My presentation from Structure 2016, presented on November 9, 2016

1. The State of Cloud 2016
The whirlwind of creative destruction
CTO
bryan@joyent.com
Bryan Cantrill
@bcantrill

2. First, the state of the Union
• Shocking just about everyone, Donald Trump has just won
the 2016 US Presidential election
• Donald Trump himself is an ignorant, petty man who has
shown little aptitude for or interest in governing
• There is clearly something much larger going on here…

3. Disruption
• In technology, we frequently speak of disruption when an
innovation yields a revolutionary leap in economics
• These innovations are the winds of Joseph Schumpeter’s
“perennial gale of creative destruction”
• Disruptive innovation is the lifeblood of the technology
industry: we don’t merely thrive on it, we actively seek it out

4. Disruption
• e.g., cloud computing is a canonical disrupting innovation,
effecting an orders of magnitude improvement in price:

5. Disruption
• e.g., cloud computing is a canonical disrupting innovation,
effecting an orders of magnitude improvement in price:
— Marc Andreesen, “Why Software Is Eating The World” (2011)

6. Disruption
• Historically, technological disruption was confined to
technology companies — but Andreesen saw this changing:
— Marc Andreesen, “Why Software Is Eating The World” (2011)

7. Disruption
• Andreesen’s prophesy has started to be realized: software is
emphatically eating the world — often by “new world-beating
Silicon Valley companies”
• …but last night we were reminded of a darker side to this
disruption: that people themselves feel devoured
• This is the “two Americas”: one that is exciting and full of
promise — the other in which a romanticized past seems
vastly preferable to a grim and scary future

8. The politics of disruption
• Last night, we learned that disruption isn’t only for economics:
democracy affords a kind of political disruption
• While we shouldn’t oversimplify what happened, it’s clear that
fear of economic dislocation is playing a significant role
• It is destruction without creativity
• But wait, it’s going to get worse…

9. Deeper disruption
• Software has already disrupted retail, personal transportation
• Disruptive innovation is coming to industries that employ
many millions of people:
• Truck transportation
• Healthcare
• Education
• Demagoguery notwithstanding, elections won’t stop this:
these innovations are economic, not political

10. So… cloud computing?!
• Software is the disruptive force that’s driving cloud computing
• Cloud is the gullet through which software is eating the world
• But cloud is not new — it’s a decade old! — and in fact it is
old enough to itself be disrupted…

11. Cloud disrupting itself
• The cloud used to be merely “infrastructure” — VMs
• But the “virtual machine” is exactly that: a virtual personal
computer (!!) that is a vestigial abstraction
• The rise of containers — and more recently, container
orchestration — has led to a disruption within a disruption
• Cloud computing is no longer infrastructure: it is about
delivering application logic — disruption! — faster

12. Aside: The Jevons paradox
• The Jevons paradox seems very likely to hold for containers:
greater efficiency will result in a net increase in consumption!
• Efficiency gains from containers are developer velocity...
• ...but requiring containers to be scheduled in VMs induces
operational inefficiencies: every operator must now think like
a cloud operator — maximizing density within fixed-cost VMs
• Greater consumption + operational inefficiencies threaten to
slow the container revolution — or make it explosive in terms
of cost

13. Disrupting the cloud: Container-native
• To realize the full economic promise of the container
revolution, we need container-native infrastructure
• The benefits of that infrastructure should accrue to the user,
not to the infrastructure provider
• Moore’s Law will continue to hold — and it turns out, a 2U
server with 512GB of DRAM can do a hell of a lot of work…

14. Disrupting the cloud: Public and on-prem
• Death of on-prem computing is greatly exaggerated!
• There are three key determinants for public v. on-premises:
• Economics: Rent vs. buy; OPEX vs. CAPEX
• Risk Management: Security/compliance — and also risk
factors associated with operator-as-threat
• Latency: The speed of light is a constant!
• Economics dominates: “private cloud” efforts that do not
deliver public cloud economics are doomed to (continue to)

15. Disrupting the cloud: Open source
• Open source has thoroughly disrupted the traditional, shrink-
wrapped proprietary software industry…
• …but public cloud services have become the new proprietary!
• This has generated a new generation of lock-in that — like its
forebear from a decade prior — is ripe for disruption…
• Especially when taken with the economics of on-prem
computing, open source will become a constraint

16. A (personal) sign of these disruptions…

17. Wait, Samsung?!
• Samsung buying Joyent may have been surprising — but we
live in a world in which the leaders of computing are a search
engine and an online bookstore
• Samsung is a consumer electronics company with an
incomprehensibly large footprint…
• …but they view their future as software
• At Samsung’s scale (and, in some markets, thin margins), it
makes no sense to be a public cloud customer!
• We believe that Samsung is only ahead of the curve..

18. Returning to the broader disruption
• Computing is accustomed to a pace of disruption that
exceeds the pace of generations…
• …but this disruption is now engulfing the broader economy
• It’s accelerating — we cannot put the genie back in the bottle!
• We ignore the human toll of this change at our own peril
• Computational thinking is literacy…
• And we as a society have an acute literacy problem!

19. Looking forward
• Disruption — economic disruption and political disruption — is
terrifying to the marrow
• The fear that is felt this morning by one America is one that
the other America has felt for a generation
• But we must not despair: human ingenuity — that of both
Americas — must not be underestimated!
• This is the beginning of a long conversation: how do we cope
with the pace of the change that we are inflicting?