud computing and both studies actually show that because both show Amazon gaining share in a market that is simply exploding.

The way you gain share in an exploding market is by exploding more than all the other guys and we can see that at work by comparing IBM’s statement that it would (notice they are speaking about future events) invest $1 billion in cloud infrastructure in the current fiscal year, versus Amazon’s statement that it had (notice they are speaking of events that had already happened) spent $5 billion on cloud infrastructure in the past fiscal year.

Maybe $1 billion against definitely $5 billion isn’t even a contest. At this rate Amazon’s cloud will continue to grow faster than IBM’s cloud.

Wait, there’s more! Only Amazon can really claim they have a graphical cloud. While not all Amazon servers are equipped with GPUs, enough of them are to support millions of simultaneous seats running graphical apps. No other cloud vendor can claim that.

Continue reading Amazon’s Cloud Monopoly

Who is your IT outsourcing firm working for?

by Robert Cringely, published July 30, 2015

outsourcing-for-dummies-300x300While the U.S. Government has been remarkably opaque about the recently discovered security breach at the Office of Personnel Management (OPM), we know that personal information on at least 21.5 million present, former, and prospective federal employees was lost. The Feds claim Chinese hackers are at the bottom of it, which is disputed by the Chinese government. This, to me, raises a number of questions, especially about the possible role of IT outsourcing firms and implications for organizations beyond OPM. Does IT outsourcing make your data more vulnerable? Yes, I believe it does.

It’s easy to blame the Office of Personnel Management for its own troubles. Oversight was lax. The agency failed a security audit and didn’t seem to do much in response. When shit hit the fan and it became clear that the identity of almost every living person associated in any way with Federal employment had been compromised, the agency lamely offered 18 months of identity theft screening but then didn’t have the money to pay for it. Pathetic. Both the Obama Administration and Congress are to blame, the former for mismanagement and the latter for “starving the beast” by limiting the OPM budget, pushing the agency toward cost-saving decisions that at least to some extent led to the current crisis.

And a crisis it is. The scope of this hack is mind-boggling. There are 4.5 million Federal employees yet the identities of at least 21.5 million people are involved. How can that be? Well just to give one example, every person with a federal security clearance has to file annually (this seems to vary from agency to agency — see comments below) a 120-page Standard Form 86 updating information about their every social and business contact. All of those Standard Form 86s — millions of them — were stolen. Given that we live in a world of Big Data and six degrees of separation, it’s logical to assume that with some effort nearly every U.S. adult has been compromised in some way by this theft, whether or not you know that Uncle Jim used to be a courier for the CIA.

This is way worse than Target or Home Depot, yet those stories lingered in the press for months while OPM seems already to have disappeared.

Continue reading Who is your IT outsourcing firm working for?

IBM is so screwed

by Robert Cringely, published July 21, 2015

I’ve been working on a big column or two about the Office of Personnel Management hack while at the same time helping my boys with their Kickstarter campaign to be announced in another 10 days, but then IBM had to go yesterday and announce earnings and I just couldn’t help myself. I had to put that announcement in the context you’ll see in the headline above. IBM is so screwed.

Below you’ll see the news spelled-out in red annotations right on IBM’s own slides. The details are mainly there but before you read them I want to make three points. First, IBM’s sexy new businesses (cloud, analytics, mobile, social and security or CAMSS) aren’t growing — and probably won’t be growing — faster than its old businesses are shrinking and dying. This doesn’t have to be. IBM could carefully invest in some of those older businesses and become a much better company and investment.

Second is something that doesn’t immediately fall out of these slides but I think it should be said: from what I hear IBM’s analytics sales (the very essence of its Big Data strategy) have been dismal. Nobody is buying.

And a third point that could be an entire column in itself is that Google’s two latest cloud announcements (support for Windows Server and broad release of its Kubernetes container manager) effectively blow out of the water IBM’s nascent cloud operation.

Continue reading IBM is so screwed

Disney’s IT troubles go beyond H-IBs

by Robert X. Cringely, published on June 12. 2015


Disney has been in the news recently for firing its Orlando-based IT staff, replacing them with H-1B workers primarily from India, and making severance payments to those displaced workers dependent on the outgoing workers training their foreign replacements. I regret not jumping on this story earlier because I heard about it back in March, but an IT friend in Orlando (not from Disney) said it was old news so I didn’t follow-up. Well now I am following with what will eventually be three columns not just about this particular event but what it says about the U.S. computer industry, which is not good.

First we need some context for this Disney event — context that has not been provided in any of the accounts I have read so far. What we’re observing is a multi-step process.

Continue reading Disney’s IT troubles go beyond H-IBs

The H-1B Visa Program Is A Scam

by Robert X. Cringely, published June 16, 2015

h1b-visas-by-companyThis is the second of three columns relating to the recent story of Disney replacing 250 IT workers with foreign workers holding H-1B visas. Over the years I have written many columns about outsourcing (here) and the H-1B visa program in particular (here). Not wanting to just cover again that old material, this column looks at an important misconception that underlies the whole H-1B problem, then gives the unique view of a longtime reader of this column who has H-1B program experience.

First the misconception as laid out in a blog post shared with me by a reader. This blogger maintains that we wouldn’t be so bound to H-1Bs if we had better technical training programs in our schools. This is a popular theme with every recent Presidential administration and, while not explicitly incorrect, it isn’t implicitly correct, either. Schools can always be better but better schools aren’t necessarily limiting U.S. technical employment.

His argument, like that of Google and many other companies often mentioned as H-1B supporters, presupposes that there is a domestic IT labor shortage, but there isn’t. The United States right now has plenty of qualified workers to fill every available position. If there are indeed exceptional jobs that can’t be filled by ANY domestic applicant, there’s still the EB-2 visa program, which somehow doesn’t max-out every year like H-1B. How can that be if there’s a talent shortage? In truth, H-1B has always been unnecessary.

Continue reading The H-1B Visa Program Is A Scam