Buyers guide to cloud computing

Of all the types of cloud service, the cloud application market is the most mature., for instance, has more than 54,000 subscribers, making it the most successful cloud application provider with its pay per use customer relationship management (CRM) application.

Of all the types of cloud service, the cloud application market is the most mature., for instance, has more than 54,000 subscribers, making it the most successful cloud application provider with its pay per use customer relationship management (CRM) application.

But not every business wants to replace a core application with one operated in the cloud. CRM is relatively easy to migrate to a cloud offering, but enterprise resource planning (ERP) and production systems are not as easy.

Businesses have two choices: either use IT infrastructure in the cloud or build applications based on a cloud platform. Amazon EC2 is an example of the former approach. It simply provides a way for users to rent virtual servers, provision them remotely, and install applications, middleware and databases onto these servers.

Users do not have to buy their own hardware and can scale their processing requirements up and down easily. In effect, Amazon EC2, is a bit like a flexible hosting provider. Users do not buy physical rack space in a hosted datacentre, instead buying virtual servers and storage pools as and when they need them. But IT departments buying cloud infrastructure still need to manage servers.

Cloud platform

"Platform as a service allows people to write applications without having to worry about servers or storage, and IT infrastructure," says Frank Gillett, principal analyst at Forrester Research. "I just write my application to the platform and the service platform provider takes care of the hardware and virtualisation bit that go under the covers."

In effect, cloud platform tackles the management issues of cloud infrastructure by effectively providing an application server and operating system environment for the cloud. Gillett says examples include Azure from Microsoft, Google Application Engine and Salesforce's platform. For CIOs, Gillett warns, "Platform as a service is quite new and immature, with the possible exception of's platform, which was created a few years ago, although it is much more narrower platform than the more general platforms." recently tied up with VMware to offer a virtual Java cloud. With VMforce, users do not need to manage and they do not require a software stack to install, patch, tune, or upgrade. claims users simply drag and drop Java apps to VMforce to deploy.

Gillett says that while the platform allows users to run Java applications on the platform, businesses will need to assess how well VMforce lets people build applications that run independently of the app.

Hosting companies are adapting their existing hosted business to deliver the benefits of virtualisation and multi-tenancy offered by the cloud computing model. The lower cost of running a cloud-based infrastructure can be passed on to their customers.

Benefits and challenges

Cloud computing offers businesses a perfect opportunity to offload expensive IT resources into the cloud. The Open Group's Business Return on Investment from Cloud Computing whitepaper describes it as the move from IT- to business-centric services across a wider services continuum, with utility services for infrastructure at one end, and with business-centric software and business processes delivered as a service from the cloud at the other.

The main author of the paper, Mark Skilton, director, Capgemini and member of the Cloud Business Artefacts Project at the Open Group, says, "Cloud computing can lead to a quick way of getting into trouble. People need to discuss the business value and identify which areas of infrastructure can be virtualised in the cloud."

In the paper he warns that while utility-based pricing is attractive, it has inherent risks. This type of billing can be construed to help with cash flow, but arguably, the subscriber will only benefit from usage-based billing if bill amounts are predictable and controllable. If not, then neither the subscriber or the provider can budget effectively and, consequently, the subscriber pays a premium for bursting capacity, and/or the provider (and thus the subscriber) oversubscribes to resources and runs the risk of a capacity shortage ("brown-out"), according to Skilton.

If it does take off, businesses will have literally thousands of service providers to choose from, making the selection process difficult, and quite risky.

Cloud code of practice

Andy Burton is the chairman of the Cloud Industry Forum (CIF), which developed from the Federation against Software Theft to address the growing concerns of businesses that wish to buy online services. He says, "Businesses cannot be sure when they go to a website to buy an online service who is behind the site."

As such, businesses could be exposed to unknown financial, security or resilience risks of a third party. CIF's goal is to address these issues by educating the sector and developing a credible resource that can be validated and demonstrated by service providers.

CIF is developing a code of practice, which will offer a self-certification process for service providers, allowing buyers to compare different services providers based on a common set of criteria, covering transparency, capabilities and accountability. Burton expects thousands of service providers to sign up. While CIF will not check every submission, there will be a quality control process, where about 10% of service provides will be checked by the forum's team.

Hosting companies are beginning to migrate traditional hosting services to a more cloud-like service. Traditional outsourcers are also beginning to offer cloud-based services. At the same time, system integrators such as Accenture and Deloitte have created practices and are building around the ecosystem. Similarly, Microsoft's partner network is beginning to exploit its Azure platform to build Windows apps that are hosted in the cloud.

IT directors and CIOs will need to take into account the different styles of cloud offering as they plan future outsourcing, hosting and application strategies. The cloud will impact next generation IT.

App developer floats on a cloud
Jeremy Roche is CEO of, an enterprise accounting application developed natively on the platform. It is derived from the CodatoGo software, which Coda originally built on top of Although it only started in September 2009, now has customers in 14 countries, and is used in companies with between seven and 70,000 users.

Roche says, " provides us with a new way of building applications. The product uses infrastructure, which gives us access to the hardware, networking security infrastructure, up through the data layer, to services we can consume on our own platform. It is an entire ecosystem."

He says is an applications company. The company understands how to build financial software. But moving this into the cloud is not a trivial matter.

"We are an applications company not a technology stack company. How do we build the platform, the infrastructure, control the multi-tenancy and security? This was the highest risk we faced in building the product for the cloud. We knew how we wanted to build the financial application in the cloud."

Without, he says the company would have needed to build the cloud platform speculatively. "We don't worry about infrastructure, or scalability because our application runs on the same infrastructure as"

Platform dependence

This may seem that is tied to, but Roche believes even traditional software development is effectively tied down to a single platform. "If you build your own infrastructure on a Java and Oracle stack you won't change that infrastructure.

"Force gives us the toolkit uses to build it own application. We consume Salesforce services like Workflow," says Roche. "You code on the platform in the Apex language, a Java-like proprietary language."

So the company has been built on and it is now opening up its own services to other developers. "We publish services, just like services, that run natively on the platform." These services can then be consumed by other developers.

One could argue the approach Roche has taken with is analogous to the idea of a service-oriented architecture (SOA), without all the standards and complex implementation required for a SOA strategy. "It is a practical example of SOA. We code our own applications in an SOA-like model."

He believes this SOA-like approach to software development will lead to a new breed of enterprise software that caters for businesses that want to buy cloud-based software applications that require zero implementation time. "There is a growing, complementary partner system. We have team of developers who share best practices. Moreover, through the partner network on, developers are taking the APIs in to build complementing applications."

This is changing the way enterprise systems are put together, according to Roche. He says, "There is a new sort of ERP. People are looking at fast deployment of products and point solution that work together."

Software companies building this component-style ERP on include LessSoftware, Ascent, Gloviar. Roche says these offer different styles of ERP that integrate with FinancialForce.

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