With its promise to cut costs and ease of scalability, the attractions of cloud computing for IT managers are straightforward, but the silver lining still eludes some enterprises reluctant to release sensitive data.
- Benefits of the cloud
- Communications revolution
- Cloud case studies
- Cloud inside the firewall
- Secure sensitive data
- Trusted partners
- Applications on cloud platforms
- Consumer versus enterprise
On the face of it, cloud computing has a compelling case, at least for the firm's accountants. This is because it takes a lot of expensive assets - whose true profit contribution is hard to measure - off the balance sheet and converts them to current expenses. That's handy in these capital-conscious times.
Cloud computing also appeals to line managers because it promises to let them dial up the computing resources they need on a pay-as-you-go basis. This allows them to budget and operate according to actual need, making their budgets more efficient and more flexible.
The other main benefit is scalability. One aspect is access to supplementary computing resources over and above what is available in-house. The other is access to an almost infinitely graduated number-crunching capacity somewhere in cyberspace.
So what can one get from the cloud? And does the computing cloud mirror actual clouds in any way?
In some ways cloud computing harks back to the early days of time-sharing. The primary offerings now, as then, are rented access to processing cycles, storage, networking and applications. Only this time, the scope is global, always on, and open, rather than local, batch and proprietary.
What makes cloud computing possible is the revolution in communications technology over the past 20 years. This has shifted from expensive analogue telephony to cheap digital internet-based networking. Links are no longer point-to-point but, thanks to mobile cellular and satellite networking, ubiquitous and increasing fast.
This trend is unlikely to change. Information technology suppliers are racing to catch the networking wave. They aim to erase the user's awareness of the location of the processed data by making access and presentation of information fast and transparent.
Already 55,400 firms use Salesforce.com to manage customer relations and logistics for 1.5 million customers. Just over 400 million people use Skype to make international phone calls and share files. Google and Microsoft are locked in battle for first rights to the users' desktop, with standard office and other applications, while online bookseller Amazon wants to store their records with archival processing and storage such as Elastic Cloud Computing (EC2).
The price war this has engendered makes cloud computing attractive. EC2 offers on-demand computer cycles for 11 cents per hour for Unix/Linux and Windows users pay 13.5 cents per hour. But big mature IT users have been justly wary of cheap cloud offers. If one's internal systems are running sweetly, why fix them?
For cloud computing does introduce complexity at almost every IT level, at least to start. Dave Powers, information analyst for Eli Lilly, the pharmaceuticals maker, has been experimenting with supercomputing in the cloud with several suppliers. A big win for him would be a single unified user identity and authentication system for accessing external and internal IT resources. He has tried OpenID, liked it, but did not pursue it because the internal IT department was reluctant to give up its present, internally managed IDMS.
The cloud can deliver simplicity, but it takes commitment. Google succeeded in persuading the publishers of the Daily Telegraph and the Guardian to switch to Google Apps for office workers and journalists.
Guardian News & Media CIO Andy Beale said the new package, which included Google Docs, Google Calendar, Google Sites, Google Video and Google Mail, would pay for itself quite quickly, when he announced the deal in February. "Being able to offload commodity services to someone else at a cost-effective price makes a lot of sense. We will save money, and we are getting a lot more useful product for significantly less money," he said.
But there were special circumstances at GNM. Firstly, it is owned by a not-for-profit trust. This may give it greater latitude to experiment than a firm with a more conventional ownership structure.
Secondly, the newspaper, like all publishers, is under severe pressure to cut costs. It is hard to say how much it will save switching from licensed Microsoft Office products and Lotus Notes to Google Apps, but it would not be insignificant to the financial director.
Thirdly, the Guardian has trumpeted the benefits of the "interWebcloud" for a decade or more. This was a chance to show that it practices what it preaches, but also to gain real world experience at a time when people's increasing access to fast broadband communications is changing the publishing business model.
Fourthly, as Beale noted, it means they rely less on virtual private network links to exchange information.
Until very recently, most cloud applications ran outside the organisation's firewall. But in April VMware introduced vSphere 4, what it calls its operating system for the cloud.
vSphere 4 allows CIOs to aggregate and manage their internal processors, storage and networks as a seamless, flexible and dynamic cloud operating environment. VMware claims any application will run more efficiently and with guaranteed service levels on the system. It plans to allow what it refers to as a "dynamic federation" between internal and external clouds, enabling private cloud environments that span multiple datacentres and/or cloud providers.
Cisco argues the network allows CIOs to put everything into the cloud, and drop the distinction between internal and external resources.
Eli Lilly's Powers reckons that's true, but a step too far at this stage. His company is not likely to put control of its factory network and information systems into the cloud any time soon. Apart from regulations, there are quality, responsibility and liability issues that conserve the status quo, he says.
Secure sensitive data
He anticipates a three-tier structure emerging. The first is a small but highly secure internal IT shop where the company processes and stores secret information, information that gives it competitive advantage, or for which it is legally liable, and where it cannot lay off the liability to third parties.
But the internal picture may lend itself to a degree of private cloudiness, if users firms adopt Vmware's view of that of data warehousing and business intelligence supplier Teradata. Teradata CTO Stephen Brobst says processing is no longer a bottleneck, thanks to virtualisation and tunability of server racks. But storage and input and output (I/O) are. Brobst reckons two emerging technologies will address these issues within a year. He expects Intel to move the I/O processor on-board the microprocessor by mid-2010. This will allow the chip's random access memory to access data at the same rate as it processes it, wasting no cycles while it waits for data to arrive. This will also make feasible solid-state storage, which will act as a mass RAM store.
But the key will be Teradata's new storage management system, he says. This will allow database administrators to mix and match storage units of different capacities and types, and for the software to work out where to store the most frequently used data, saving database administrators a tedious but key manual task.
Brobst is quick to say Teradata's pitch is not for real time online transaction processing environments. Rather it takes data from OLTP systems, warehouses them, and crunches it to provide business intelligence for decision-making. Data volumes were doubling every year but decision response times were shrinking, he said. It was increasingly critical to a firm's competitive edge to run the business intelligence operation as close to the data generation and decision-making points, and that means inside the private cloud, he said.
The second tier comprises trusted, long-term partners, says Powers. Closer to the old time-sharing deals, these relationships will be contractual and will include service level agreements. They might possibly also include risk and profit-sharing targets and incentives. Information processed here will likely be response time-dependent (hence the need for SLAs) and will probably deal in confidential or sensitive information.
There are already many examples of this. Many corporate websites are outsourced to trusted third parties and many run transactions on them that feed the corporate enterprise systems. Similarly, few companies wash their own e-mail these days. They rely on firms like MessageLabs to filter the net's spam and malware load before they hit the corporate firewall.
The third level will deal in general purpose applications and non-confidential information, including external data.
This is where Microsoft, with its forthcoming Azure product set, and Google with its Apps, will fight it out. In the same way that Salesforce.com, Apple, Google and Symbian have provided tools and standards that other software developers can use to build applications that run on their platforms, so Azure provides standard web protocols and tools like XML, .Net, Soap and Rest. Microsoft promises that developers who use these tools will end up with cloud-ready applications.
That is fine, up to a point. The problem is that providing platforms is good for the consumer market, especially when it involves mobility. There are at least five mobile operating systems fighting for market share. Who wins depends, as it did in the early days of the PC, on which platform has the most popular applications. But this is far from the enterprise market, which is far more mature, and hence homogenous, conservative and geared for efficiency rather than novelty.
So far the efforts of leading enterprise software firms such as SAP, Oracle, Siebel and the rest to become cloud-compliant have been hesitant at best.
Read more about cloud computing:
Image: Henryk T. Kaiser/Rex Features
This was first published in July 2009