…a new era of IT opportunity and challenges
It doesn’t take long to get a good feel for the potential of cloud computing and how it can offer ready access to entirely new business capabilities, less expensive IT resources, and unrivaled flexibility for businesses of every size. Since becoming a hot topic early last year as major vendors, including top firms such as Amazon, Google, and Microsoft, jumped on the bandwagon with a wide-range of offerings, cloud computing has consistently stayed on the industry’s radar.
With leading companies still joining the movement — including IBM, HP, and Salesforce — cloud computing has moved from a cottage industry to one of the bigger growth areas in the computing business, just as the industry as a whole begins to take serious lumps from the recession.
The onus is now on businesses to take advantage of cloud computing to cut costs and become more agile. In the process, they will have some hard choices to make — and some intriguing ones as well — if they want to access the many advantages that cloud computing platforms can provide.
There are also some non-trivial challenges involved in adopting cloud computing that must be watched closely as well. These includes a long list of issues such as the security and privacy of business data in remote 3rd party data centers, the dreaded concerns about platform lock-in, worries about reliability/performance, and even fears about making the wrong decision before the industry begins to mature.
However, in a business environment where change is almost mandatory in order to survive, cloud computing appears to offer significant economic benefits if the risks can be offset. Hence, one of the bigger challenges IT departments will face this year is whether they can take the plunge with cloud computing quickly enough to benefit their organizations as a whole.
ZDNet’s own Phil Wainewright has covered some of the more interesting issues swirling around cloud computing of late including the default lock-out that occurs in the event of the demise of a cloud computing provider as well as the brewing SLA battles between the major providers. This underscores how the cloud computing space is where the new platform wars are forming and it’s sizing up to be as big or bigger than earlier ones. The good news for now: In a wide-open new industry, there is no clear leader today and choice prevails.
This brings up the side discussion of what actually constitutes cloud computing, since everyone seems to be applying the label to anything that runs on the network. Is it Web hosting of your application code? Is it a software platform as an on-demand service? Do SaaS applications count as cloud computing? The answers to all these questions are a qualified yes; the answer hovers roughly around the outsourcing of computing of any kind (CPU, storage, apps, etc.) using a shared cost, commodity utility model. In general, you know if you’re involved with cloud computing of some kind if you’re receiving a bill for computing services being done for you somewhere else but which you can access directly.
I used the term commodity utility model since cloud computing providers aren’t monopolies today (unlike a lot of the other utility services we use in business) and currently compete actively with each other on features and pricing. This means that CPU cycles, bandwidth, and application logins in the cloud will be extremely cheap and extensively commoditized for the foreseeable future. This constant competition creates continuous pressure to drive down the costs and increase the capabilities of cloud computing platforms in a way that just doesn’t happen naturally within IT organizations today. In other words, just like most businesses don’t generate their own power or create their own financial institutions to keep their money in, increasingly they won’t keep their computing in largely parochial, private capabilities that can’t leverage the economies of scale, innovation, and efficiencies of dedicated providers.
Enterprise cloud computing: Some assembly required
As a new industry, there is a lot of choice in cloud computing today and will continue to be more until the inevitable shake-out occurs and the winners begin to emerge. That also means there is no dominant model for how cloud computing should be delivered and this is resulting in some interesting fragmentation in the market already. Some cloud computing offerings are so generic (Amazon’s Elastic Compute Cloud, aka EC2) that they are nothing more than sophisticated on-demand hosting services while others offer nearly everything you need to create software, as long as you use their programming model, frameworks, tools, and management systems (Google App Engine). Which model a business chooses will have deep ramifications for how they can take advantage of cloud computing and because of this, most organizations will likely have multiple providers.
Is it time to declare the death of the enterprise data center? No, not quite yet, but it’s coming.
Let’s also make no mistake, most IT executives currently think very few cloud computing solutions are properly enterprise ready today. Though a number of them have come a good bit of the way towards
