eCloudM

Part II - The Confluence of Cloud Computing & the Semantic Web - Heavy on the Semantics

2008-10-15T09:02:00.009-06:00

The nuances of the dance between these two trends is indeed promising. The more I understand and learn about the Semantic Web from experts like Dean Allemang, and understand the utility of the Cloud, the more I appreciate the potential of these trends to shape distributed computing.

Recently, I have had the privilege off getting my hands dirty in supporting a client to develop, what they have termed, a Semantic SOA. The idea being that the discovery, governance and the structure and content of the payloads of the web-services within the architecture, are based on semantic models (ontologies). The underlying language of these models (Resource Description Framwork/RDF Schema/Web Ontology Language) explicitly support another important quality of SOA - semantic interoperability; which ensures that consumers and providers within the Cloud share germane and appropriate information in a consistent manner.

The big promises of Cloud Computing: economies of scale and improved resource utilization, align artfully with semantic principles and supporting features. Migration to the Cloud for many will be incremental and include the distribution of information across a virtualized infrastructure. Features of the technologies/specifications underlying the Semantic Web (RDF/RDFS/OWL) lend themselves to these requirements. They are intended to formally describe information concepts, terms and relationships within a domain. These specifications allow your subject-matter-experts to incrementally model their areas of expertise and because of their structure and underlying rules these domains/concepts can be easily combined to represent a verbose information model representing your data architecture. This model can then be used to aid discovery, invocation, XML Schema Defintion (XSD) / Web Service Definition Language (WSDL) definitions and integration in an incremental and unambiguous fashion.

Additionally, these features help describe entities and provide clear, non-ambiguous, semantics of a service offering. Service discovery and composition within the Cloud can all be supported by the features and standards of the Semantic Web.

Higher order specifications like RDFS and OWL support the concepts of inferencing. Inference relationships provide an eloquent and human understandable way to define and describe robust relationships between information concepts and data. Machines that consume these models will be able to infer additional information that may be useful to the consumer or application residing within the Cloud. The reality of it is, more and more of our data is going to be living in the Cloud and this data will be distributed. Pushing our data and applications out from internal information silos to Cloud based silos, has some benefits – reduced IT costs, support, maintenance, scalability, etc… But to have a virtualized infrastructure with scalable resources with applications and information distributed across the computing grid is a real benefit. With distribution comes complexity. We need our data to more useful to our business, our partners, anyone who might utilize our information. For it to be useful, it needs to maintain its integrity, its purpose and its meaning when combined with other data from other sources within the Cloud. Semantic concepts, like inferencing will do just that. Using a semantic model (metadata) we can start with some stated information and determine related and relevant information as tough it had been explicated stated. In the Cloud we need our data to more consistent and connected. With the distribution and virtualization of our systems, it will become imperative that our data become “smarter.” Semantic models will allow us to focus on informational concepts and smarter business processes and applications that reside in a scalable virtualized environment – the Cloud.

Cloud Computing Mindshare by Region

2008-09-25T06:26:00.004-06:00

A few days ago Peter Laird posted an interesting note to the Cloud Computing group. He took his raw analytics data for his blog and posted the percent of visits by continent. Soon after both John Mills and I did the same for our respective blogs. I thought it would be interesting to aggregate the information together and see what falls out.

This is by no means scientific - more indicative than definative - but it does give an idea about where the Cloud Computing interest is coming from.

The Americas are obviously the MindShare leader (at least for 3 blogs written here in the U.S) - with Europe and Asia coming in next.

When we look at which countries are driving the traffic within the regions a few stand out. The U.S. and Canada are driving the Americas Traffic. In Europe it seems to be the United Kingdom, Germany, France and the Netherlands. Asia is Japan, India, South Korea and China. Oceania is primarily Australia.

I'm still trying to decide if this is just interesting information or tells me something. I wasn't surprised by anything other than South Korea. The methodology is also somewhat biased because of the regional nature of the Blogs.

However some indicative information is better than none.

The other blogs used to help pull this information together -

John M. Willis
IT Management and Cloud Blog

Peter Laird
He has a great entry that delves much deeper into the details behind his numbers.
Comparing Cloud Computing Mindshare Levels Between the U.S., Europe, and Asia

Computing Cloud - Do Consumers Lead the Way?

2008-09-13T09:17:00.002-06:00

On September 12 the Pew Research Center published a study on Cloud Computing and it's adoption within America. You can see the study here.

After reading the study my first thought was - great information too bad it doesn't help me understand adoption rates within Large Enterprises, Mid Size Enterprises and Small businesses. The markets that I typically care about on a day-to-day basis.

This view was reinforced by the types of Cloud Computing applications they polled on: Online Email, Videos, Photos and data backups. All consumer - not business - oriented activities.

After lamenting for a bit about ever finding true market data for Cloud Computing I'm beginning to wonder if I'm thinking about the market in the right way. Is there a difference between the Enterprise and the Consumer? How many of the people within this study were using online Email applications either from work or for work related activities? The Pew report says that 56% of Internet Users have a Yahoo, Google, Hotmail or other account. 5% pay to store documents online - and another 5% use the Internet to backup their hard-drives.

Now I realize that there is a big difference between a large Multi-Global enterprise adopting Salesforce.com or leveraging computing cycles from Amazon's EC2 and a consumer accessing their online Email account. But what I question is - how much Cloud Computing adoption has occurred from within large Enterprises - without the Enterprise explicitly acknowledging or paying for the service? Are large Enterprises already leveraging and gaining benefits from the Cloud simply because their people are adopting the technologies in order to simplify their day-to-day activities.

Now looking at the Pew study it seems to indicate something very different. It shows that Americans are adopting the Cloud in large numbers. Enterprises are already seeing increased productivity due to this adoption. While most companies have not even heard of the Cloud or put in place any formal procedures or projects to adopt Cloud computing, their employees are already using it.

This reminds me a bit of when Web browsers first started to gain traction. Enterprises did not immediately see the benefit of using a browser to access core Enterprise applications. Instead their users were off looking up information and browsing the web - in order to help them make their job's easier. The employees were the early adopters and the Enterprises only later realized they could take advantage of the same technologies to improve their bottom line.

I don't think the Pew study is a big shock. None of their findings seemed to be way off what I would have assumed based on anecdotal evidence. However it does crystallize for me that the Cloud Computing wave might be more than just hype - and the start of another transformation of the Enterprise.

CherryPal vs. the Laptop

2008-07-23T05:48:00.000-06:00

They other day my wife's laptop died. This is a serious inconvenience to her, as she uses her laptop for both work and home. As a medical practitioner she often has to look up drug interactions, print off medical forms, and investigate new treatments. At home she looks up recipes, watches movies, plays sudoku, authors documents in MS Word and reads her Email.

So after reading about the new CherryPal, "Get onto CherryPal's 'Cloud Computer'", I started wondering if a Cloud based computer could replace her need for a laptop?

My first premise is that the computer will be hooked up to our HDTV as the monitor with a remote Keyboard and Mouse. That way we don't incur the additional cost of a monitor. Using this premise I can figure out the cost differential between the new CherryPal and a basic home laptop, say the Dell Inspiron Dual Core with 2GB RAM and 160GB Hard Drive.

As you can see the CherryPal comes in about $300 lower than the Laptop, not bad. So now to the real question - can it replace the laptop for functionality?

* Only Streamed Videos, this precludes iTunes and Amazon UnBox
** Their web-site claims that "We provide drivers in the cloud to support printers", I am dubious about how this works and how well
*** Documents will have to be converted from MS Word to Google Docs

So is it worth it? No movies, not portable between home and office. Saves us about $300 over the laptop. For us the answer is - No. The inability to truly play movies is a killer. Given that our premise is to hook up the laptop to our HDTV so that we don't incur the cost of a new Flat-Screen Monitor (and have to find someplace to set it up) - not being able to play Amazon Unbox or iTunes movies would be crazy. If I go and buy a new flat-screen monitor I wipe out the $300 price savings and still can't move the system from home to work.

I think the concept of a truly web based Cloud Computer is cool. I have thought so since Sun Microsystems tried to produce their first "Java only" desktops in the late 90's. However, as a consumer machine it falls short of the need. For certain Enterprise applications, especially enterprises that run almost all of their applications in a web model, the device might have a good fit. But for me - I'll stick with the Laptop for now.

So the real question is - stick with Microsoft or jump ship and get an Apple?

The Confluence of Cloud Computing & the Semantic Web – Part 1

2008-07-22T09:47:00.000-06:00

In the following series of blogs I will attempt to capture the nuances of the dance between these two major mega trends – Cloud Computing and the Semantic Web.

For purposes of this blog, it is suffice to say that these emerging trends have yet to realize mainstream adoption. In fact, we are still grappling with the concepts and clarity of the real value.

Just in the last couple of days I have been exposed to surveys and articles that suggest cloud computing is low on the priority list for CIOs and not well understood Study: IT jobs will drop in 2009, and the real value of the Semantic Web is suspect - The Semantic Web, Syllogism, and Worldview.

Despite the skepticism and adoption rate, both of these mega trends promise to have disruptive influences on the way we do business. These mega trends are taking well established computing ideas, and expanding them and making them work across the Internet. For many, cloud computing is an extension of grid/utility computing, software as service (SaaS), managed services platforms, web-services and platform services – What cloud computing really means.

The Semantic Web, as described by Tim Berners-Lee is an extension of the existing web paradigm, where the target audience is the human. The new extension is intended to develop languages for expressing information in a machine processable form; interoperability taken to a new level.

Tim Berners-Lee defines the Semantic Web as a web of data that can be processed directly and indirectly by machines. “The Semantic Web is a web of data, in some ways like a global database.” - Semantic Web Road Map. The promise being that computers can search, acquire, present, filter, and manipulate data in a useful way based on the data’s meaning and its relationships. This is accomplished by defining structured sets of information and inference rules that allow machines to understand the relationship between different data resources.

One of the promises of the Semantic Web is ease of integration of information across a wide spectrum of data artifacts and systems. There are solutions to the data integration challenge but require extensive transformations and one-to-one mappings between elements across systems and repositories. What puts the promise of the Semantic Web above the fray is the ability to allow a machine to connect to any other machine and exchange and process data efficiently based on built-in semantic information that describes each resource. Metadata that allows machines to understand relationships and context. This semantic information allows disparate data sources to become compatible through adopting a consistent relational model across structured and unstructured information.

Conceptually the cloud represents a ubiquitous set of computing services that are interconnected and seamlessly exchange and process information. But as Galen Gruman accurately states, in his article, What cloud computing really means, “Today, with such cloud-based interconnection seldom in evidence, cloud computing might be more accurately described as "sky computing," with many isolated clouds of services which IT customers must plug into individually. On the other hand, as virtualization and SOA permeate the enterprise, the idea of loosely coupled services running on an agile, scalable infrastructure should eventually make every enterprise a node in the cloud.”

As these mega trends mature the confluence of the two may indeed bring to fruition the promise of loosely coupled ubiquitous services that have context and are ultimately understood by machines.

In the blogs that follow I will explore what all that really means and what is the real value?

Adoption of the Cloud

2008-07-08T06:08:00.000-06:00

There is an interesting article over at Infoworld talking about the dangers of cloud computing. It is an intriguing read about how cloud computing infrastructure is not secure enough for the Enterprise - but more secure than existing mid-size enterprises probably have in place.

The premise is that cloud vendors don't put as much investment and resources into security as do large Enterprises - but more than small companies. This might well be true. Ephraim Schwartz, the author of the piece, goes on to talk about the what applications truly belong in the cloud, and which don't. Non-mission critical applications belong within the cloud, and mission-critical applications do not.

I tend to agree. However, there is another classification of applications that will not readily map to the cloud - ones that support business processes that differentiate an organization.

Companies gain competitive advantage in the marketplace through many factors. I would argue that many companies today have only a small number of factors to play with - Service, Quality, Price, and Availability. The way they deliver these four factors is their competitive advantage. This competitive advantage is built into their internal business processes, culture and approach to the market. All of which are supported by technology.

The way a company uses technology to create business advantage, link internal processes, communicate, share information and support their business - is the competitive differentiator most companies have.

Many business critical applications will not move to the Cloud - not because of a concern about security - but because of it's inability to enable differentiation. Based on some of these assumptions I believe that we can map out, to some level of accuracy, the types of applications that different businesses will adopt.

Large Enterprise - Early adopters of Transactional Service, Moderate Adopters of Infrastructure (for non-critical applications), and late adopters of SaaS applications.

Small to Mid Size Enterprises - These folk will also be early adopters of Transactional services, and medium to early adopters of Infrastructure. They will view the cost savings related to using infrastructure services as a competitive advantage. They will also adopt SaaS applications, but at a slower rate - and for specific types of applications that are either commodities, non-critical or require a level of B2B collaboration. For instance Sales Force Automation, Supply Chain Demand Planning and Business Process Hubs.

Small to Mid Size Businesses - Early adopters of Applications (SaaS) due to it's cost benefit, pricing flexibility and low up-front cost structure. They will also take advantage of Cloud Infrastructure capabilities - but only as they are wrapped with business friendly applications. Don't look for this group to directly write web services that take advantage of Amazon S3, they will wait for the application they can install on their Windows XP Server. Low adopters of Transactional services - due to the IT requirements around the data integration.

Cloud Computing - Startup Opportunity?

2008-05-22T14:49:00.000-06:00

Eric and I are watching the cloud computing phenomenon with great interest. As software entrepreneurs we are intrigued by the possibilities that cloud computing may hold for innovators. It is obvious that cloud computing is real and building momentum.

The web is littered with articles about the behemoths (Amazon, Google, IBM, MS) building city-block size data-centers, platforms, and defining new business strategies around the computing cloud. We also know that Web 2.0 companies are leveraging the low cost, quick time to market, and scalability benefits of cloud computing.

As a middleware guy, I wonder if there is or will be a market for the smaller innovator to provide applications and services within the cloud or is do the big boys already have a strangle hold on that market?

A non scientific, yet interesting way to answer that question is to examine the amount of money being put into cloud computing ventures. Venture Capitalist (VCs) make their living on being able to predict the future and align their resources accordingly. Are VCs financing non-Web 2.0 startups that provide infrastructure plays in the cloud?

I have scoured the web and have found very little information to dogmatically answer that question. We are a bit early and we are still asking question like, What is Cloud Computing? Yet, I believe there is a tremendous amount of opportunity for innovative companies to make rain in the every evolving cloud. Case in point, startup RightScale recently raised $4.5M for their resource management application.

Stepping outside the cloud for a minute, there are tremendous opportunities to help the enterprise leverage the benefits of the computing cloud. Frank Gillett, from Forrester Research suggest that a lack of security and service-level agreements are hurdles that need to be overcome before clouds are embraced by big corporations. Hurdles... that's another word for opportunity!

Market Sizing the Computing Cloud

2008-04-26T19:30:00.000-06:00

When looking at the Computing Cloud from a market perspective a number of very obvious questions start to arise. How big is the computing cloud? How many companies are in the cloud. How much revenue is actually being generated by the Computing Cloud, who is actually buying Cloud services and most importantly what is the Growth and opportunity within the Computing Cloud?

My gut tells me that the Computing Cloud very well might be another disruptive technology. A game changer that transforms how applications and services are delivered to the market. But good companies don't make decisions based on a gut feels, they make them based on business models that promise a strong return on investment.

Many companies are looking at the Computing Cloud as a way of reducing costs and delivering core services to market faster. However some companies are looking at the Computing Cloud as a new market itself. Companies like Google, Microsoft, Amazon, eBay and SaleForce.com are already in the market. Others like RightScale, who recently raised $4.5M in financing, are just now entering. How do these companies figure out what the Market opportunity is?

I have started to scan the web to try and see how much information is actually available on the topic so far. The results are pretty slim. Gartner, Forrester and the like might have some market data, but nothing that showed up on any of the public sites.

So far I have been able to find a few data points on Cloud Computing. There is a great site for registering all of the APIs available for Cloud Computing - programmableweb.com. The site not only lists all of the APIs available (755 as of this writing), but also lists the mashups that use these APIs. They also track the most used APIs, by category and vendor, by all of the Mashups. I took a couple of snapshots of the API usage and plotted it's 1 month growth, by category.

Click to Enlarge
This chart tells us a few things. First off the most used APIs for mashups are mapping. This does make sense, as many web sites are now embedding maps and context sensitive location information. All one has to do is look at the proliferation of map information within Realty web sites to see this phenomena.

Second we can see that the second tier of mashups are using APIs for Photos, Shopping, Video and Search. These are all consumer related APIs, not enterprise related. Part of this is related to the nature of mashups and the source of our data. We are not likely to see corporate activity and usage patterns within this data set. However it is interesting to note that the sum of usage for Storage, Hosting, Identity, Office and Database is less than 1/3 of the total usage for Video and only 1/20th of Mapping.

Click to Enlarge
The next chart shows us the number of mashups added during the period by Category. Again this shows us that Mapping is by far the leader. Widgets and Search also added 3 new mashups.

Summary
So what does this tell us? First off we have to realize that the data set is limited, and comes from a site very focused on mashups and the usage of APIs by those mashups. Even within that context it is obvious that Mapping is the big winner in the early use of Cloud Computing. This does make sense. There are a tremendous number of web-sites that can immediately benefit from embedding location sensitive maps directly onto their site. With the publication of easy to use map tools from companies like Google and Microsoft it is inevitable that sites would start to take advantage of them.

This trend should continue, and even accelerate. How long until every corporate web-site has an embedded Google map on their Corporate Location Page? Who is going to write their own video or photo management application when they can just embed that service onto their web site from a site like Flickr or YouTube.

The transition is now in full swing. Base services for mapping, photo management, video, advertising and other web-based services are becoming commodity applications delivered from a core set of providers. It will be left up to the rest of us to figure out how to use these services in unique and interesting ways.

Classifying the Computing Cloud

2007-07-15T08:47:00.000-06:00

Introduction

More and more we see references to the Computing Cloud appear in articles and blogs across the Internet. Just the other day Scientific American wrote and article highlighting the shift away from traditional data centers to the Computing Cloud. You can find that article here.

This article is interesting because it talks about the Black-Box data center strategy being aggressively pursued by Sun Microsystems. In a nutshell these Data centers give organizations the flexibility to place a fully functional Data Center wherever they need it. This flexibility allows companies to realize cost savings by locating their computing power either closer to where it's needed, or in locations with cheaper power costs.

These Black-Box data centers are tremendously powerful and cost effective, but are they part of the Computing Cloud? This begs the question, "What is the Computing Cloud"? How do OnDemand applications, utilities, data feeds and Black Box data centers all fit under the same definition? Is the term Cloud Computing in danger of becoming overloaded like Enterprise Content Management (ECM). A term so broad as to be unhelpful in helping classify and understand an applications function?

This confusion has led us to attempt to start defining and classifying the broad parameters of the Computing Cloud. This is a work in progress and an exercise in understanding what is, and what isn't in the Computing Cloud.

What is a Cloud Computing Application?

As you look across the spectrum of Cloud, Utility and Grid computing a clear separation in functionality becomes evident. What's more, companies utilize the Cloud for very different purposes.

Some organizations are looking to companies like Google, SalesForce.com and eBay for user level applications; Email, Blogging, Word Processing, Customer Relationship Management (CRM) and the like.

Other companies see value in leveraging infrastructure level components. Offloading storage and computing power into centralized service centers enable them to benefit from the inherent economies of scale in the Computing Cloud. At the same time they can take advantage of best of breed data centers, network management and operational capabilities.

Finally companies look to the Cloud for discreet transactional information and capabilities. Want to know what the temperature is in San Francisco? Just look it up on a Web Service call at XMethods. Trying to calculate the risk associated with the Yen carry trade? Look up the current Yen to Dollar conversion rate at XIgnite.

While these Cloud Computing applications offer very different capabilities, and solve different business solutions, they do share common elements.

Computing Cloud applications are shared between organizations and reside on a common platform.
Computing Cloud applications are accessed remotely across an Internet connection.
Computing Cloud applications are priced using different revenue models than Enterprise and Traditional Software.

There are many other differences between Enterprise/Traditional applications and the Computing Cloud. However the three factors above seem to be common among all the Cloud Computing applications we looked at.

Types of Computing Cloud Applications

Different organizations use the Cloud for different reasons. By compartmentalizing the Cloud we start to understand how and why organizations use it. The natural divisions seem to be; Applications, Infrastructure and Transactions.

Applications encompass all of the services delivered directly to an end user. These are typically web-driven programs that help users with day-to-day business functions. For instance Google Desktop Apps, SalesForce.com, Microsoft Live and Siebel OnDemand CRM are all instances of Cloud computing applications.

Cloud Infrastructure components are services that provide capabilities you would typically associate with physical hardware or application development, specifically storage and computational power. Amazon is a classic example of making infrastructure capabilities available in the Cloud. Their Simple Storage Service, Elastic Compute Cloud and Simple Queue Services are all instances of Infrastructure capabilities. Google's own Data API is also a Cloud Infrastructure component.

SalesForce Apex and Adobe's Apollo application development platforms are another example of Cloud Infrastructure components. Specifically these platforms give developers storage, processing and development capabilities that deploy onto a remote Cloud infrastructure. Developers can create, test and deploy entire applications that run completely within the Cloud Infrastructure which in turn gives companies tremendous flexibility to create value added applications, while significantly lowering the risks and costs associated with large scale Web based deployments.

The rest of the Cloud falls under the Transactional classification. Transactional elements of the Computing Cloud help you perform discreet actions that either retrieve, manipulate or transform data and information. Cloud Transactional capabilities range from the thousands Web Services available from organizations like XMethods and XIgnite to Amazon's Alexa services, encompassing everything from Thumbnail creation to the Webs top sites.

This leaves us with what is not part of the Computing Cloud. I would propose that while Black Box service centers are an attempt to help with some of the same problems that the Computing Cloud solves, it is not by definition part of the Computing Cloud. An organization might use a Black Box service center to deliver a Cloud Computing component but the Black Box itself is not inherently a part of the Cloud. It is just an extension of an existing network.

Additionally not all Web Services are Cloud Computing. At it's core a Web Service is just a way of communicating between two applications. It might be a key mechanism of delivering Cloud Computing capabilities, but is not inherently part of the cloud itself.

Summary

There are real fundamental issues that IT organizations are struggling to solve today. The explosion of information, connectivity and user expectations are rapidly increasing the demands put on MIS departments. Add to this the drive for cost containment present in every modern company and you have a real pain point.

Cloud Computing is beginning to offer viable solutions to these problems. By using Cloud Computing solutions companies can stop spending time on commodity Application, Infrastructure and Transactional capabilities and focus on adding real value and differentiation through their IT departments.

IT departments will use Cloud Computing for three reasons - Cost reduction of commodity application deployments, management of peaks in infrastructure demands and delivering to business segments that demand linear or exponential growth in computing power, storage and delivery.

Through the next two to three years we will see companies begin to experiment with Cloud Computing in test or pilot applications. After that companies will start to adopt Cloud Computing wholeheartedly. However, companies will not abandon their data-centers. Instead Cloud Computing will become an integral part of delivering a companies value, sitting right alongside and integrated directly into their existing network and data center.

The Big Switch

2007-07-08T21:32:00.000-06:00

While doing research today on other blog's and sites talking about the Computing Cloud/Utility Computing I ran across a link to the book "The Big Switch" by Nicholas G. Carr. The topic, covered here, seems to be right on.

Mr. Carr seems to be covering exactly the trend we here at eCloudM are exploring.

I also ran across a great Blog written by James Urquhart covering the topic of Service Level Automation.

Service Level Automation in the Datacenter: Agile Computing Catches Up to the Data Center

There are some interesting correlations between Service Level Automation, Utility Computing and the Computing Cloud.

I wonder if using the Term Service Level Automation (SLA) causes confusion when presenting the ideas and topics into the business community. I have most often seen SLA refer to Service Level Agreements. While similar in concept, they are very different in implementation.

eCloudM the beginning

2007-07-03T21:10:00.000-06:00

In mid-2006 I was starting to get that entrepreneurial feeling again. One year earlier, in August of 2005, we had completed the sale of the company I helped to found. All the way through the summer of 2006 there was tremendous focus on integrating our product lines. However that effort was coming to an end and I was starting to wonder about what was next.

About that time Mike Hill and I were re-introduced by a mutual friend, our lawyer David Steigerwald. Mike Hill had recently left the COO position at XAware, an XML Integration company he helped start. During some initial meetings Mike and I realized that we both had a passion for technology, entrepreneurship and good Irish beer.

We both knew that we wanted to start another company sometime in the future. Mike had done two successful startups and I had done one and been involved in another. That said we also knew that we did not want to do another startup similar to our previous companies. We started the process of figuring out where to look by creating a list of what we didn't want to do.

We had no interested in trying to sell complex and expensive software to enterprises.
Trying to create another Open Source version of a successful software product and charging some combination of service and support fees did not seem like our bag of tea.
If possible we wanted to avoid the typical software company path of Idea --> Seed Capital --> Angel Investors --> Venture Round 1 --> Venture Round 2 --> Debt Financing --> Merger --> IPO/Out of business/Sell out.

We also had a few ideas that we did want to do.

Explore the feeling that something, we were not sure exactly what, but something was happening out there on the Internet that seemed ... different.
Get a better feel for how low the barriers to entry for software products was becoming due to technologies like AJAX, GWT, Web Services, OnDemand software, and better development paradigms.
Work with new media technologies like Blogs, Online Advertising and Community Networks to gain a better understanding of what it takes to build value in today's Internet.
Figure out if it was feasible to create a relatively virtual organization using the mushrooming set of online communication applications like Skype, Google Talk, GMail and Google Desktop Apps.

It ended up that the exploration and discussion around exactly these topics led us to that "something different" we thought was happening on the Internet. Our discussions generated a few conclusions.

The barriers to entry in the Enterprise Software space were becoming gigantic. The up-front capital needed to start a company and compete against established vendors was moving upwards of the $50M mark.
The ability to create good Internet software was becoming incredibly easy
Much of the software market was becoming commoditized. The availability of cheap debt was financing a huge M&A spree, consolidating the Enterprise Software market down to a few Tier 1 players, and a slightly larger set of Tier 2 organizations.
Companies like Google, eBay, Amazon and Yahoo were bringing an incredible array of platform capabilities into the On-Demand/Software as a Service (SaaS) space at very low price points (typically free).

All of this discussion and talk made us realize that the "something big" we were sensing was nothing other than the shift away from Enterprise Software products toward the adoption of On-Demand applications and community focused software. The term we found to describe this new computing platform was the Internet Cloud.

We had found what we were looking for, that shift in the status quo that destroys existing business plans and creates new opportunities. The next question was obviously "what do we do about it".