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Study Reveals The Cloud Does Save Businesses Money

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Despite the hype and claims by large software companies about the miracles of cloud computing, a combined study by Ireland’s National Software Engineering Research Centre (Lero) and NUI Galway has shown that cloud actually results in significant time savings for firms and drives down administrative costs.

The new report claims to offer the first empirical evidence globally of the benefits of cloud computing. Globally, the market for public cloud services is expected to increase by 19pc to US$109bn this year, according to Gartner.

Ed Anderson, Gartner’s cloud forecaster, predicts cloud computing is set to grow a further 100pc to be a US$207bn market by 2016.

“Despite the huge growth in cloud computing, research to date has largely been based on anecdotal evidence,” Dr Kieran Conboy at the Cairnes School of Business in NUI Galway, who is leading the SFI funded Lero research, explained.

“NUIG conducted an in-depth, evidence-based study across a number of Irish-based organisations to see if the perceived benefits stood up.”

Cloud-bursting

As well as supporting previous industry claims of cost and time benefits, the Lero research also found that cloud introduces a positive shift in the way companies interact with external sources, such as customers, and in the way employees communicate with each other. “This has the potential to leverage more innovation and collaboration along a company’s supply chain,” states the report.

A critical finding of the research was that all too often, organisations view adoption in overly simple terms – either they should adopt the technology or not. Conboy commented, “We found too many organisations were making the decision based on an initial ‘go’ or ‘no go’ basis and were failing to realise that various people and parts of that organisation were making different decisions – often with very negative consequences.”

The research found different results between those “who only dip a toe in the water” compared to those who actively promote routine use of cloud and deep integration of the technology with existing organisation activities and systems.

Recognising the need to examine adoption of cloud technology at multiple levels, Dr Lorraine Morgan of NUIG said: “The tech sector has a history of hyping the next big thing. In the case of the cloud, our study suggests that many of the claims stand up.

“In view of this, it is important to explore the barriers to more widespread adoption amongst business and this will be the subject of our follow-up study,” Morgan said.

Author: John Kennedy
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Cloud Computing Key To Business Success

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A massive 93% of financial decision makers believe that cloud computing will be important to the success of their businesses over the next couple of years, according to research.

Vanson Bourne questioned 100 senior executives within the finance departments at UK companies for the research, which was commissioned by Google.

It also found that 68% of businesses surveyed had either already implemented cloud services or have plans to.

A total of 66% makers believe the cloud increases the IT department’s contribution to corporate strategy and 69% believe that cloud computing increases the IT department’s ability to innovate.

The importance of cloud computing to business strategy means the finance departments will get more involved in IT decision making. The research found that half of the finance executives believe that, as cloud computing becomes a business strategy, the CFO will have more influence over IT decisions.

Of the surveyed executives, 94% believe that cloud computing provides their business with quantifiable benefits, while 64% said cloud computing is more beneficial than traditional outsourcing

“To date, enterprise cloud adoption has been largely driven by the IT function. However, today we see ourselves having more discussions with CFOs, COOs and CEOs and it is not hard to see why. The benefits of cloud computing go far beyond the obvious cost savings on software and reducing the burden of maintenance,” said Thomas Davies, Head of Google Enterprise for the UK and Ireland. “The strategically significant role it can play within an organisation in terms of driving innovation and productivity is making it an increasingly attractive option for businesses that want to remain competitive and agile.”

What are the benefits of the cloud?

44% – reduced IT maintenance costs
47% – reduced IT spend
47% – reduced operational costs
34% – improved process efficiency

Author: Karl Flinders
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Cloud Is The Only Way To Go For SMBs

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The cloud computing model represents an important change in how information technology works. Just as the major changes that happened first with the client-server application model and then with the Internet, the drivers of this new revolution are accessibility and cost – how can computing infrastructure, platforms and applications have more widespread usage and how can they be made cheaper. In fact, price and accessibility go hand-in-hand: the cheaper technology becomes, the more people will use it.

These two drivers are especially valuable for small businesses. By making technology cheaper, the cloud allows more small businesses to adopt IT solutions – from simple e-mail and applications to more complex projects – leading to leaner and more profitable companies. The cloud has also brought a proliferation of service providers, and this gives businesses more options when choosing their vendors.

The advantages of pay-as-you-go for SMBs

The cloud computing model is furthering the shift from products to services that started in IT some years ago. The end-product of this is the pay-as-you-go model for everything, from infrastructure and servers to software applications. In this model, the user only has to pay for the resources used over the course of a given period, such as a month. This means, for instance, that a small business can pay for storage as their storage needs grow, instead of having to buy storage based on growth projections. The same thing goes for processing power, server instances and even application licenses.

This is important for small businesses for several different reasons. First, for a lot of them, making any kind of projections about how their IT needs will grow over time is usually very hard. Even large companies have trouble managing their operations, as evidenced by Wal-Mart’s recent troubles. For smaller companies, predicting future needs is even more difficult. A sudden growth in popularity due to word-of-mouth advertising may bring so many visitors to a small business’s web site that it becomes unresponsive, generating frustration amongst potential customers and having a negative result, instead of a positive one. With the elastic, pay-as-you-go model of the cloud, any small business can have access to easily (or even automatically) scalable computing platforms, reducing the risks of downtime and the need for accurate projections.

Another major advantage of the pay-as-you-go model is that it transforms expenditures in IT from investments into expenses. This means that companies no longer have to buy a new server. They can, instead, pay for a cloud server instance on a monthly basis. This greatly reduces the costs of going into business. As an added benefit, some of the major cloud providers have “free tiers”, focused on small usage scenarios, which means that recently started businesses can have access to top-level providers for free.

Finally, this model solves a major problem of small businesses: the fact that a lot of them fail. If a small company makes an investment in software and hardware and then goes out of business for any reason, it has no way of recovering that investment, since there isn’t much of a market for used servers, desktops or software licenses. By adopting cloud solutions, however, a company can shut down its operations and cancel software licenses at the click of a button. This means, in addition to having to make no investment in the first place, no leftovers if the company goes under.

A deluge of data

An important side effect of the shift to the cloud is the proliferation of data that has become available for anyone to access. Not only are cloud services massive producers of data, usually about their availability, uptime and so on, but more and more services are opening up their data for consumption by others. It is possible today for even small companies to leverage data from several sources, such as Facebook and Google analytics, to improve their offerings and better reach their customers.

Although information is the lifeblood of any business, big or small, Big Data can have a much larger impact for small businesses and startups. By making use of this data, companies can better segment their customers and create more focused marketing campaigns, improving the return on investments. For companies with a more limited marketing budget, having a better response rate to advertisement can make all the difference in the world.

If companies had to depend on traditional data analysis tools to utilize the generated data, costs would be untenable. Fortunately, there are also cloud tools and services that allow anyone to process, make sense of, and extract knowledge from Big Data. With these services, small companies can improve their processes and even have better profits over time.

If I were opening a small business today…

I would definitely jump on the cloud bandwagon. The simple reduction in costs that can be achieved by using cloud-based solutions can make a huge difference in the budget of a new company. If we add this to the fact that by using cloud solutions companies are able to start operating much more quickly, and add it to the possibility to scale operations as needed, it becomes obvious that cloud is the way to go.

The cares that must be taken when hiring cloud services are the same that would need to be taken with any regular IT provider: make sure you need what you are buying, that you are getting a good price, and that your expectations match the service level offered. Information about different providers is only a Google search away, so do some research. In terms of costs vs. benefits, however, there is no other way to go.

Author:Thoran Rodrigues
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How To Buy The Cloud

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Next month – all being well – the UK Cabinet Office will lift the lid on what form the UK public sector Cloud Computing strategy will take.

Notably absent from the national ICT strategy announced back in April, Cloud has not been forgotten, but the grandiose plans for an over-arching G-Cloud that were being formulated under the New Labour administration have been scaled down.
Exactly what form the revised Cloud thinking will take remains to be seen, but the broad sweep commitment to Cloud as a cost-effective, scalable delivery mechanism has been articulated by both Government CIO Joe Harley and his deputy Bill McCluggage as well as being cited by Prime Minister David Cameron and other members of the political establishment. So a continued identification of Cloud as the way ahead seems like a safe bet.

In the US, the Obama administration – when not having to wrestle with keeping the bailiffs from the door – has been an enthusiastic supporter of Cloud Computing – even if some of the more died-in=the-wool Federal CIOs were not quite as keen. But the Obama ‘Cloud First’ policy has put the US federal government sector on a clear path to mass adoption of Cloud technologies, hand-in-hand with data centre closures on a mass scale.

Such is the inevitably of the Cloud advance in the US that the TechAmerica Foundation, made up of Cloud providers and academics, has now issued a Cloud First Buyers Guide for Government to provide easy, best practice steps for procurement officers in the government community to purchase and deploy Cloud services and technologies.

In its preface to the Guide, the Foundation notes: “To spur government agencies to take advantage of the benefits that Cloud Computing enables, the Obama Administration has issued a Cloud First policy. This Buyer’s Guide is designed to assist government agencies as they evaluate and purchase Cloud services and solutions in response to that policy.”

While the specifics of the Buyers Guide are inevitably highly geared to US government structures. the basic principles at their heart are eminently replicable across other nations, including the UK.

Step One: Business case

The report begins by recommending the creation of a business case – which may seem unusual given the mandated nature of the Cloud First policy, but the business case is needed to establish priorities. The report notes:

“Defaulting to a particular Cloud deployment or service model rather than using agency performance objectives to define the approach will result in missed opportunities to benefit from available Cloud services. In making the transition to the Cloud…first focus on workloads and Cloud services and solutions that have already been widely deployed in the Cloud in the private sector and government.”

In other words, don’t stick the tried and tested (and failed) practice of reinventing the wheel at every given opportunity. The Foundation identifies three main categories of Cloud offering that have proven track records already:

  • Infrastructure as a Service e.g.: storage web hosting, and backup.
  • Platform as a Service e.g. database services, identity management services, security services, geospatial information systems and customised application in areas of IT management.
  • Software as a Service e.g. email, CRM, collaboration, payment processing, and service centres.

Step Two: Establish priorities

Next, map your priorities and map them against the technology solutions on offer. Everyone will have a different set of priorities that matters, but among the most common aspects to take into consideration are:

  • Automatic upgrades and patches
  • Collaboration
  • Compliance requirements
  • In-house development and customisation capabilities
  • Ease of use
  • Sustainability and energy considerations
  • Integration with existing systems
  • Interoperability and open source
  • Portability
  • Pricing
  • Scalability
  • Security
  • Transparency of provider performance


Step Three: Think about security

The inevitable objection raised in both private and public sectors is the bug bear of security. The Buyers Guide notes: “Cloud services are not inherently more or less secure than in-house IT implementations. In both cases, security depends on technology, policies, and practices. A robust implementation of Cloud services is capable of meeting a variety of security requirements.”

But it observes that what does change is the question of responsibility: “One of the differences between cloud and in-house IT implementations is the degree of control for who manages and controls the security processes. Agencies should focus on managing the agreements between the agency and provider to ensure that a consistent security posture is maintained independent of who is responsible for the various layers of the system.”

Step Four: Implementation considerations

These are essential if the essential principle of sharing resources is to be adopted successfully. To that end, procurement officers need to ask:

  • Is the Cloud service easy to configure?
  • Does the Cloud service exist elsewhere within government and can that service be shared elsewhere within government?
  • Does the Cloud service provider enable portability of user data through an effective combination of documents, tools, and support for agreed-upon industry standards and best practices?
  • Are there third-party solutions to provide access to the data in the Cloud service?
  • Will the Cloud service provider, the government body, or third party integrate Cloud applications with in-house applications to ensure seamless end-to-end processes?

Step Five: the RFP

The topics and sections of the traditional RFP still largely apply, including background descriptions about the provider, client references, startup and ongoing cost models, and required certifications, but it is important to streamline the RFP process to reflect the rapid deployment of Cloud services.

Step Six: Take advantage of government’s scale

Are there government-wide initiatives that can help on price or best practice?

Step Seven: Don’t forget the people aspect

The Guide warns: “Cloud technology will not deliver the desired return on investment without addressing the people and process issues that are needed to manage effective systems.”

Step Eight: Look for a common approach to supplier evaluation

The Guide urges: “Use a data- driven approach to evaluate Cloud offerings.”

Step Nine: It’s all in the timing

Consider various factors to determine when is right for you to make a move to the Cloud. Factors can include:

  • Need for legacy system replacement
  • New systems upgrades that will require additional ICT investment
  • A need for testing platforms to support new development
  • A desire to run a pilot project for a programme or initiative

Purchasing Cloud services is all too often approached as a difficult new practice, but the Buyers Guide concludes: “Although the shift to Cloud Computing raises new issues that must be considered, existing Federal government procurement practices are flexible enough to enable acquisition of the new capabilities.”

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The Future of VoIP

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Back in 1995, the first Voice over Internet Protocol (VoIP) calls were made between two PCs. At first, it was just a technological novelty but by 1998, VoIP had begun to establish itself as a means of providing low-cost long distance calls, carrying an estimated 1% of US phone traffic.

Jump forward ten years to 2008 and VoIP has revolutionised the way that residential and business communications are delivered. According to Infonetics, around 30% of all international telephone traffic is now carried as VoIP.

In the business world, VoIP has been the driving force behind a range of new options for business communications. Businesses looking to replace their existing telephone system will almost certainly examine a range of VoIP-capable PABXs. But for businesses of all sizes, there is now another option – hosted IP communications from a service provider.

At Nortel, we call this IP Powered Business, and it enables a consistent, fully-featured voice service to be delivered to end-users regardless of where they are; at a corporate headquarters or branch office, working at a customer site or at home. Because the service is delivered from high-availability, network-based softswitches, businesses have huge flexibility to add new users and new locations, to move users between locations and rapidly implement business continuity plans, which may require an entire workforce to relocate to temporary premises in the space of a few hours.

With the global recession beginning to bite, business users are also attracted by the commercial advantages of using a hosted IP communications service. They no longer need to buy, manage, maintain and upgrade their own PABX. Instead, a service provider can offer a range of service packages for a per-user, per month fee. Those packages will certainly include all the traditional business telephony features, such as call diversion and voice mail, but are also growing to include multimedia features such as presence, instant-messaging, click-to-call, video calling, video conferencing and collaboration.

End-users can choose to access the service via traditional telephone or via a PC client – or both. And with Fixed Mobile Convergence, end-users can move seamlessly between fixed and mobile phones, and between cellular and WiFi networks while maintaining the ability to access their complete range of services and content.

All this is available today – but coming in the near future will be a new level of integration between web-based applications and VoIP services. One example of this could be a lone-worker application, which displays the location and safety status of employees working alone, and which allows a supervisor to contact each employee on their mobile phone simply by clicking on that employee’s icon on a map screen.

Innovations in VoIP have not been limited to the business market. Home users have also participated in a phenomenal explosion of VoIP usage. As well as dedicated VoIP service providers such as Skype, we have also seen VoIP being embedded into Instant Messaging applications from Yahoo, Google and Microsoft as well as games consoles, enabling multi-player gamers to chat while playing over the broadband network. We’ve also seen the emergence of triple and quad-play service providers, such as Neuf-Cegetel in France, who have successfully won business from millions of homes by packaging broadband access, VoIP, TV and mobile services. At Nortel, we’ve termed this the IP Powered Home and it’s about to get even more exciting.

Coming soon will be new features, such as the ability to add telephony functions to IPTV. When you receive an incoming call at home, the TV will automatically pause the live broadcast you are watching, show details of the caller and allow you to accept the call or send it to voicemail simply by pressing a button on the remote control.

VoIP has come a long way, from its earliest incarnation as a technical curiosity for PC enthusiasts to the underlying technology for almost all new voice telephony networks today. As we begin to explore the opportunities for further integration between fixed, mobile and web-based services, we can expect to see a great deal more VoIP-oriented innovation in the months and years ahead.

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Trust in Cloud Computing Grows

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Nearly one in 10 organizations in the U.S. estimated they store more than $10 million worth of data in the cloud.

Semiconductor manufacturer AMD announced the results of a global research study on adoption, attitudes and approaches to cloud computing, surveying IT decision makers in public and private sector organizations across the United States, Europe and Asia-Pacific. The findings revealed global and regional trends in cloud computing adoption and usage, highlighting the importance of both infrastructure and workloads in considering a cloud computing model.

The survey found cloud computing is maturing rapidly, with 70 percent of respondents indicating they are either using or currently investigating cloud computing for remotely hosted applications or to store data. Of those organizations that have deployed cloud solutions, 60 percent reported that they are already seeing business value. Among current cloud users, 92 percent stated that infrastructure was an important part of their decision to move to a cloud computing model. As cloud adoption continues to increase, so does the value of the data that lives in the cloud.

Sixty-three percent of those using the cloud to host data estimated they store more than $250,000 worth of data in the cloud, and by evaluating this survey field alone as a sample of the industry at large, it can be estimated that billions of dollars in active data currently lives in the cloud.

“Based on the findings of this global study, AMD believes it is time for the industry to re-shape the way we think about cloud technology,” said Patrick Patla, general manager and vice president if AMD’s server and embedded divisions. “The findings point to the fact that while the era of cloud computing has arrived, there are radically different attitudes, approaches, concerns and levels of maturity depending on business environment.”

Ninety-two percent of respondents currently using the cloud stated that infrastructure was important in their decision to adopt cloud computing. Global private sector respondents also identified the workloads they believe most suited potentially for cloud computing as email, finance/accounting and Web serving, in that order. However, 63 percent of global respondents still view security as one of the greatest risks associated with the model.

For those currently using the cloud, 75 percent had the necessary IT skills to implement the solution versus only 39 percent of those who are currently investigating cloud today. Cloud users are able to access their services primarily via a PC (90 percent), followed by smartphone (56 percent), tablet (37 percent) and thin client (32 percent).

“As an industry, we must provide clear guidance about how to optimize hardware and software for all types of clouds, focusing on custom parts for specific workloads that are prevalent in the cloud and the appropriate balance of performance, power and cost efficiency they require,” Patla said.

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Cloud is Secure Enough for the Pentagon. Why Not You?

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I don’t typically read the Army Times, but a few days ago I ended up there while searching for info on the U.S. federal government’s adoption of cloud computing.

The page I landed on was all but astonishing. Army General Keith Alexander, commander of U.S. Cyber Command and director of the National Security Agency, was explaining why cloud computing is secure enough for the Department of Defense (DOD). Alexander was answering questions before a House Armed Services subcommittee about the $159 million 2012 budget request for the Cyber Command, a DOD agency charged with protecting the digital infrastructure that keeps military weapons and surveillance systems up and running.

Speaking before the House, Alexander said cloud computing provides the best way to secure DOD networks. Interestingly, he did not stress cloud computing’s ability to cut costs; rather, he emphasized its security benefits:

“This [cloud] architecture would seem at first glance to be vulnerable to insider threats—indeed, no system that human beings use can be made immune to abuse—but we are convinced the controls and tools that will be built into the cloud will ensure that people cannot see any data beyond what they need for their jobs and will be swiftly identified if they make unauthorized attempts to access data.”

This, surely, represents a tipping point.

If leaders of the U.S. military believe cloud computing is secure, then it might be time for civilian CIOs who have questioned the security capabilities of the cloud to reconsider.

After all, Alexander is not a technology vendor, nor is he a technology consultant, or even a politician. He is the director of the National Security Agency, responsible for ensuring that the backbone of the military defense system is reliable and secure. He has undoubtedly been better briefed on security concerns with cloud computing than have you and I.

His statements may be surprising, but they echo an ongoing transition in public-sector thinking about cloud computing. In the past year, the federal government has become increasingly supportive of the cloud, and has adopted cloud models for key agencies.

In early December, the General Services Administration selected Gmail for its 15,000 employees. Just a week later, the U.S. Department of Agriculture selected Microsoft’s cloud solution for communications and collaboration for its 120,000 users. In an even larger move, the Department of Veterans Affairs plans to adopt cloud-based e-mail for 600,000 employees.

This acceptance of cloud computing is a natural outgrowth of the Obama administration’s “cloud-first” policy that requires federal agencies to identify services that can be migrated to the cloud.

Federal Chief Information Officer Vivek Kundra, speaking at a National Institute of Standards and Technology (NIST) event last May, said security, data portability and interoperability are key to the future success of cloud computing. But these goals won’t be achieved without adoption of standards. He called for standards that will address issues around security and interoperability and “make sure that data portability allowing the customer to choose when to move from vendor A to vendor B is preserved.”

Momentum is building for cloud computing standards, and that’s a great thing because a lack of standards and interoperability can be a barrier for CIOs and IT departments. It’s safe to assume that the Pentagon fully investigated cloud architectures—standards and security—before entrusting the nation’s defense to a new technology.

And if cloud security is good enough for the DOD, it should be more than adequate for you and me.

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Let A Thousand ‘Clouds’ Bloom

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Cloud computing has been making headlines and generating buzz for the past several years. Companies such as Amazon, Google and Microsoft have all placed big bets on public clouds, while traditional enterprise companies such as IBM, HP and EMC are pushing private clouds.

The future may involve more than one cloud model, even for some of the largest and most staid corporations, but being able to juggle the advantages of each while minimizing risks such as security or the inability to freely move data will require some new ways of thinking about technology.

Forbes caught up with Howard Elias, president and COO of EMC’s Information Infrastructure and Cloud Services, to talk about what’s changing and why.

Forbes: We’ve been hearing about cloud computing for years. Have any of the drivers of this technology changed?
Howard Elias: No, the driver is a higher level of efficiency in utilizing compute, network and storage resources. There is more flexibility in the use of the infrastructure and much more business resiliency. The applications can be set up on an efficient infrastructure and moved around. We’re trying to take the next step to a hyper-cloud model.

What’s the difference?
The hyper-cloud approach allows companies to have their own private cloud, deploy their applications and be highly flexible and resilient, and then have a set of service providers that have their own clouds. Customers can move their data and workloads between them. They may decide a service provider has a better cost model or better expertise in a vertical industry. Or a customer may say that for 70% of the year they only need a certain amount of performance capacity in their infrastructure and they will just buy capacity as needed.

What you’re really selling there is flexibility, right?
It’s the efficiency and the flexibility. Ultimately our view of the cloud is moving IT from a discrete set of capabilities to becoming truly a service. The CIO is really providing IT as a service instead of a discrete set of applications and servers.

And they’re looking at the value of data rather than just warehousing it?
Absolutely. I refer to this as putting the ‘I’ back in ‘IT.’ For a long time CIOs have been spending way too much time and budget on the technology—making sure the technology is highly utilized, well integrated, operating at full capacity and full availability. That accounts for about 70% of the IT budget for most companies. Most of the budget should be spent on business and application innovation.

But to make that work you also need to understand what data is necessary to keep and where you need to keep it, right?
That’s correct. Companies have been dealing with a dramatic growth of information. On top of that we’ve seen an enormous increase from compliance. The big issues are how you manage it all and protect it properly, ensure compliance of that data, and how can you offload your primary production systems in terms of data that is not used very often. The industry provides a host of technology and services manage that information, move it to appropriate tiers of storage, back it up and archive it. It’s probably best to get your information architecture in order before you start down the road to the private cloud. You really need a solid game plan for information management first.

The second challenge is around security. How do you deal with that?
Companies today do a combination of managing applications, data and infrastructure inside of their data center. They work with partners that outsource it. This is really no different in the cloud world. You still need very solid processes and business practices. We have an umbrella in this industry we call GRC—governance, risk and compliance—whether it’s inside your firewall or outside.

Where does virtualization technology fit in?
It’s a movable layer that abstracts the application and data flows from the underlying infrastructure. That allows you to abstract to a logical view rather than being tied to a physical infrastructure. It’s the most flexible way to implement a cloud. In a virtual machine environment we can make it even more secure.

Why?
Because with physical infrastructure the only strategy is to build a wider and deeper moat around your corporation’s four walls. Information has to move and it has to move outside your company. But just as important, information risk occurs even inside your company. Just having a bigger and deeper moat doesn’t protect your data any better. There are still people with access to information. It’s a matter of what they can do with that information.

But there are also different layers of cloud technology, right? Google Chrome is a lot different than an EMC, IBM or HP enterprise cloud architecture.
Yes, and there are some applications for which Chrome may be suitable. For many enterprise applications it will not be appropriate.

Are companies confused about cloud technology?
I think the trend is now heading away from confusion. There has been a lot of information put out there over the past couple years. Google, Amazon and Microsoft are packaging up a set of services and offering that as a public cloud. For limited uses that makes sense. But there also are private clouds with resource pools and the ability to have IT providers as a service, and with today’s technology you can implement that inside your data center. You can deliver that same efficiency with control of your own environment—where you put it, when you put it there and how it gets operated—along with choice of vendors and what you want to do inside and outside.

The Internet turned enterprise security on its head with multiple ways in and out of the enterprise. Is that changing with cloud models?
If the world was completely open and there was no way to lock down your physical infrastructure the only way you could deal with that would be to encapsulate the information, authenticate the identity, and then limit what people can do to that information. Can they open it, read it, delete it, download it? At that point the information can flow anywhere, whether it’s into a cloud or out of cloud.

How far along are companies?
The business of running IT is already virtualized. Phase two is where you virtualize your business and mission-critical applications. This is where you get the more flexible management of those applications. Most companies are well into phase two of that journey. Phase three is IT as a service. You have a virtualized infrastructure, you’ve virtualized your business applications, and now you add a management and security model and automation and orchestration where you truly have automated, policy-based, flexible management of your IT infrastructure. That’s where you really get cloud-like operations in a private cloud and even in a public cloud.

Is there resistance to this? It makes a lot of IT jobs obsolete?
That has been a concern inside some organizations. But this is no different than any other technology shift. On one hand it can be seen as a challenge to IT careers. On the other hand, it’s an opportunity. Inside our own IT department we’ve created new positions like data center architect or cloud architect. It’s no longer just managing a silo of storage. It’s thinking about it at higher levels.

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The Economics of Desktop Virtualization

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With Thanksgiving and Christmas behind us and the New Year upon us, it is time to take stock and see what changed for desktop virtualization in 2010.

One thing is very clear: We have moved from desktop virtualization being ‘about to take off’ to ‘has taken off’ — the evidence for this is pretty clear in the number of licenses sold. With volumes sold in the low millions, desktop virtualization is way beyond the tryout and pilot stage. However, desktop virtualization is not yet for every user. There are a number of areas where it’s still not a good fit.

For example, a user who does not always have access to the Internet from his or her laptop may not be able to use a hosted virtual desktop. This is a problem that will be addressed by client hypervisors in coming years. These provide the management benefits of desktop virtualization to the intermittently connected user. For now, they are very new but will become critical for mobile workers and may also have a major role to play in bringing down the costs of desktop virtualization for non-mobile users as well.

Of perhaps more concern is the question of the economic basis for hosted virtual desktops. This has recently become more visible thanks to Microsoft’s paper ‘VDI TCO Analysis for Office Worker Environments,’ which compares the total cost of ownership of traditional PCs and their virtual desktop alternatives. Their conclusion is that hosted virtual desktops are more expensive to deliver than a traditional, well-managed PC. There are a number of interesting points and conclusions to draw from this document.

Firstly, Microsoft compares virtual desktop infrastructure (VDI) against a ‘well managed PC.’ This is a key phrase for those of us who work with industry analysts. It means far more than just having policies and necessary technologies in place: It assumes that the PC is locked down to the extent that users can make no changes to the configuration of the machine, including being able to install applications. While this is the most cost effective and secure way to manage a PC, it is not a good solution for many users; either they culturally expect to be able to adapt ‘their’ PC as they see fit or they actually need to be able to install applications beyond those provided by IT.

Secondly, the target user base is an ‘Office Worker’ – the most general and easily standardized user. As with any new technology, it will not be right for everyone from the get go. General office worker’s are not the most appropriate target for desktop virtualization at the moment, partly for the economic reasons that Microsoft sets out. In the case of desktop virtualization the ideal users today are those who are expensive to manage conventionally. These may small groups of users in remote locations or those with pressing security requirements. In the case of the remote user groups, significant savings can come from the reduction in desk-side support that can be made by centralizing execution. Security benefits are always hard to quantify, but being able to keep all data within the data center by centralizing execution and delivering only a display feed to the user can be critical for some government, finance and healthcare projects.

Thirdly, while the report shows that hosted desktop virtualization is more expensive than a traditional PC, the reason that it is more expensive is due to higher software licensing costs in desktop virtualization — principally Microsoft software licenses. In other words, they are both showing that desktop virtualization is more expensive and that they have control of this price difference. When and if Microsoft decides that it is in their interest to change the economics of hosted virtual desktops, then they can flip the switch and change the game.

Whichever way round this plays out looks good for desktop virtualization: Either hosted becomes cheaper or the swing to client hypervisors is faster. This is gratifying to see in light of all the work currently going into early implementations — the work will not be wasted.

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