In search of a silver lining

Most corporate IT leaders will remain reluctant to use cloud-based services until the benefits are made clearer

The concept of cloud computing is being vociferously promoted by hardware and software companies, which stand to profit from any mass adoption of cloud-based services. But beyond the tightly focused confines of vendor marketing departments, the model does not appear to be widely understood by potential UK buyers.

“Everyone is going on about cloud computing, but if you walked into the top 100 FTSE organisations and asked them about it, they would probably say, ‘What the hell are you going on about?”, says Clive Longbottom, service director for business process analysis at research firm Quocirca. “It has been covered a lot in the press and by the analyst companies, but cloud computing is still not out there in people’s heads and there is an education issue that needs to be addressed.”

Ian Osborne is project director for Grid Computing Now (GCN), a publicly funded body charged with accelerating the development and deployment of grid, utility and cloud computing services in the UK. He admits that cloud computing is probably too bleeding-edge to register on most organisations’ radar, but he remains adamant that in the near future, few software applications will be delivered by any other route.

“It is probably a step ahead of how people are thinking right now, but cloud computing is the next logical step for software,” he says.

IT professionals might have a better idea of what cloud computing can do for their enterprise if they knew the exact nature of applications and services that it encompasses. As with so many other broad concepts within the IT industry, there is no strict definition for the term, and little agreement on what it covers.

“The cloud is not just a simple trend towards one model of computing,” says Daryl Plummer, managing vice president at analyst Gartner. “Cloud computing has been seen by many as a re-envisioning of other distributed and utility compu ting models that have been around for quite some time. Utility computing, on-demand services, grid computing, software-as-a-service (SaaS) and others all play a role in the evolution of this emergent phenomenon.”

But while there is a degree of crossover between the primary technologies and infrastructure involved in cloud computing, elements such as grid computing, utility computing and SaaS, should be treated separately from other on-demand computing models that deliver applications and services via the web, says Tom Rogerson from the consultant financial services division of IT services group Computer Sciences Corporation (CSC).

“The word ‘cloud’ is used by everybody, but everybody has a slightly different take on what it means. Consumer-oriented cloud entities such as Flickr and Facebook are well established, as is SaaS, but these are different from the new web services being offered by Amazon and Google, which are less well defined,” says Rogerson. “I think we are all peering through a glass darkly – ­ not just users and customers, but in some respects the service providers and cloud computing vendors themselves.”

Google and Amazon provide a network-connected “cloud” of thousands of servers around the globe that customers access via the web on either a pay-per-use or subscription basis, and which deliver everything from hosted business applications and data storage to search facilities and high-performance information processing resources.

The benefits for the user organisation is that it is spared the need to host those same IT resources within its own datacentres or server farms, and ­ – in theory at least ­ – can access only those it needs, when it needs them, and pay far less than it would if it owned the applications, servers or storage facilities itself.

“The customer now does not have to have a big datacentre, so they can move away from the skills required to run that datacentre and towards a much more s imple subscription model,” says Quocirca’s Longbottom. “If you have 1,000 users for example, you know exactly how much you are going to pay. In theory, it should be cheaper but it depends on the service provider. They have lowered their cost at the hardware base, but it is a question of whether they pass those savings on to the user, or see what they can get away with.”

Other advantages include better infrastructure reliability and application availability, Longbottom says. “If any one server fails, it has no impact on the wider performance of the infrastructure – the owner can rip and replace. This is where the service providers want to be in terms of providing equivalent services for corporates. If anything happens inside the cloud, the customer has no visibility of those problems so service level agreements go out of the window – ­ you don’t have to bother with them at all. They can charge for other services such as bandwidth,” he says.

Cloud computing vendors often cite cost savings as a key benefit, but CSC’s Rogerson is not convinced. “I don’t think there is a clear return on investment argument for cloud computing, but I am not convinced that cost savings are the primary argument for the cloud anyway,” he says. “It is mostly about scalability, performance and reliability. If an application running on an Amazon server costs 10 cents an hour rather than 15 cents if it were hosted in the organisation’s own datacentre, I’m not sure that is going to be a compelling financial argument when you consider the other factors involved.”

The problem for Google, Amazon and other service providers either actively offering or considering the introduction of these services, is that larger organisations have, for the most part, already spent large sums of money kitting out existing datacentres to provide exactly the same thing ­ – secure, reliable and flexible IT resources ­ – within their own distributed networks. These organisations are unlikely to suddenly scrap those investments in favour of subscribing to cloud-based services. CSC’s Rogerson points out that for the most part, cloud computing appears to have attracted only smaller businesses so far.

“The classic is Google Apps, which claims hundreds of thousands of companies as users, but most of these firms are tiny,” says Rogerson. “The customers CSC deals with are much bigger. They are not demanding a lot of advice or consultancy on cloud computing so far, either because this stuff is not ready for the big time or because the clients in question are simply too conservative.”

Another concern for big companies about cloud-based services is security. GCN’s Osborne says this is not as big an issue for some companies as it is for others, but many organisations, particularly those in the government sector, still do not like to think about providing users with access to services outside their own firewalls.

“There is a whole political agenda for some governments about data being shipped outside the country, and things are probably going to change. Some big firms that have invested in grid computing may not know where their information is but are far less concerned about it, but for others there will always be a level of concern about where data is stored, how it is secured and what happens to it if something fails,” he says.

In search of a silver lining

Most corporate IT leaders will remain reluctant to use cloud-based services until the benefits are made clearer

Rogerson believes security is still a problem area. “There are horror stories about the cloud going down now and again. Also, some organisations struggle with the idea that they are not able to see or touch the IT infrastructure supporting them,” he says.

Longbottom says network availability and performance is still an issue for many, and this is where service-level agreements (SLAs) attached to cloud services do still count for a lot. This is especially true for organisations that rely on incumbent service providers such as BT to provide access to the cloud, rather than independent providers that use multiple carriers to provide a variety of wide area network (WAN) links from different sources to minimise potential network capacity and latency problems.

“If one cable goes down, they still have sufficient bandwidth to support the cloud computing model in terms of link redundancy,” says Longbottom. While awareness over what cloud computing entails and the benefits it can deliver can be expected to rise over the coming months, few IT chiefs will become converts unless the applications and services they need are available.

To date, offerings are largely limited to standard desktop software and on-demand SaaS offerings from Salesforce.com and others. But not every piece of software can be easily adapted for delivery through the cloud.

“There have to be applications in the cloud that are interesting for enterprises to shift to a cloud model. Hosting email on Gmail or whatever rather than the organisation’s own datacentre servers is not going to change the world. We have to provide the applications that banks and insurance companies already use in a way that is safe and the benefits clear,” says Rogerson.

“The challenge is that if you have to build applications specifically as a cloud service, can you take legacy systems and put them on the cloud? The benefits are about scalability and parallel processing, but most legacy applic ations are not built that way and may need re-architecting.”

Service providers will also need to allow individual organisations to experiment with SaaS as an alternative to the desktop software they already run, says Osborne, while software vendors have to make licensing options clearer and ­ – almost certainly ­ – cheaper to attract larger numbers of subscribers. Both parties must work together to integrate SaaS-based applications with a wider array of web services that make more sense for the corporate buyer.

“SaaS is a separate service from the IT department, but is fundamentally an easily understood replacement for desktop software. I hope to hear some good ideas from Microsoft and other software licence vendors about software virtualisation and helping buyers get value for money,” says Osborne.

“When you look at SaaS, service-oriented architecture and web services, it is clear all of these things have to come together, while backup and archiving can also be delivered as part of a cloud service,” says Longbottom. “But unless you have the means of collating any of these functions, you need software-oriented architecture to make it work to bring together all the strands.”

And service providers that enable enterprises to dip their toe in the water as far as cloud computing is concerned are likely to collect more subscribers, particularly if security fears can be allayed.

“I like the idea that the cloud can be almost an extension of the corporate datacentre, whereby a firm can store its data securely on its own servers, but might want to get access to another 100 nodes to process it. This does not necessarily mean putting confidential data out there, but putting it in a relatively safe playground where a firm can test the scalability of data modelling or other applications,” says Rogerson.

Clearly, cloud computing is at the top of the hype curve, and large organisations still have questions about security, availability and performanc e. Longbottom estimates that we are still another three years away from the point where most potential corporate subscribers understand cloud computing sufficiently to be ready to begin moving parts of their IT infrastructure to a hybrid environment. And while companies are unlikely to ever trust all of their assets to the cloud, greater use of on-demand computing is certain to cut the number of internal staff employed in corporate datacentres.

“Most organisations will still have functions served internally and others served by the cloud,” he says. “But those left at the customer-end become far more important because they have to sit there and make sure that the business is facilitated in the best possible way ­ – they need to really understand its needs and where it is going, and translate that to the service provider.”

Next week: in the fourth and final part of our Definitive Guide, we investigate the legal implications of cloud computing.

Cornerstones of the cloud computing model

No strict definition for cloud computing exists, but the cloud-based IT services delivery model can be characterised by four different elements:

On-demand web services
Google and Amazon offer low-level desktop applications that are hosted on thousands of their own servers across the globe and are available to customers as on-demand or subscription-based services via the web. For example, Google Apps comprises email, word processing, presentation software, collaborative applications such as shared calendar access, security and storage services. Amazon’s Web Services focuses more on data storage and the provision of virtual machines onto which customers can load and run their own applications.

Software-as-a-service
Largely intended as a replacement for desktop software running on user PCs, the software-as-a-service (SaaS) model encompasses an ever-growing range of enterprise-class applications that customers do not own but either download or access through a web-based portal. Like on-demand web services, SaaS theoretically provides cost, management and reliability benefits to user organisations that can lease applications on a pay-per-use basis rather than buying expensive licences and upgrades.

Grid computing
Grid computing defines a scenario where multiple interconnected computers pool their unused data processing capabilities to run large applications that require more power than is readily available elsewhere. Sometimes called network distributed parallel processing, grids are most often employed in the academic and research community to share the burden of large number-crunching applications at least-possible cost.

Utility computing
Utility computing is a more commercialised version of grid computing where service providers make high-performance computing resources available to customers looking to lease additional processing capabilities, storage or applications on demand. Utility computing is popular with enterprise companies because service providers also take on the burden of infrastructure management on their behalf.

Cloud vendors to watch

RightScale
Management software provider RightScale aims to help companies tap into the remote computing power of Amazon's Elastic Compute Cloud datacentres so that they can run web applications at a lower cost than investing in their own servers.
www.rightscale.com

Keynote Systems
Keynote Systems specialises in helping companies iron out any performance issues with on-demand applications. The Keynote Internet Test Environment (Kite) is a web performance tool that allows developers to test the most complex Web 2.0 applications in the cloud before they go into production.
www.keynote.com

Elastra
Elastra’s Cloud Server platform allows the configuration and deployment of applications across the web simply by pointing and clicking. Elastra claims to shorten application lifecycles, and allow companies to bring new products to market faster by simplifying the way they tap into, manage and pay for their database and application infrastructure.
www.elastra.com

CherryPal
CherryPal’s eponymous cloud computing terminal has 80 per cent fewer components than a typical PC and is said to consume 97 per cent less energy. The device boots in 20 seconds and automatically directs users to the CherryPalCloud part of the Amazon Elastic Compute Cloud. Secured by defence-grade encryption, the device is touted as being extremely secure and virus free.
www.cherrypal.com

eXpresso
Cloud computing is all about delivering services and applications, and eXpresso has started by offering one of the most basic, but sought-after functions – the sharing of Microsoft Excel spreadsheets, with Word, Powerpoint and PDF files to follow. With Microsoft's blessing, and some funding, legal Excel users can send their spreadsheets to an eXpresso cloud for sharing, editing, downloading or printing.
www.expressocorp.com