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Does the cloud exist

Following Larry Ellison’s jab against Cloud Computing, Tim posts a good counter-punch…

So when Larry Ellison says that cloud computing and open source won’t produce many hugely profitable companies, he’s right, but only if you look at the pure software layer. This is a lot like saying that the PC wouldn’t produce many hugely profitable companies, and looking only at hardware vendors! First Microsoft, and now Google give the lie to Ellison’s analysis. The big winners are those who best grasp the rules of the new platform.

So here’s the real trick: cloud computing is real. Everything is moving into the cloud, in whole or in part. The utility layer of cloud computing will be just that, a utility, without outsized profits.

But the cloud platform, like the software platform before it, has new rules for competitive advantage. And chief among those advantages are those that we’ve identified as “Web 2.0″, the design of systems that harness network effects to get better the more people use them.

Nick argues there are inherent flaws to what Tim has to say… both are worth a read.

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