"The Cloud": Saving Grace or Empty Thunder?

By Pam Baker

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In the groundswell of economic pressures, companies big and small are looking to the Cloud for relief. The buzz is everywhere: Cloud computing can cut costs, speed implementations, and scale quickly. The buzz, however, may be slightly off-the mark ... at least in product pitches.

“Just like SOA hype was vendor fueled and thus became more a marketing term than an architecture description, the same will happen in 2009 with the ‘Cloud',” said Ross Mason, co-founder and CTO of open source SOA provider MuleSource. “It's all about buzz and not as much about pragmatism."

That is not to say, however, that the Cloud is a total rain-out.

“Right now, the 'Cloud’ is the most over-hyped Web-based buzzword when it comes to how business gets done,” said EchoSign’s CEO, Jason Lemkin. “Having said that, I would argue that the Cloud is still in fact under-hyped because Cloud computing is really shorthand for what third generation web services can do, and this is something that radically shifts online business dynamics.”

Drivers and Answers

The main driver behind Cloud computing is basic economics. It significantly lowers up-front capital expenses and allows companies to only pay for what they actually use. “Plus, the Cloud model dramatically lowers operating expenses over time by increasing standardization and automation and delivering applications and services more efficiently,” said Dennis Quan, IBM director of Autonomic Computing.

It is a bit mystifying that while everyone agrees on the benefits of Cloud computing, many have trouble defining what truly does, and does not, fit under the Cloud umbrella. Perhaps this explains why Peter Fingar’s book, Dot.Cloud, is a top seller on Amazon before it was even published. In fact, several books on Cloud computing are selling in record numbers as demand for definitive answers swells. Fingar admits that definitions of Cloud computing vary widely, but said he has pegged the concept to two parts:

  • For geeks, he said, Cloud computing means grid computing, utility computing, software as a service (SaaS), virtualization, Internet-based applications, autonomic computing, peer-to-peer computing, on-demand and remote processing—and various combinations of these terms. These are all areas Fingar calls “information factories.”

  • For non-geeks, Cloud computing is simply a platform where individuals and companies use the Internet to access endless hardware, software and data resources for most of their computing needs, “leaving the mess to their Cloud Service Providers (CSPs),” as Fingar puts it.

    In any case, it isn’t the geek or non-geek struggling with the Cloud issue: it’s the CIO. “The big thrill of The Cloud is not having to care who, where or how something is being done,” said Miko Matsumura, author of SOA Adoption for Dummies  and deputy CTO of Software AG. “Unfortunately, that thrill does not extend to the CIO, whose job it is to ensure that it's done properly.”

    Worries at the Top

    CIOs are not the only C-level executives worrying over the Cloud issue. “The key findings of our study showed that despite a mandate to reduce costs, most businesses are not adopting Cloud computing even though they recognize it as a viable option to reduce up-front and ongoing costs,” said Larry Beck, senior director of Cloud Strategy at Avanade. “Fear over security and loss of control of data and systems is hindering adoption.”

    There is another matter proving troublesome: regulatory issues.

    “If you want to use Cloud computing and post data covered by Health Insurance Portability and Accounting Act (HIPAA) on it, you need to carefully consider whether or not it is in compliance,” said Anthony Velte, co-author of the upcoming McGraw-Hill book Cloud Computing Handbook. “The fact that HIPAA data could comingle on a server with another organization’s data will likely get the attention of an observant HIPAA auditor.

  • “If you have data that is regulated like HIPPA or Sarbanes-Oxley you are well advised to be very careful in your plans to place data on a Cloud,” adds Velte. “After all, if you have posted a customer’s financial data and there’s a breach, will they go after the Cloud provider, or you?”

    It turns out that the Cloud, as worldly as the premise is, is restrained by earthly borders. It may simply be illegal to post your information on a Cloud. “If you are in Canada, for example, and you want to post your data on an American Cloud, you may run afoul of Canadian law,” said Velte.

    The Canadian government has declared that government IT workers may not use network services that are operating within U.S. borders. “The reason is that the Canadian data stored on those servers could be negatively impacted based on the Patriot Act,” he said. “And the same can be said of Clouds operating outside the United States. You probably don’t know the laws, if any, governing your privacy and protection in a foreign country.”

    What's in a Name

    In practice, enterprises are facing an onslaught of Cloud products. While some vendors are fudging, even outright misrepresenting, most are not. Confusion reigns for now. “The terminology and ontology for Cloud computing is still evolving,” said Michael Salsburg, spokesperson for the worldwide non-profit organization, Computer Measurement Group, and chief architect of Real-Time Infrastructures at Unisys. But there are some definite characteristics of a Cloud that can be identified now:

    Elasticity Enterprises will take advantage of Cloud computing when they require a high variability on compute power. For example, assume a company requires double the number of Web and application servers a few times a month. They do not want to pay for the capital expense of having dormant servers on the floor most of the time. In the Cloud, compute power can grow and shrink. The enterprise pays on a usage basis.

    Offloading “Context” – About 80% of the IT budget is dedicated to keeping the current infrastructure running. This leaves little time or money to work on new, strategic directions. Moving the “standard” computing environments/tasks to the Cloud off-loads the up-front capital expenses as well as the operational expenses. For small companies, a Cloud can provide efficient enterprise-class best practices.

    Anything as a Service – Imagine, through a Web browser, requesting a set of servers and storage devices to be provisioned and configured to run a large-scale application. This can be requested and managed as a set of service requests that can be made from any browser, including a cell phone. It is this light-weight, service-oriented approach that is the hallmark of Cloud computing.

    Parting the Clouds

    Lemkin said the number of SaaS services has mushroomed in sync with the Web’s growth as the preferred channel to do business. However, he warns that many SaaS services are not truly Cloud services. “While we are seeing the introduction of strong SaaS offerings in CRM, finance, contract management and e-signatures, what we are not seeing is the integration of these services on the Web,” he said. “Instead of being completely siloed, the Cloud enables services to be completely, 100% integrated on the Web, with no install, no IT, and no headaches.”

    What were called “mash-ups” in Web 2.0, he said, will swell in significance as the Cloud enables data, applications and core business processes to follow Internet users anywhere, anytime, in any application.

    “The challenges of Cloud computing is that only a few applications are truly built for the Cloud, as Web 2.0 solutions,” said Robert Klotz, vice president of Technology at Akibia. “Software as a service solutions come close, but they are not truly Web 2.0.”

    Just as some believe the technology isn’t quite up to speed, many see the current performance of the Cloud easily matched on-premise; including scalability. “Critics point out that well-managed company data centers also provide economies of scale,” said Paco Nathan, principal scientist at ShareThis, an social network-sharing tool. “The dirty little secret is that company data centers rely on purchasing rack space and power feeds in advance and buying equipment which amortizes over years and tends to fail and requires repair and replacement plus large staffing and training. The Cloud, does not.”

    Conversely, there are dirty little secrets in the Cloud too. “Multi-tenancy remains the characteristic that delivers the greatest economic advantage so caveat emptor: just because an app. is hosted in the Cloud doesn’t necessarily mean it’s SaaS,” explains Bob Moul, CEO of Boomi, an on-demand integration vendor. “How do you know if it’s true SaaS? Try to trial and/or implement the application today without human intervention by the vendor.”

    At the end of the day, the decision to move to the Cloud, stay firmly on the ground, or move to hybrids somewhere in between, will be made based on a company’s specific needs. For now, it’s just another set of tools to use―or not.

    “The concept of Cloud computing at its core, represents major shifts for companies and service providers from internally to externally, from tethered to portable, from physical security to virtual security, from siloed to pooled,” explains Don Norbeck, director of Product Strategy at SunGard.