A Cloud Provider Roundup

By Robert McGarvey

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Those clicks you hear: that’s the sound of IT shutting off in-house servers because the data they once held has been moved to the Cloud. No, we’re not exaggerating. “Cloud is the next solution in computing platforms,” said Theresa Lanowitz, founder of Voke, a San Francisco-based analyst firm.

Right now, we are at the start of a massive migration that will utterly rewrite the relationship of an enterprise to its data but the worrisome bit is that even Cloud insiders admit there is still an awful lot that needs to be known about clouds. This extends right down to dollars and cents. “Pricing is a moving target,” admits Susie Adams, CTO of Microsoft Public Sector, which is involved in helping roll out Microsoft’s Cloud offerings.

The fact that Cloud pricing is vague probably doesn’t surprise you, but the fact that Microsoft is a Cloud player just might. Accept this: around about now, almost every major IT provider claims to have some kind of "Cloud" offering because they all see what the next big thing is going to be. So, who’s on first? What are they doing? For how much? Read on for the a list of what’s happening in the Cloud right now.


From Hotmail to X-box Live, Microsoft has staked out its place in the clouds, but Adams wants to point a finger at the company’s industrial-grade offerings, too. “We haven’t talked much about it but we are involved,” said Adams, who adds: “We’ve been in this space for many years. We offer a lot of enterprise-level services in the Cloud.”

Live Meeting and Azure Services, a developer’s tool that goes head-to-head with Google App Engine, lead the list of public clouds from Microsoft, but the company also is busy creating custom clouds for government agencies and for the private sector. Microsoft’s big bet is that the first Cloud offering to take off will be email (“It’s become a pain point for many customers,” said Adams) and Microsoft believes they will gladly turn over the increasingly costly aggravation that email has become. From there, Microsoft hopes to coax customers to buy more services and there is plenty of confidence this strategy will work.


By any measure, IBM is a 900-pound gorilla in the Cloud space and it has every intention of staying a leader, said Dennis Quan, director of Development, Autonomic Computing, IBM Software Group. IBM already operates 13 Cloud computer competency centers around the world (from India to Brazil to South Africa and Silicon Valley). But, insists Quan, “Cloud is not one size fits all” and at IBM the strategy going forward is to work with potential customers to identify what they want to move to the Cloud, what they want to hold in-house, and at what price. “We see a hybrid model for Cloud services predominating,” said Quan.

Perhaps even more exciting, IBM sees a growing market for in-house, private clouds. The idea may seem contradictory on its face, but not to Quan, who elaborates: “The customer will be able to establish a Cloud inside its own four walls” and, he suggests, this customer also will benefit from access to more robust computing solutions at what will amount to discount pricing. That just may be a winning formula in the present economic environment, according to IBM.


Online retailer Amazon, from the early days of Cloud computing, has been aggressively hunting customers and, to Amazon’s credit, it offers some of the clearest pricing in the industry. Sign up for Amazon Elastic Compute Cloud (EC2) and you can access, on demand, a high capacity CPU running Unix or Linux for $.80/hour. A similar computer running Windows is $1.20/hour. Amazon also has crafted a deal where it is running IBM apps inside its Cloud. And it offers vast data storage in the Cloud, via Amazon Jungle Disk; at nominal charges. Amazon increasingly figures into all conversations about adopting Cloud strategies, particularly inside SMBs. Of course, in addition to ad hoc, a la carte pricing, Amazon offers a range of subscription deals for customers with continuing needs.


Another Cloud powerhouse, Google offers a mix of free and paid Cloud services. Among the former are Gmail and Google Apps (which many users say now rivals Microsoft Office); Google Apps for business ($50/user/year) provides more storage and better support. Meantime, Google App Engine―where Google makes available Cloud resources to developers―now imposes fees on many users but charges remain nominal ($.12/GB for outgoing bandwidth; a dime per GB for incoming). Because Google is Google and because Gmail and Google calendar seem to be winning more converts many eyes in the Cloud community remain on Google as the dark horse in the race.


Hewlett Packard is another Cloud heavyweight and they talk the talk a CFO wants to hear. “There are significant cost savings involved in using a Cloud,” said Rebecca Lawson, director of Service Management and Cloud Solutions. The Cloud is energy efficient but when coupled with shifting energy costs to low-cost regions such as Washington state with its vast hydroelectric resources deliver still more savings, said Steve Cumings, director of Scalable Computing & Infrastructure. The other advantage HP sells hard is instant scalability. With the Cloud, resources can be added on a just in time basis, as needed to solve problems in real time.

Money Talks

Just how much would an enterprise user save in moving tasks and data to the Cloud? The answers remains case by case. Cloud computing very much remains a bespoke business but insiders are confident that savings of 7%-15% will quickly come to most companies. It is just cheaper to operate an organization’s data infrastructure from a rented Cloud. That is why optimism prevails among Cloud providers, especially now.

“The recession just may benefit Cloud computing,” predicts David Rice, a co-founder of TrueCloud, a Phoenix-based provider of enterprise-level applications in the Cloud. Rice further predicts that the obvious cost savings involved in Cloud computing will drive Cloud adoption as more companies recognize the need to upgrade, particularly as the recession lessens its grip, but they will want to do it on the cheap. IBM's Quan shares this thinking: “We believe Cloud computing will grow as a result of the current economic conditions.”

As a busy freelance writer for more than 30 years, Rob McGarvey has written over 1500 articles for many of the nation's leading publications―from Reader's Digest to Playboy and from the NY Times to Harvard Business Review. McGarvey covers CEOs, business, high tech, human resources, real estate, and the energy sector. A particular specialty is advertorial sections for many top outlets including the New York Times, Crain's New York, and Fortune Magazine.