Welcome to the next decade of cloud computing

January 20, 2010 Appirio

Ryan Nichols

3 weeks into the new year, and we’ve seen a flurry of activity in the cloud ecosystem: Google entered the general files sharing business, in an important enhancement to Google Apps. IBM surprised the industry with what they’re calling the “industry’s largest cloud deployment” at Panasonic, and turned LotusLive into a platform. Microsoft and HP announced a broad partnership that included HP infrastructure for private clouds– the closest thing we’ve seen from HP to a cloud strategy.

The pundits, of course, have already weighed in on what else the world should expect from cloud computing in 2010. Gartner calls cloud computing the most strategic technology for 2010, and predicts that 20% of all companies will go serverless, spending $150B on cloud technology by 2013. Others expect cloud outages and cloud malware. IDC expects a bridge between private and public clouds, others think the private cloud is nonsense. Infoword expects cloud standards and good things from Microsoft, others are bearish on both.

They can’t all be right… What should thoughtful CIO’s expect from cloud computing in the rest of 2010? To find out, Appirio organized a forecasting fisticuffs last week (you can hear a replay here)– bringing together some VERY opinionated people on the hot topics around cloud computing: Dennis Howlett (Irregular Enterprise), Vinnie Mirchandani (deal architect), Phil Wainewright (Software as Services) and our own Narinder Singh.

The forecasts were flying:
  • Phil on the private cloud: “I think the private cloud is a very dangerous delusion. Its something I’ve been warning people about for months. 2010 will be a year of disappointment for corporations following the private cloud. It’s what I called ‘fools cloud….’ But I actually think that IBM and Microsoft have a fiduciary responsibility to their stakeholders to hold their customers back from the public cloud. They’re going to make much more money on people trying to build their own private clouds. Why would they encourage customers to do something that hurts their bottom line?”

  • Dennis on cloud standards: “We’re living in wild west times. There don’t appear to be many, if any, standards to protect people when things go wrong. We’ve got an golden opportunity to address the ‘s’ in ‘as-a-service.’ I’m looking forward to 2010 being the year where these conversations start in earnest. Vendors will realize that this is a business challenge, not just a technology one.”

  • Vinnie on innovation: “In 2010, IaaS is going to come online in a massive way. When you look at what Microsoft has invested, its a mind-boggling degree of scale and efficiency. I think that SaaS vendors are going to come to the realization that they shouldn’t be investing in their own infrastructure.”

  • Phil on PaaS: “Traditional ISVs like BMC are facing competition from SaaS-companies like ServiceNow. I’m wondering whether BMC can use a multi-tenant platform like Force.com to come back? Established vendors like PaaS because they can put their existing business logic on an established technology platform.”
  • Narinder on the role of startups: “Look at electricity: The guy who invented the waterwheel isn’t the one who made public utilities happen. It’s shocking how often that we assume the existing players will sustain themselves– history has shown that it hardly ever happens. The likelihood is very high that out of Microsoft, Oracle, SAP, and IBM, at least one will be irrelevant by the end of the decade. The odds are stacked against them.”

Two other fascinating topics: The first was security and risk, a topic all agreed is often misunderstood. “Security is often an excuse to say no,” said Narinder, “Not a valid discussion of overall risk of a new environment vs. a legacy environment.” Vinnie agreed: “Most on-premise shops are down 10-15 hours a week. What kind of SLA is that? But when a cloud vendor goes down for 15 minutes, its all over the evening news.”

The second was data and benchmarks. “SaaS vendors are building incredibly valuable databases of business metrics,” claimed Vinnie. “We don’t even know what to do with these connections.” Dennis agreed, arguing that there is more value in this data than in the applications themselves. The challenge is as much business as technology– how can this data be harvested in a way that’s consistent with the expectations of users.

So what will the world of cloud look like if even some of these predictions come true? One thing is for certain, the cloud is ready for mainstream enterprise adoption. Nicholas Carr famously compared the transition to cloud computing to the transition to public electric utilities. It took companies in the U.S. 50 years to move from generating 90 percent of their own electricity to consuming 90 percent from public utilities. Technology shifts happen even faster today. While it’s not clear how long the shift to the cloud will take, it is clear that the time to get started is now.

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