When is a feature a bug?

by Robin Harris on Thursday, 17 November, 2016

Ten years ago in Enterprise IT: the elephant’s graveyard I wrote about the upmarket trap:

Engineering and marketing find it easy to justify fun new technology since a 10% goodness increase on a $500,000 machine is worth $50,000, while on a $1,000 machine it is worth $100 only if the customer is knowledgeable enough to notice. Which they aren’t, thank you very much.

So you keep moving to the high margin upmarket, ceding lower margin business to others. Finally you’re at the top of the upmarket, with all the costs and bloat, and then what?

As we climb upmarket we eventually see a declining return on investment in new features, and an increase in support costs, because less used code paths, more support training, and customers love to get creative with little used (or thought through) features.

The optimization trap
Is there a similar trap developing in cloud services? An optimization trap?

Take Cisco routers, poster child for the optimization trap. They kept adding features that customers requested. Customers liked that. So did Cisco, because lock-in.

Fast forward a decade and there’s 10 million lines of router code. The code is buggy. Maintenance and support costs are high. But Cisco is very profitable and has a lock on the market.

Which worked until the hyperscale guys realized that network costs were the fastest growing part of their infrastructure costs. Not a huge part of their costs, but PhDs can do the math and see higher bad, lower good.

Hyperscale data centers are commoditized. They don’t need, or want, thousands of corner-case features. In fact, they know exactly what they need, and build only that.

Way cheaper. And faster. More robust too. Enterprise IT guys, under pressure from the cloud’s much lower cost model, piped in, “hey, share the goodness!”

Cisco’s old business model is hurting.

Not only networks
Similar story in enterprise storage. Customers have two overriding requirements: availability and performance. RAID promised to provide both and, after a few years, did.

Enter lily-gilding, driving up costs, practically mandating fibre channel SANS. Today? Thanks to SSDs and cheapish RAM, a healthy share of the enterprise storage market has moved to the cloud and another, larger, piece has moved back into servers.

The StorageMojo take
Traps doesn’t occur in all, or even most, markets. Commodities are still commodities. Consumer good improvements raise a bar, not an umbrella.

But it was endemic to the enterprise IT market. Key elements include:

  • A single dominant paradigm.
  • Customers too busy to analyze needs and trade-offs.
  • High margin legacy vendors where disruption offers plenty of margin dollars.
  • High operation costs.
  • And key: outside players with the scale and resources to go their own way.

AWS is in danger of falling into the trap. Great margins. Dominant market share. Sticky data movement costs. More costly than those penny per month prices seem.

AWS advertises the number of new features – “services” – they add each year. Today that’s still a feature. But tomorrow?

If you attend the AWS re:Invent conference this month keep your antennae attuned for a giant reaching the top of a mountain. And let me know how close you think he is.

Courteous comments welcome, of course.

{ 1 comment… read it below or add one }

Paul A Houle November 23, 2016 at 11:12 am

If you think AWS is too complicated, just try IBM Bluemix…

Leave a Comment

Previous post:

Next post: