Entries tagged with “cloud computing” from Paul Lopez Unwired

Beyond the hype around cloud computing and its variants, there is growing acceptance of the notion that the buying criteria of end customers has moved from a discussion of how the technology chosen and provided to a discussion of what value the technology is providing. This provides the new frame of reference for customers and IT providers alike.  We are finally getting to fully connect the business objectives and requirements with IT services delivery. Given IBM's announcement today of a new data center in Auckland and a Cloud Computing application research center in Hong Kong, there is growing evidence that organizations are increasingly more interested in moving much of their data center operations to off-premise providers. When we set aside details such as massively scalable processing, virtualization, service orientation and always-on access; we have nothing short of a major evolution of business itself. The key will be in pricing strategies of such services because smart IT shops can always reverse engineer your cost structure for standard cloud platform offerings as they consider the option of "private clouds" (a term I utterly detest). IBM references "private clouds" as those configurations where customers have dedicated computing and resources for their own business. They are compute and infrastructure technology stacks, nothing more magical than that. The provider profit margin and value will result from their ability to optimize everything behind the service boundary while hiding complexity from the end customer. That is something worth paying for!

Sun is a company that has been in transition from a legacy hardware business to one based on open-source and services. Their exit ramp led to IBM, but will this be a traditional IBM "tuck-in" acquisition or something more? Acquiring Sun for a mere $6.5 billion is only two quarters of $JAVA revenue and if you factor in the $2 billion in cash on their balance sheet, the offer is closer to $4 billion. Sun is exposed to financial services, telecom & manufacturing. They also face secular decline of their Unix servers and tape storage. Newer technology offerings are not scaling up fast enough to offset margin and revenue erosion. IBM will ave difficulty monetizing Sun's open-source software portfolio too. Many application vendors support Linux faster than Solaris, and even with MySQL, they've not been able to get critical mass for OpenSolaris. Maren Mickos, former MySQL CEO bailed from Sun because of the bureaucracy. IBM gets Java but will they keep the way the Java community directs the development of the language? So now IBM will have dueling UNIX banjos. What's the future of AIX? IBM gets an installed base that they can migrate over time but those customers will open up to other competitive choices, so it's no slam dunk. I believe Sun's NetBeans development environment goes by the wayside in favor of IBM's Eclipse. Sun's purchase of Q Layer bolsters their cloud computing offering, but they were just getting started with innovations like Project Caroline. Still, Sun could never show CIOs why they should pay a premium for their products. Sun sells to developers, IBM sells to CIOs. Not sure which one is Billy Redden in this case.

To become a licensed Hackney Carriage operator (aka Black cabs) in London, you have to "do the knowledge." This can take 3 to 4 years of memorizing hundreds of routes, streets and points of interest. These cabbies have picked us up and taken us where we want to go sans maps, GPS or navigation systems since the 17^th century. There's been a lot of banter lately regarding private clouds versus public clouds. No company of any significant size can move its IT infrastructure to the cloud all at once. You need a plan. And considering policies such as identity management, backup/DR, directory synchronization outside & behind firewalls, IT organizations will not escape paying the price to learn the architecture of cloud computing. Most companies I talk to are attracted to the upfront cost savings but still need a comprehensive strategy for cloud & SaaS scenarios. This becomes especially important when you want to bring your applications & services in-house at a future date. You need to "do the knowledge" of the technology stack because you will still need to integrate both premise and off-premise IT systems. I don't believe there are "private clouds," that was a data center as I recall, why invent more jargon?

Google's presentation at the Enterprise 2.0 show in Boston pushed out more sound bites regarding cloud computing. They made the statement that innovation in enterprise applications during the next 10 years will happen on the Internet (in the cloud).  Certainly, company spokespeople like to put forth the vision at these conferences, but I doubt we will see the obsolescence of Microsoft, Oracle, SAP or other on-premise software during that same 10 year period. The capabilities of the cloud have from most analysts viewpoints, caught up with what you can do on the edge. The question is not about technology however, it's about who carries the asset on their books and how it is managed. There are many companies with rather significant investments in "legacy" systems. What may come to a surprise to this generation is much of that legacy business logic drives corporate differentiation and value creation. It can certainly be ported to new technologies (e.g., SOA hype), but why bother when most of these systems are already depreciated and continue to work? There are still those users who want to "see" the systems running on site, especially if they are communication systems or data centers. It's up to the business leaders to make the case for a change from the status quo. Lasting innovation is driven by market forces, not from the innovation itself.

Beyond advertising, Software as a Service (Saas) may be the next big opportunity for both companies. A combination of free and fee-based services will ultimately replace software licensing as we know it today. But not very soon. Bob Warfield, with SmoothSpan, has a good quick analysis of why Microsoft would want to go to a SaaS model now that Vista and Office 2007 are released. So far Ray Ozzie's been careful to say, "Software Plus Service."  Microsoft's acquisition of Yahoo can benefit both their advertising push (AdCenter) and SaaS as these intersect in their Online Services Group (MSN and MS Live). The question is what happens when you try to merge them together? You don't want a MSN-Yahoo-Live mashup; there has already been some user confusion between MSN and Live. We are still at an early stage of this evolution. Neither company has a fully mature, corporate-ready application service provider solution on the scale of a Salesforce.com. For an enterprise customer dealing with a multi-vendor, multi-application environment, one size does not fit all with regards to SaaS "in the cloud." What hasn't been addressed very well is the uptime and SLA's that corporate customers need. Just look at some recent outages from "the cloud." We have RIM Blackberry (3 hours, second one this year), Salesforce.com (7 hours in February, no one's immune), MS Hotmail/MS Live (6 hours) and let's not forget the BGP injection that brought YouTube down for 2 hours. If I'm an SMB or an enterprise customer relying on these services for anything mission critical, I've introduced another layer of risk to my business. Are outages going to be the norm? Do you really want to put everything in the cloud?