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Utility computing's 'dirty little secret'

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Structure 08 Cloud computing has its very own catch-22. If we can tap into the cloud, grabbing our compute resources on the fly, we can free ourselves from the old school software licensing models. But old school software licensing models may prevent us from tapping into the cloud.

"The dirty little secret of the utility computing business - and now, increasingly, the cloud business - is that 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," AT&T cloud evangelist Joe Weinman said today during a panel discussion at Structure 08, a mini-conference in San Francisco dedicated to all things cloud. "The cost savings will not be there, and the whole idea will never materialize."

In other words, all those companies building all those clouds can't rely on the Microsofts of the world for their back-end software - unless the Microsofts of the world change their licensing rules.

"With the cloud, you need a very dynamic response. Otherwise, there's no benefit," Weinman explained. "You may need a 1000 servers or you may need a tenth of that. You can't be forced to pay for minimum increments."

This view was shared Weinman's fellow panelist Tony Lucas, the CEO of XCalibre, a hosting outfit that offers a cloud known as FlexiScale. "A lot of [cloud] companies are having trouble with is their licensing," Lucas said. "I had a long conversation with Microsoft last week on licensing. I don't think they'll go on record as saying their [current licensing model] doesn't work [in the cloud], but it doesn't work."

And as panel moderator Alistair Croll pointed out, Microsoft has good reason to keep its licensing models just as they are. After all, as more and more people move to the cloud, fewer and fewer will pay for Redmond-built software on their own servers.

Of course, there is a simple solution, as Joe Weinman alluded to. If you're building a cloud, you can opt for open source, bypassing Ballmer and crew. So there's only a catch if you believe in the power of Redmond. ®

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