Time to head for the cloud?

British Gas is planning to move its IT infrastructure to cloud computing, but is taking a pragmatic approach to ensure that its data will be in safe hands

Cloud computing has the potential to reshape IT provision over the coming decade. The concept of renting applications, development platforms, processing power, storage or any other web-enabled service marks a sea change in the approach to enterprise IT. It is an approach that places the internet at the heart of the organisation.

But despite blockbuster-levels of hype, there is still a marked degree of confusion over cloud computing, not least over what it actually entails. There are multiple ­ and sometimes contradictory ­ definitions used to describe cloud computing. These encompass everything from defining it as an updated version of utility computing to categorising the cloud as anything consumed outside the corporate firewall, which could even include conventional outsourcing arrangements.

IT advisory group Gartner defines cloud computing as a style of computing in which massively scalable IT-enabled capabilities are delivered as a service to multiple customers using internet technologies. And although the hype surrounding cloud computing is off the scale, it has the potential to provide businesses with a compelling alternative model of IT delivery, says Joe Skorupa, research vice president at Gartner.

“The promise of cloud computing is ubiquitous access to a broad set of applications and services, which are delivered over the internet and related networks to multiple customers,” he says. “Cloud exists when someone takes responsibility for the delivery of a service or a resource over the internet. And the cloud isn’t just about the big guys ­ it could be a small guy using the big guy’s cloud to deliver their own applications.”

Although the term cloud computing is comparatively new, many of the underlying technologies ­ from web acceleration to virtualisation ­ are relatively mature and increasingly battle-hardened. How these components are assembled into a business-ready service and which approaches will emerge successfully is less clear.

To date, cloud pace-setters such as Amazon, Google, Yahoo and Microsoft have taken the concepts of grid and utility computing, virtualisation and next-generation datacentres to be the cornerstones of delivering cloud services. Examples such as Amazon’s Simple Storage Service (S3) or Google’s Apps service provide a glimpse of what cloud computing may look like, but neither has yet achieved the degree of reliability to be considered enterprise-ready.

Back to basics

Nevertheless, these pioneers provide a window to a new world of computing, says Vuk Trifkovic, senior analyst at Datamonitor. He believes that cloud computing could make IBM’s much-ridiculed 1943 prediction that the world may only need five computers seem surprisingly prescient. “Look at Microsoft, Oracle, Google ­ every company with aspirations for cloud computing is now significantly bulking up its datacentre,” he says. “Cloud computing isn’t going to have one shape or form, but will offer different levels of service depending on customer needs.”

While there is a lot of marketing hype around cloud computing, Bill Sexton, chief information officer (CIO) at British Gas Services, is adamant this is not just another fad.

“I predict that within five years the way we run our corporate IT will be significantly different,” he says. “In the future it will not matter where the software lives, and in my view if you still have it on site you’ll be throwing money away because you’ll be putting half of your resources into supporting the infrastructure. It’s not the infrastructure that matters ­ it’s the applications.”

Hosting is a core requirement of the cloud computing model. This is not a new idea, but its significance is that it removes the overhead typically associated with managing IT infrastructure.

Four years ago when Justoffbase, an internet supplier of engineering tools and equipment, realised that its enterprise resource planning (ERP) applications were approaching the end of their life, it scoured the market for replacement systems. As Tim James-Parker, a partner at the company, explains, the logical solution for the business was to look for a hosted internet-based application. It opted for NetSuite.

“We use this application like you would use an online bank account,” he says. “NetSuite handles all the maintenance, guaranteeing uptime and the use of the latest technology. I also took the view that NetSuite was probably better at looking after our data than we were, because it’s their business. Also when you have thousands of users sharing the same service, if there is ever a problem it will be sorted out fast.”

As well as removing some of the day-to-day IT operation away from the company, Justoffbase also experienced an immediate 30 per cent increase in business following the move to NetSuite. James-Parker attributes this to the automating of routine processes and integrating company-wide operations.

While the introduction of cloud computing can remove some of the difficulties associated with owning and operating all aspects of IT, it introduces new problems for CIOs to consider. While the public internet is the simplest choice for delivering cloud-based services it lacks end-to-end quality of service (QoS) and is subject to routing whims and variable levels of performance.

Some of these disadvantages can be overcome by the use of optimised internet overlay or web-accelerant technologies, such as Citrix NetScaler or F5’s WebAccelerator, in the cloud provider’s datacentre. However, the optimised internet overlay technology will add significantly to the cost and may make it more difficult for organisations to move between cloud providers. Nevertheless, for business-critical applications ­ where consistent response time and high availability are required ­ it will be essential.

QoS is set to become a defining metric for cloud-based suppliers, predicts Gartner. By 2013, cloud QoS guarantees will be the primary decision criteria for 90 per cent of services used by IT organisations, says the analyst.

And QoS concerns are likely to mean that cloud computing is adopted more readily by smaller businesses ­ where agility is highly prized ­ than by larger, more cautious enterprises and where legacy systems are more deeply entrenched.

“British Gas Services has a lot of intellectual property tied up in legacy processes and systems, and therefore assets, so we will not be switching overnight,” says Sexton. “However, speed to market is also important and having a solution ready to switch on in four months rather than the 12 months it would take for a traditional solution is compelling. The cost profile is also different, with no large capital outlay.”

XChange Business, a currency trader with 220 high street bureau de change franchises, has adopted a hosted, grid-based system from Corporate Modelling. The system is built on a Microsoft architecture. The initial investment was less than a fifth of a conventional in-house system, says Norman Mitchell, the company’s IT director.

Understandably, he is delighted. “It provides us with everything we were looking for ­ cloud computing is the right technology for us. The system is resilient, looked after and it’s a brilliant service for the amount of money we pay,” he says.

While there is a growing band of cloud computing enthusiasts, there are also sceptics. Martin O’Neal, managing director at security consultancy Corsaire, believes that it is just another fad, or worse, another marketing ploy by the vendors. “When they saturate the market with one product, they just invent something else. Grid or cloud computing is a useful concept, but it is only relevant to a few high-end users, for everyone else it’s a miss-sell,” he says.

O’Neal can be certain that some businesses will resist the allure of cloud computing. The financial services sector stands out ­ these companies are ultra-sensitive about managing and controlling their data, so any external supplier can expect to be treated with extreme caution. These companies frequently regard their unique IT systems are a key source of competitive advantage.

For British Gas’s Sexton, the transition to cloud computing will be a pragmatic one. “I’m not yet convinced that we are ready as a business to move over to cloud computing wholesale,” he says. “We need to be certain that our data will be safe in the hands of cloud providers. We need to be convinced we can, given current in-house capabilities, manage cloud resources effectively. However, we must not let these concerns paralyse us, even temporarily, otherwise we would just be delaying the inevitable and missing out on the benefits.”

Key technologies

InfiniBand
This is a high-speed communication architecture used to connect processors in high-performance computing environments. Connecting two or more servers together to form a single logical server – clustering – requires a high-speed connection in order to deliver performance and scalability. Such high-performance connectivity is vital to grid and cloud computing environments.

Cloud computing terminals
Small, energy-efficient terminals, such as the CherryPal, that offer instant start-up and nothing more than web browsing capabilities could become the standard for personal computing in the future. If applications and services are set to reside in the cloud, then firms should no longer need to manage bloated, energy-hungry PCs of today.

Optimised internet overlay
Optimised internet overlay offers cloud providers a more sophisticated approach to delivering reliable and highly available services. Terminating the standard internet connection at the cloud edge, it enables the provider to control and optimise the real-time routing of traffic as well as delivering frequently accessed content from local caches. Taking this approach can be expensive, but consistent internet performance can be guaranteed.

Web accelerant technologies
Not exactly a new technology, but one that will come into its own with the cloud computing concept. These are software or hardware proxy servers that speed up web access times using dynamic caching, compression, pre-fetching and other web-accelerant techniques.

Virtualisation
Offering the ability to reconfigure and dynamically allocate computing and storage resources in real-time, virtualisation is at the heart of cloud computing. Until now it has been used by most enterprises for server consolidation, but it could provide organisations with the means to migrate some infrastructure, applications and services to a cloud provider.

How to introduce cloud computing into your organisation
By James Staten, principal analyst, Forrester Research

Many enterprise IT professionals regard cloud computing as being an inferior form of outsourcing. This reflects the fact that most cloud-based services are still not up to enterprise standards and cannot be monitored and controlled by IT managers. However, business units that are frustrated by the speed of corporate IT to adapt to their needs view the concept as an attractive option.

Cloud computing has all the hallmarks of being a disruptive innovation that all IT professionals should take note of.

As one early adopter put it: “The resistance to cloud computing is much more political and bureaucratic than technical. When you go to a cloud you lose track of who controls what and who is currently on what resources. We’re still working through the political issues. We’ve only succeeded with a small group of divisions, but it is demonstrating the value.”

Rather than ignore cloud computing and hope it goes away, consider the following:

• Start experimenting with the cloud using non-critical applications. Some clouds can also be used to provide overflow capacity.

• Be prepared for business departments to start dabbling with it. Even if IT cannot justify using clouds, your business units will. Cloud computing is a compelling business proposition — infrastructure that can be provisioned with a credit card, with low barriers to entry and low barriers to exit. Rather than block efforts, learn from them.

• Let the cloud vendors know what you want. These firms want your business and are looking for your guidance on what it takes to win it. Once you have some experience with their services, let them know if there are any changes they need to introduce to better meet your needs. And shop around, as we are already seeing differences in the cloud offerings. “Expect to see lots of different clouds that compete,” says Harald Prokop, senior vice president of engineering at Akamai. “If you have massive needs for processor, storage, or geographic dispersion, there will be a cloud model for that.”

• Use cloud infrastructure internally. Learn from what the cloud vendors are doing to improve the utilisation and reusability of your internal infrastructure. Hardware and server workload abstraction is key and can be achieved with virtualisation software. Blade servers from vendors such as HP and IBM enable dynamic workload movement via new virtual I/O capabilities, and several vendors, including 3Tera, Cassatt and DataSynapse, offer middleware that can provide this capability across blade and traditional infrastructure — virtual or physical.

• Build your own cloud. If you have vast datacentre resources, and application deployment is a core competency of your business, using cloud architectures can help make your IT department more responsive to business needs. IBM’s Project Blue Cloud initiative could help you in this, among others. If you are in the business of providing infrastructure services to external customers, run, don’t walk, to try this out.

Is cloud computing ready for the enterprise? Not yet, but it is maturing fast. The concept is wildly popular with startups as it fits the way small businesses like to buy things, and has the potential to completely upend IT as we know it. IT professionals can try to ignore it, but doing so would be a mistake as cloud computing is looking like a classic disruptive technology.

Next week: Computing speaks to IT chiefs who are already using cloud computing to deliver tangible business improvements