A silver lining

By Julian Rogers, Editor

Clouds are forecast to fundamentally transform the way organisations operate. But despite the benefits, the migration to the cloud far from being free from IT headaches and critical challenges, as CXO discovers.

“Moving to the cloud is no different from any other IT project you take on. You pick something that's going to give you good visibility if it goes well and doesn't mean you're going to lose your job if it goes badly”
-Michelle Bailey, Research Vice President for IDC's Enterprise Platforms

As technology continues to evolve, more and more elements of our lives are being held not on our personal computers at home or in the office, but by websites on servers in remote locations we never even see. Data storage is cheap in these environments, often in the range of pennies per gigabyte - so cheap, in fact, that it is often provided in surprising quantities for free. Think the cloud doesn't affect you? Then think again. Those photos you uploaded to Flickr last night? In the cloud. Your Facebook profile? That's in the cloud, too. The YouTube video you posted of Uncle Brian falling over at cousin Susan's wedding? Sitting on a server somewhere in a facility - again, in the cloud.

To the end user, the cloud is invisible. You access an application being run on a server operated by someone else, through the internet, as opposed to one stored on your own computer's hard drive. As far as Joe Public is concerned, the technology that supports the applications doesn't matter; it is the fact that the applications are always available that is important. One of the earliest ways people used cloud computing was to store and access their email: rather than buying a server themselves, they signed up for an email account at a website like Yahoo or Hotmail, had their emails go directly to the provider's server and accessed them via the web. Gradually, that model came to be the accepted method of delivery for an increasingly varied array of services and products.

"Cloud computing is one of these concepts that come along every once in a while in IT and shakes up the foundation of the way we think about computing," says Ric Telford, VP of Cloud Delivery Services at IBM. "It's a new style of IT delivery model that gives a highly scaleable, quickly provisionable, pay-as-you-go base to IT services - and does so in a way that allows customers to consume technology in a highly standardised way."

The business benefits of such an approach are significant. Reducing - even eliminating - hardware and associated operating costs is clearly a no-brainer for corporate users, many of whom are already moving toward subscription-based software as a service (SaaS) models. Online business applications offered by companies such as Salesforce.com (for customer relationship management) and Workday (for human resources and financial software) not only replace expensive programmes that would otherwise need to be run and managed by the company onsite, they can also reduce the need for corporate computer servers and the related costs of maintaining them. Instead, companies pay subscription fees for usage rather than licensing costly enterprise software. SaaS is a growth industry: a new study by Forrester Research concludes that even in the recent downturn, SaaS providers were seeing double-digit growth in their subscription revenues.

Stormy weather ahead

Nonetheless, questions and concerns remain, not least around security, liability and interoperability. For instance, how secure are public clouds? What if the cloud goes down? What if there's a disruption to the network? Security is certainly an issue: the findings of one recent survey from SaaS provider Mimecast show that security concerns were the leading reason given by respondents in all categories for not moving forward with cloud-based applications. Over 46 percent of respondents that had considered cloud-based applications chose security as the main reason for not moving forward, and this was true across a majority of industries, including financial services (76 percent), energy (75 percent), government (67 percent), retail (61 percent) and technology (40 percent).

Michelle Bailey, Research Vice President for IDC's Enterprise Platforms, says: "Security is far and away the overarching concern around public cloud environments, and that's one of the reasons why we at IDC believe the private cloud has more momentum because you can still control security in the way you've always been able to control security. I heard someone say recently that the public cloud will just amplify all the mistakes companies have been making internally, and I think that's a really good way to think of it. Having said that, people will learn as they go with the public cloud, and while there's going to be mistakes made along the way, ultimately that's where a big part of the market will be going."

Rolf von Roessing, Vice President of not-for-profit IT governance association ISACA, believes business and IT managers should take the time to review their security systems and resources, and ask themselves whether their information security management can effectively defend their data and other assets in the cloud. And even if an initial budget to extend and enhance a firm's IT security resources to fully support the cloud is not apparently available, IT managers should not lose sight of the possibility that some of the direct cost savings that arise from cloud migration can be invested in security facilities. "It's important that in the rush to embrace the obvious benefits of the cloud, businesses do not overlook the security implications of extending their IT resource into what is, to all intents and purposes, a virtual environment," he says.

And security is not the only issue concerning IT experts. Vint Cerf, founding father of the internet and Google's so-called Chief Internet Evangelist, believes that while the cloud is already here, considerable work needs to be done in order for its true potential to be fully realised. "We don't have any inter-cloud standards," he warns, comparing the situation to the lack of communication and interoperability between computer networks he faced back in 1973 when designing the common protocols that revolutionised - and paved the way for - the worldwide web. "People are going to want to move data around, they're going to want to ask clouds to do things for them. They might even want to have multiple clouds interact with each other in order to take advantage of the computing power offered through such combinations. There's a whole raft of research work still to be done and protocols to be designed and standards to be adopted that will allow people to manage those assets."

A compelling case

With these concerns it is little wonder that some CIOs are resistant to moving to the cloud environment. "Some still are fighting the shift to SaaS and cloud computing," suggests Philippe Courtot, CEO and Chairman of Qualys Inc. "But, I don't believe that resistance to the transformation of on-premise business IT to cloud computing-based IT is a viable option. Not for long. The business benefits, cost savings, and reduction in complexity are just too compelling for businesses to overlook." Although much of the enthusiasm around the cloud has been dampened there is no doubt that the forecast for the cloud is that is here to stay. Research released by Resource on Demand, an IT recruitment firm, reports a record number of enquiries for Salesforce and SaaS specialists during the first months of 2010. The financial and organisational benefits of switching to cloud-based storage and computing systems are clearly driving this surge in demand, and analyst firm Gartner recently predicted that within the next four years 20 percent of companies will have no appreciable local resources.

Bailey stresses that the cloud doesn't vary from other projects a CIO undertakes: "Moving to the cloud is no different from any other IT project you take on. You pick something that's going to give you good visibility if it goes well and doesn't mean you're going to lose your job if it goes badly. Pick an application that really plays on the strength of the cloud, where time-to-market and scale is important. Grid-based applications, email and your application development environment are all a really good fit for the cloud. Then you've got to look at your whole application portfolio, and if things go well there, decide what will be the next tier of applications to bring over."

The future is now

These days, no computer user is an island. A recent study determined that 80 percent of the data used by business comes from outside the company, and cloud computing is the technical response to this reality. And while many don't see it as significantly different from pre-existing computing models such as hosted services and outsourcing, the point is that attributes such as usage-based pricing, shared resources, near real-time deployment and user simplification together make business and consumer cloud services easier and cheaper - and often better - to consume than through traditional delivery modes. Paul Maritz is CEO of virtualisation software firm VMware. He thinks the movement to the cloud is inevitable as more and more information - personal, professional and statistical - gets digitised. "Increasingly, individuals are characterised by a body of digital information," he explains. "And that information needs to live on over a period of decades - the rest of our lives -beyond the lifetime of any device you might have."

Courtot thinks the sky's the limit with the cloud's potential. "While the visible shift to cloud computing to date has been the movement of applications and data to the cloud, it's not going to stop there. Soon, the day will come when companies outsource not only their software but their network infrastructure, as well. One day, most everything we do on private networks- manage information, applications, infrastructure, and services-will be accessible instantly and securely from anywhere and from any Web browser. It's time to prepare." Meanwhile, Bailey anticipates a hybrid model. "You're going to have some things you always keep in house, some things you send to a service provider and some things you send to the cloud. And at the end of the day, it's all about cost justifying and economics: where is the cheapest place I can run this application without giving up on security and quality?

And herein lies the reason why cloud computing is so important: not because it creates greater efficiencies or scalability, or because the economics are so attractive; not because the vendors, marketers and media tell us so; but because it will ubiquitously come to touch every aspect of our increasingly digital lives. The pile of letters on the mat each morning has already given way to the email database on the computer, which in turn is now making way for cloud-based Hotmail or Gmail accounts. The clipping left on the desk of a colleague becomes the attached PDF file, later to be superseded by a set of shared bookmarks, hosted offsite. The faded photos in an album are replaced by JPEGs on a hard drive, then a hosted sharing service like Flickr. The tilting CD tower - itself a digital replacement for our scratched and much-loved vinyl - gives way to the MP3-filled hard drive, which then inevitably yields to a service like Spotify: music that is always 'there', waiting to be heard, somewhere in the cloud.

The point is, the cloud isn't just about the future; it's already here, present in both our homes and our places of work. Is cloud computing new? Not really. Will it reshape the way we use and buy IT power? Definitely. Like the internet in the 1990s, the cloud is an aggregation of ideas and solutions that just work. And the cloud will change the IT landscape like the internet changed the world. Adopting it is not a case of if, but when.