For the Industrial Internet, it's the cloud or nothing at all

I wanted to build on David Linthicum's recent post (Thank the cloud for making big data and IoT possible).  David's right - There will be no Industrial Internet of Things (IIoT) without the cloud.

Here's why.  Moore's law has conditioned us to expect​ ever lower semiconductor prices.  Fortunately, a similar trend holds true for disk drives.  The size of the blue box below is proportional to the cost of storage at the end of 2004 – the yellow box proportional to the cost of storage in November 2014 (sourced from John C. McCallum's excellent list showing 60 years of disk prices).

Fantastic news!  A better than 20-fold drop in storage costs over 10 years.  Maybe we at least have a shot at storing all the data that the IIoT will throw at us.  And there will be plenty of data to go around, as I illustrated in a recent posting.

But the tech costs aren't the issue, the people costs are.  The cost of key infrastructure management roles has remained pretty steady (as the chart below compiled from Computerworld data shows).

While salaries have risen in absolute terms, their real value has declined a little when adjusted for inflation.  Not surprising as there was a ferocious worldwide recession during that time...  But the reality is, the cost of key technical staff in the data center far outweighs the fall in the cost of technology.  The cost of integrating and managing a gigabyte isn't falling at anything like the rate of the underlying hardware.

In my view, designing, assembling, managing and upgrading the infrastructure required to wring value from IIoT data - cost effectively - is beyond the ken of most companies.  That's why there will be no Industrial Internet of Things without the cloud.  Cloud vendors – some of them at least – have already figured out what it takes to build and run infrastructure at massive scale, dirt cheap.  For an insight into this, check out James Hamilton's presentation from AWS re:Invent 2014 last November.  Or, if you don't have 47 minutes to spare (and you really should...),  read this for a summary and further analysis by Timothy Prickett Morgan.

James Hamilton is a Vice President and Distinguished Engineer at Amazon.  I have no particular axe to grind with Amazon – and frankly, I have no insight into whether Amazon's cloud is better or worse than any other.  That's mostly because most providers are very secretive about the scale of their cloud business and how it all hangs together.  (Hint to providers:  It's a secrecy that isn't helping sales…).  That's why it's so refreshing to hear James talk about the steps that Amazon have taken to ensure high availability and massive scalability, all for pocket change.  Because high availability, scalability and low cost are the very reasons why IIoT will live in the cloud, not in corporate data centers.