Cloud computing concerns remain, despite growing acceptance

Jim Schakenbach | Mass High Tech | August 28, 2009

The concept of “cloud computing” has been around perhaps longer than most of us realize. It popped up almost a decade ago as grid computing, software-as-a-service (SaaS) and virtualization began to take hold. Software companies and service providers started developing “pay as you go” products and services that helped reduce computing technology capital expenditures for companies that had the need but not the cash for heavy-duty IT infrastructures.

IT cloud services are entering a period of accelerated adoption, according to a recent user survey by Framingham-based research firm IDC. Cloud computing is ready to cross over from being an early-adopters market to one of mainstream acceptance and use over the next three years.

The term “cloud computing” — as just about everyone who uses a keyboard now knows — originated with the use of a cloud symbol in network illustrations to depict a nebulous, off-premise network environment. While the definition of what really constitutes the cloud remains vague, it is generally understood to include three main on-demand service areas: software, infrastructure and platform. Major service providers such as Amazon.com Inc. and Google Inc. have played key developmental roles in the growth of cloud architectures, having beefed up their data center capabilities and capacity as a result of the technology downturn and infamous dot-com bubble burst back in 2000.

“Amazon has helped define the market,” said Will Kohler, a partner in Needham-based investment firm Prism Ventureworks. “They can offer data storage services at very high scalability levels, which is critical for cloud computing, and that’s a very hard thing to architect.”

Sonian Inc. of Needham is one of Prism’s portfolio companies and, according to Kohler, a good example of one of the few New England companies filling the needs that exist for optimizing the cloud. “We look for companies that are looking to leverage existing cloud infrastructure,” commented Kohler. For Sonian, that means using Amazon’s enormous data center capacity to power its email-archiving software, which it’s offering as a SaaS application.

Sonian founder and CTO Greg Arnette agreed that Amazon’s infrastructure and massive data storage capacity plays a key factor in the services that his company has been able to develop. “If Amazon hadn’t provided access to infrastructure as a service, we’d be doing something else. But because we’re providing a software and innovation layer on top of their hardware infrastructure, we can offer a reliable data management system in a hosted service environment.”

While there has been hype surrounding cloud computing, how quickly it will see widespread adoption and what actual benefits will be realized, there are several things that are clear: Cloud computing is generally fast and easy to use, it can reduce in-house capital expense and staffing, and both the services and costs are scalable. However, there are downsides too. Performance and availability can be problematic, it often can be difficult to integrate with in-house IT infrastructures, and security remains a big issue. There are social and legal concerns as well, according to Michael Stiefel, principal of Reliable Software Inc. and a consultant on software architecture and the alignment of information technology with business goals.

“It all boils down to two main areas of concern, trust and the concept of ‘utility computing’ — of paying for computing service as you would for electrical or telephone service,” said Stiefel. He said Microsoft Corp., Google, and Amazon have changed the way people view and use data storage.

“Whether people know it or not, everyone has data in the cloud, and that can make people nervous,” said Stiefel. “Big companies now store important data for people who do not have relationships with those companies. Do you trust them with your data, which could be stored virtually anywhere in the world? It’s a big issue.”

Stiefel also pointed out a weakness in the cloud-computing space that is not getting as much attention as it deserves: “Utility computing requires an awful lot of social infrastructure — companies, equipment, services and relationships that are used to processing data in the cloud. Suppose a company handling your data and hosting your applications goes bankrupt and their equipment is seized? What happens to your applications and servers?”

Steiefel said that a lot more effort has to be put into updating laws to provide additional protection for people and companies that rely on cloud technology to provide them with data storage and mission-critical applications.

Still, said Stiefel, the benefits of cloud computing outweigh the drawbacks.

“If you need massive amounts of computing power temporarily, cloud computing is ideal,” said Stiefel. “For companies that want to operate on Internet scale — companies with lots of data users or a need for geographically wide data distribution — the economics of cloud computing are compelling, especially for small to medium-sized businesses. The cloud is almost a no-brainer.”

What the analysts are saying about the move to cloud computing

Comments drawn from recent research by IT research firms.

Survey results confirm strong interest in cloud infrastructure-as-a-service (IaaS) but debunk several stereotypes. Large firms are more interested in cloud IaaS than small firms. Firms are interested in cloud services slightly more than internal cloud — not, as conventional wisdom has it, much less than internal cloud. Firms are equally comfortable with all major workload types in the cloud and are almost as comfortable with production apps as they are with test and development usage. For all vendor strategists, this means focusing on enterprise and SMB both — not leading with SMB — while product vendor strategists also need to develop different messages for enabling internal cloud versus supporting use of external service providers.
Forrester Research Inc.’s Frank Gillett in his report “Conventional Wisdom Is Wrong About Cloud IaaS”.

As enterprises seek to consume their IT services in the most cost-effective way, interest is growing in drawing a broad range of services (for example, computational power, storage and business applications) from the “cloud,” rather than from on-premises equipment. The levels of hype around cloud computing in the IT industry are deafening, with every vendor expounding its cloud strategy and variations, such as private cloud computing and hybrid approaches, compounding the hype.
Gartner Inc. in its report on technologies on the “Hype Cycle,” which positioned cloud computing and e-book readers as the two technologies at the peak of inflated expectations during 2009.

Cloud computing is coming. IT is finally catching up with the rest of the Internet by extending the enterprise outside of the traditional data center walls. And although cloud computing is transforming traditional IT, it is still immature. Lack of clarity, risk management and questionable long-term return on investment are creating consumer trepidation and obstructing cloud acceptance. Like any technology, comprehension is vital to creating a competitive advantage. The best organizations will use cloud computing’s unique business model, elasticity and scalability to streamline IT operations, offload lesser-value IT processes and focus on driving core business value.
Burton Group analyst Drue Reeves in the report “Cloud Computing: Transforming IT.”

Numbers in the cloud

Definitely a silver lining
Research firm IDC views cloud computing as “an opportunity in its infancy, but, even conservatively, poised to drive big marginal growth.
Spending 2008 2012
Core IT areas $383.3B $493.7B
Cloud services $16.2B $42.3B
Cloud as percent of total 4% 9%

The breakdown: Storage grows
Where cloud service spending is occurring now, and how it will look in 2012
IT area 2008 2012
Business applications 57% 52%
Infrastructure software 18% 18%
App development/deployment 11% 9%
Server 9% 8%
Storage 5% 13%

25% — The percentage of growth the cloud services will account for between now and 2012 in business applications, application development, infrastructure software, storage and servers

Jim Schakenbach is a freelance writer in Jefferson.

What cloud computing really means

Eric Knorr, Galen Gruman | InfoWorld | April 7, 2008

Cloud computing is all the rage. “It’s become the phrase du jour,” says Gartner senior analyst Ben Pring, echoing many of his peers. The problem is that (as with Web 2.0) everyone seems to have a different definition.

As a metaphor for the Internet, “the cloud” is a familiar cliché, but when combined with “computing,” the meaning gets bigger and fuzzier. Some analysts and vendors define cloud computing narrowly as an updated version of utility computing: basically virtual servers [1] available over the Internet. Others go very broad, arguing anything you consume outside the firewall is “in the cloud,” including conventional outsourcing.

[ Learn how early adopters of cloud computing [2] have used the technology and the lessons they have learned. | See how Amazon, Google, and other cloud platforms stack up [3] in the InfoWorld Test Center’s comparison. ]

Cloud computing comes into focus only when you think about what IT always needs: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT’s existing capabilities.

Cloud computing is at an early stage, with a motley crew of providers large and small delivering a slew of cloud-based services, from full-blown applications to storage services to spam filtering. Yes, utility-style infrastructure providers are part of the mix, but so are SaaS (software as a service) [4] providers such as Salesforce.com. Today, for the most part, IT must plug into cloud-based services individually, but cloud computing aggregators and integrators are already emerging.

InfoWorld talked to dozens of vendors, analysts, and IT customers to tease out the various components of cloud computing. Based on those discussions, here’s a rough breakdown of what cloud computing is all about:

1. SaaS
This type of cloud computing delivers a single application through the browser to thousands of customers using a multitenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting. Salesforce.com is by far the best-known example among enterprise applications, but SaaS is also common for HR apps and has even worked its way up the food chain to ERP, with players such as Workday. And who could have predicted the sudden rise of SaaS “desktop” applications [5], such as Google Apps and Zoho Office?

2. Utility computing
The idea is not new, but this form of cloud computing is getting new life from Amazon.com, Sun, IBM, and others who now offer storage and virtual servers that IT can access on demand. Early enterprise adopters mainly use utility computing for supplemental, non-mission-critical needs, but one day, they may replace parts of the datacenter. Other providers offer solutions that help IT create virtual datacenters from commodity servers, such as 3Tera’s AppLogic and Cohesive Flexible Technologies’ Elastic Server on Demand. Liquid Computing’s LiquidQ offers similar capabilities, enabling IT to stitch together memory, I/O, storage, and computational capacity as a virtualized resource pool available over the network.

3. Web services in the cloud
Closely related to SaaS, Web service providers offer APIs that enable developers to exploit functionality over the Internet, rather than delivering full-blown applications. They range from providers offering discrete business services — such as Strike Iron and Xignite — to the full range of APIs offered by Google Maps, ADP payroll processing, the U.S. Postal Service, Bloomberg, and even conventional credit card processing services.

4. Platform as a service
Another SaaS variation, this form of cloud computing delivers development environments as a service. You build your own applications that run on the provider’s infrastructure and are delivered to your users via the Internet from the provider’s servers. Like Legos, these services are constrained by the vendor’s design and capabilities, so you don’t get complete freedom, but you do get predictability and pre-integration. Prime examples include Salesforce.com’s Force.com [6], Coghead [7] and the new Google App Engine [8]. For extremely lightweight development, cloud-based mashup platforms [9] abound, such as Yahoo Pipes [10] or Dapper.net.

[ Get the complete view of the cloud in our special report [11]. ]

5. MSP (managed service providers)
One of the oldest forms of cloud computing, a managed service is basically an application exposed to IT rather than to end-users, such as a virus scanning service for e-mail or an application monitoring service (which Mercury, among others, provides). Managed security services delivered by SecureWorks, IBM, and Verizon fall into this category, as do such cloud-based anti-spam services as Postini, recently acquired by Google. Other offerings include desktop management services, such as those offered by CenterBeam or Everdream.

6. Service commerce platforms
A hybrid of SaaS and MSP, this cloud computing service offers a service hub that users interact with. They’re most common in trading environments, such as expense management systems that allow users to order travel or secretarial services from a common platform that then coordinates the service delivery and pricing within the specifications set by the user. Think of it as an automated service bureau. Well-known examples include Rearden Commerce and Ariba.

7. Internet integration
The integration of cloud-based services is in its early days. OpSource, which mainly concerns itself with serving SaaS providers, recently introduced the OpSource Services Bus, which employs in-the-cloud integration technology from a little startup called Boomi. SaaS provider Workday recently acquired another player in this space, CapeClear, an ESB (enterprise service bus) provider that was edging toward b-to-b integration. Way ahead of its time, Grand Central — which wanted to be a universal “bus in the cloud” to connect SaaS providers and provide integrated solutions to customers — flamed out in 2005.

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. It’s a long-running trend with a far-out horizon. But among big metatrends, cloud computing is the hardest one to argue with in the long

Amazon Web Services integrates with datacenter using private clouds

Mikael Ricknäs | InfoWorld | August 26, 2009

Amazon Web Services has announced a limited beta version of its Virtual Private Cloud (VPC) service, which aims to connect a company’s existing computing resources and Amazon’s cloud as if they were part of one data center, Amazon said on Wednesday.

Companies can use a VPC to move corporate applications, including e-mail, financial systems and CRM applications, into the Amazon cloud without having to lose control, and users continue to access the application as if nothing has changed. The IT department can also use Amazon EC2 (Elastic Compute Cloud) instances within the VPC to add additional servers for disaster recovery or more web servers during a traffic spike, according to Amazon.

[ Follow the cloud with InfoWorld's Cloud Computing blog [1] and Cloud Computing Report newsletter [2]. ]

The new service connects internal resources and Amazon’s cloud using a VPN (Virtual Private Network) connection based on IPsec (Internet Protocol security). Today companies can run Amazon EC2 instances running Linux, Unix or Windows, Elastic Block Store for storage, and CloudWatch to monitor utilization within a VPC. Over the coming months Amazon will add support for additional services, it said.

Administrators can create subnets to organize resources within the VPC and decide who can access them. Unlike traditional Amazon EC2 instances, which have Amazon-assigned internal and external IP addresses, those within VPCs only use internal IP addresses, chosen by the customer, and are accessed through the VPN.

On top of standard EC2 compute and data transfer charges, companies using VPC pay US$0.05/hour for the VPN connection.

Cisco Integrated Services Routers and Juniper J-series routers have been verified to work with VPC.

The beta is limited to one VPC per account and 20 subnets per VPC.

Amazon is also adding more secure authentication to its web services. AWS Multi-Factor Authentication lets users add two-factor authentication when accessing account settings. Two-factor authentication means that users must produce something they know and something they have to authenticate their identity, in this case a password and a code from a one-time-password generator.

AWS Multi-Factor Authentication will be available in the coming weeks, according to Amazon.

Links:
[1] http://www.infoworld.com/blogs/whurley?source=fssr
[2] http://www.infoworld.com/newsletters/subscribe?showlist=infoworld_cloud_computing&source=fssr