Cloud Computing – An Essential Subject For CIOs In 2010

Cloud Computing Highlights

• CIOs are understandably slow to address Private Cloud development
• Cloud Services – ‘… as a Service’ – to consumers and small businesses are growing strongly
• The definition of Cloud Computing differs depending on the audience
• The enthusiasm for Cloud Computing by large organisations differs by role
• Most CIOs will need to address Cloud Computing in 2010
• ITCandor offers a free Cloud Computing evaluation service for advice

I’ve been writing about Cloud Computing since I started this site. I wanted to give you an update on my evolving taxonomy in the hope that it will help clarify a very complex and potentially confusing subject.

Cloud Computing – A Developing, If Problematic, Definition

There have been a number of early attempts to describe and define the subject. For instance:

• It ‘enables the delivery of personal and business services from remote, centralized servers (the “cloud”) that share computing resources and bandwidth – to any device, anywhere’ (IBM)
• It’s ‘the delivery of IT as a service to companies or end-users over the Internet’ (HP)
• ‘The delivery of a service over the Internet’ (Datascape Online)
• It’s ‘moving the Web forward as a platform for scalable applications’ (Google AppEngine)
• It’s ‘a web service that provides resizable compute capacity in the cloud. It is designed to make web-scale computing easier for developers’ (Amazon EC²)
• It’s ‘Software Plus Services’ (Microsoft)
• ‘When you use any app that runs in the cloud, you just log in, customize it, and start using it’ (Salesforce.com)

Since these early beginnings Cloud Computing has become on of the key marketing messages (akin to ‘NT in the Enterprise’ in the early 1990s). The definition is still problematic – it means many things to different audiences. However I’m convinced that it will increase in importance over coming quarters. In fact its very ‘slippy-ness’ as a term makes it attractive, as it can be sequestered for use in most ITC marketing strategies.

Cloud Computing Means Different Things To Consumer, Supplier And CIO Audiences

I believe the amount of work needed to address Cloud Computing differs dramatically by participant, which in turn affects both the need for and depth of definition. For instance:

• For Consumers and small businesses its use is often ‘business as usual’, since many applications are already provided via the Web involve little or no local processing. Users of Google, Web based email (Gmail, Yahoo, etc.) and social networking (Facebook, MySpace, Twitter, etc.) may be surprised that their applications can mostly be defined in the category.
• IT Software and Service Suppliers such as hosting companies, Independent Software Vendors (ISVs) and Service Providers tend to see Cloud Computing as a delivery mechanism requiring an internal adjustment of their data centre techniques. It typically involves the provision of a single (or highly restricted number) of applications to a wide group of end-users. For software suppliers it usually involves adjusting billing systems for pay-as-you go usage.
• For CIOs, data centre managers and enterprise systems suppliers (IBM, HP, Fujitsu, Sun and others) it’s typically the adjustment of the IT architecture to accommodate the delivery of self-service applications. Activities involve data centre consolidation, modernisation, simplification, virtualisation and the like. CIOs also need to address the mixing of private and public Cloud applications and the consequences for their Service Level Agreements (SLAs) with internal users.

Large User Enterprise Cloud Computing Participants

As with most issues of internal IT I expect the interest in Cloud Computing to develop according to the roles of employees in large organisations (see Figure 1). For instance:

• CIOs – Cloud Computing is a major headache for many of the managers supplying computer services to their end-users, not least because internal IT is very complex and the number of applications supported tends to be high. While CIOs in a select number of Web companies have the advantage of having to support only a small number of ‘services’, governments and major businesses either have to modernise their data centres first before considering providing Cloud applications, or have to deal with the difficulties of balancing the mix of internal ‘legacy’ and external Cloud services for their end-users. Hardly surprisingly therefore many conventional CIOs are relatively soft supporters of the subject.
• Financial Directors – Most organisations have made significant reductions in their Cap Ex budgets over the last 18 months. As Cloud services allow IT to be paid for on a pay-per-use basis many Financial Directors are in favour of it. However they are less keen or able to find budgets for data centre modernisation and the development of internal Clouds. While there is a strong rationale for IT consolidation as a cost saving activity it still needs up-front investment. In addition the Return On Investment (ROI) is reduced if the final result includes a major shift in the nature of the application support.
• Software Developers – there are definitely two different groups of developers. Those working for software companies or developing internal applications for major user organisations already know the advantages of new techniques and tend to embrace the idea of Cloud Computing as a delivery mechanism. However there are still hundreds of thousands (if not millions) of ‘legacy’ software developers who will need better tools if their output is to be included in ‘… as a Service’ offerings. Cloud development tools are available from companies such as Citrix, Symantec and Quest Software and there are also Open Source developments such Xen’s which can help.
• End-Users – these are probably the biggest supporters of the concept of Cloud Computing, even if many are still only vaguely aware of the term. Many organisations are active in attacking the use of company PCs for social networking applications either through restrictive policies (banning the use of Facebook at work, for instance) or automation (such as ‘Skype removal’ software). Ideally many would like to see their IT applications in terms of a self-service menu and be able to mix corporate applications with external ones approved and paid for by their departments and those allowed by organisational policy.

I’ve tried to capture some of the generic issues for each of these groups in Figure 2.

Cloud Computing Services – What Suppliers Are Providing

As the year has rolled on so ITC supplier offerings have become more standardised. I’ve tried to capture the major components in Figure 2. Here I think it’s useful to split developments into two sides. In particular:

• Private Cloud Offerings – those to support the conversion of data centre computing into a platform (often referred to as a Private Cloud) from which an organisation can provide its own services. Many of these can be classified as Implementation services such as modernisation, consolidation, implementation and virtualisation. However providing the extra support for converting applications for Cloud provision has to be tempered by the number and nature of the existing applications supported. Transaction processing in banks, for instance, is harder to accommodate for security reasons. It is unlikely that a large user organisation will be able to provide internal Cloud applications without a well designed and managed Enterprise Service Bus. For some the search for an appropriate data centre location (such as those offered by NGD) is necessary to side-step the difficulty of retro-fitting new designs into crowded facilities
• Public Cloud Service – There have been many introductions of Cloud services by a number of major and/or innovative IT and business service companies this year (read my articles about Datascape Online or FNZ for instance). These offerings tend to be named ‘… as a Service’ and have the advantage of being priced on a pay-as-you go basis, thereby being Op Ex rather than Cap Ex spending. Many of these services are being offered as extensions to existing free Internet services (such as email, data protection and recovery or anti-virus security software) for consumers and small businesses or as alternatives to ‘analogue’ process for small companies. It is taking longer for Cloud services to be offered to large and medium companies due to the complexities mentioned in the bullet above. However where it is, it can be seen as a whole new type of outsourcing. In addition to the technical issues of mixing Private and Public Cloud applications there are also the usual sticky topics of addressing corporate governance, data protection legislation and security. The difficulty and complexity of such issues grow exponentially with the size of company as always.

Many of the largest IT suppliers (IBM and HP in recent analyst briefings) have appeared to me softer than others on the issues of Cloud Computing, especially within those departments supplying design and implementation services. This is because the extra investment is difficult to propose at a time when the techniques are still immature and the economy is weak. On the other side the Hosting companies (usually Telecoms suppliers), ISVs and Service Suppliers have been much more active in 2009. I’m particularly encouraged to see a number of new service providers from the wholesale business process area entering the ITC market for the first time by proposing ‘… as a Service’ offerings.

The Future – How ITCandor Can Help CIOs Get Ready For Cloud Computing

There are many issues in confronting the introduction of Cloud Computing whichever type of participant you are. The main aim of my research is to provide practical support, either in addressing the subject for the first time or in making choices. To help you I’m offering a free evaluation service. By reviewing your existing data centre, application and service offerings I’ll be pleased to give you some initial guidance in to how to build a successful strategy.