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Cloud Computing Versus SaaS

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As our world becomes more and more connected, the terms used to describe online services blur into abstraction. In this article, I’ll clarify the terms “cloud computing” versus “software as a service,” often referred to as SaaS. In some ways, it’s like describing two sides of the same coin. However, there are some clear distinctions, along with risks and rewards to keep in mind.

The Internet is increasingly being referred to as the cloud. One of the earliest mentions of cloud computing is in the paper The Self-governing Internet: Coordination by Design published by MIT Professors Sharon Eisner Gillett and Mitchell Kapor in 1996. Readers of a certain age will remember one of Kapor’s other ideas, a product called Lotus 1-2-3. Regardless, historically the central computers that run the nation’s telephone network were often diagrammed on flowcharts as a cloud. The intricacies of networked computers that comprise the Internet are so complex that the term has been co-opted for use in our modern society.

In the early days of computers, users rented time on a mainframe computer. A few decades later, we all became accustomed to having our own personal computers on our desk, upon which we installed shrink-wrapped software. We became responsible for upgrading our computers, software, and backing up our data. As often happens in life, though, things are going full circle where we’re returning to the days of renting time on someone else’s computer. Instead of a single mainframe computer though, today we may utilize a bank of computers residing in a data center in an undisclosed location. Instead of being relegated to working only at our desk, today we often use mobile devices to carry out tasks unimaginable just a few years ago.

In general, cloud computing can be thought of as any instance where you’re using a computer that resides outside of your physical location. Most users encounter cloud computing in the form of software as a service. You might pay a fee for the service, such as QuickBooks Online, Salesforce.com, or Microsoft’s Office 365, or you may pay in a nonmonetary fashion through an advertising-supported and/or information-gathering models, such as Gmail, Mint, or Facebook.

With all of these applications, you’re relying on software installed and maintained on remote computers. Most often SaaS is delivered via your web browser, so long as you have a connection to the Internet, you’re able to carry out tasks that may be business or personal in nature. With this background in mind, I can provide some distinctions between cloud computing and software as a service:

  • Cloud computing gives you access to an environment that you can customize or build out to suit your needs. With SaaS, you’re limited to the features and capabilities written into the software, but cloud computing offers the ability to increase server capacity or storage space on demand.
  • Cloud computing offers elasticity, meaning your resources and costs can increase or decrease with your demands. SaaS typically involves a set fee per user, per month, so costs and the functionality offered tend to be fixed.
  • In short, cloud computing is highly customizable, whereas SaaS offers more of one-size-fits-all approach.

Some examples of what may be considered pure cloud computing include:

  • Amazon Simple Storage Service (Amazon S3) – This service allows you to store and retrieve an unlimited amount of data, at anytime of day, from any computer connected to the Internet.
  • Microsoft’s Windows Azure – This service provides virtual servers that can be used for application development and delivery.
  • Rackspace.com — Similar to Windows Azure, Rackspace.com provides servers for hire, but with a wider array of operating systems to choose from.

A primary benefit to cloud computing is that users outsource the care and maintenance of servers to firms that specialize in that capability. When demand warrants, new servers can be brought online in minutes, rather than the days required when a company maintains its own data center. Any sort of computer-based application can be hosted on cloud-based computers, from a website or shopping cart to custom programs for internal use. Thus, with cloud computing, the user is generally responsible for maintaining the applications on the server, while the hosting companies maintain the underlying physical equipment and operating system.

For SaaS, end users are removed from maintaining both the application and the server equipment. Benefits of SaaS versus desktop programs include:

  • Applications, such as QuickBooks Online, allow you to access accounting records from anywhere in the world, instead of from specific computers within your office.
  • New features appear in the software automatically, so there’s no need to purchase a software upgrade to be physically installed on each of your computers.
  • Your data is backed up automatically, so a local hard drive crash won’t affect your data.

Despite all of the benefits that cloud computing and SaaS provide, there are still risks to consider and manage:

  • Consider the recent situation with megaupload.com, where certain purported illegal actions by a subset of users caused everyone using the service to lose access to data. Think about a toddler having a certain bodily function in a public swimming pool – everyone has to suddenly get out of the water. Similarly, actions by one or more rogue users can cause unexpected and dramatic disruptions for everyone else sharing a cloud-based resource.
  • Both cloud computing and SaaS involve trust, in that you’re trusting an organization to hold up its end of the bargain. Intuit, maker of QuickBooks, last year experienced a spate of outages that caused business interruptions for users of their myriad online services.
  • A service you trust and rely on could suddenly change hands, such as Facebook’s recent acquisition of Instagram. You may then be forced to find a new service provider if you have philosophical differences with the new owner of a tool that you’ve relied on or if customer service levels start to slip to unacceptable levels.
  • If you stop paying for the service, access to your data can be immediately terminated. However, many providers offer a grace period. For instance, if you cancel your QuickBooks Online account, your data is maintained for a year, should you decide to resubscribe to the service.

Author: David H. Ringstrom, CPA
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Pros And Cons Of The Cloud

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When you talk to a bona fide Cloud supplier they talk in the straight-forward, clear and non-technical way about the business benefits of Cloud computing. However, in the same way that two hundred jumbo jets landing safely at Heathrow is not news but one jumbo jet crashing is news, Cloud makes the headlines when it fails and for those who over-complicate it.

Cloud computing provides organisations with an alternative way of obtaining IT services and offers many benefits including increased flexibility as well as cost reduction. However many organisations are reluctant to adopt the Cloud because of concerns over information security and a loss of control over the way IT service is delivered. These fears have been exacerbated by recent events reported in the press including outages by Amazon and the three-day loss of Blackberry services from RIM. So what approach can an organisation take to ensure that the benefits of the Cloud outweigh the risks?

Before we de-mystify Cloud computing let’s define it.

Different people interpret cloud computing differently so let’s settle on the National Institute of Standards and Technology(NIST SP800-145) definition as the best one: “Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of:

* Five essential characteristics (on demand self service, broad network access, resource pooling, rapid elasticity, measured service),
* Three service models (IaaS, PaaS, SaaS), and
* Four deployment models (public, private, hybrid, community).”
* Measured service (cloud systems automatically control and optimize resource use by leveraging a metering capability. Resource usage can be monitored, controlled, and reported to provide transparency).

What makes Cloud computing so compelling to those who use it?

• Confidentiality— Cloud computing solutions provide powerful authentication and authorisation layers. Ironically, since these solutions are used by lots of different organisations the cloud solutions are more secure. The applications which are developed by a company on top of the infrastructure or platform remain the responsibility of the company.
• Privacy- Cloud computing solutions provide good protection for sensitive information
• Integrity—Cloud computing solutions provide similar protection of integer data.
• Availability—Cloud computing suppliers produce the infrastructure and bandwidth to give companies real high speed access, storage and applications. All organisations should still ensure that they have made arrangements for outages. Cloud computing even allows more reliable backup and recovery.
• Resiliency—Cloud providers have disaster recovery equipment to ensure that you will survive untouched by any type of negative event.
• Compliance—Every company has to comply with a huge range of laws, regulations and standards. If data is demanded by the authorities, cloud computing service providers can provide this without compromising any other information.
• Licensing—Cloud computing allows companies to only use those licenses needed at a specific point in time removing any concerns about using illegal software.
• Reliability—Cloud computing provides solutions where people are.
• Transparency—Cloud computing service providers can demonstrate the existence of effective and robust security controls, assuring companies their information is properly secured against unauthorised access, change and destruction.
• Monitoring—Measurable and transparent monitoring is provided by default by solution providers to companies.
• Integration—Cloud computing solutions provide the missing links to integrate with existing internal solutions.
• Network centric—Cloud computing solutions are, by default, offered via the network.
• Certification—Cloud computing service providers can provide proper assurance that they are doing the “right” things. Independent assurance from third-party audits and/or service auditor reports is a vital part of any service provider assurance program.

What added-value?

Cloud computing offers organisations the ability to scale without large financial commitments upfront for infrastructure acquisition and maintenance. Capital expenditure with cloud computing is much lower since services and storage are available on demand and are priced as a pay-as-you-go service. Capital expenditure is largely replaced with operational expenditure. Savings on unused server space and licenses also allow companies to contain costs.

Cloud provides on-demand convenience which is a core added value for many companies since they can unilaterally provision computing capabilities as needed automatically without requiring human interaction with cloud services providers. Cloud services offer both increased flexibility and scalability for the evolving IT needs of companies, allowing for traffic spikes and reducing the time to implement new services whilst increasing innovation.

Companies can also focus on their core business, rather than be concerned about solving peak business demands for performance. One of the major added value impacts of cloud computing is that the business is back in control over its solutions. Business departments can find their own solutions online and decide themselves if they go ahead or not without the intervention of others.

Cloud services allow organisations to better use existing infrastructures and increase productivity and transform business processes using methods that were prohibitively expensive before the cloud. Cloud computing allows business departments to detach their IT needs from their infrastructure and allows data to be stored in a centralised easily accessible manner which the user finds easier. Of course, virtualisation has made it impossible to physically pinpoint the exact physical disc where data is stored.

Instead of extensive discussions, analysis and lots of people involved in developing and testing applications and data solutions, business units are able to activate and use practical solutions in days. This has a fundamental impact on the agility of a business and the reduction of costs associated with time delays. One of the cornerstones of cloud computing is that it can automatically control and optimise resource use by leveraging a metering capability appropriate to the type of service. Resource usage can be monitored, controlled, and reported providing transparency for both the provider and company of the used service.

Another added value of cloud computing is less energy usage and using existing energy at the cloud computing service provider, which might have different locations and choose where energy is cheapest to buy. Re-allocating IT operational activities to cloud computing offers companies the opportunity to focus on innovation and research and development. This allows for growth.

The key premise of the cloud is that by outsourcing portions of information management and IT operations, enterprise workers will be free to improve processes, increase productivity and innovate while the cloud provider handles operational activity smarter, faster and cheaper. Assuming this to be the case, significant changes to the existing business processes will likely be required to take advantage of the opportunities that cloud services offer.

When moving to the Cloud it is important that the business requirements for the move are understood and that the Cloud service is selected meets these needs. Taking a good governance approach, such as COBIT1, is the key to safely embracing the Cloud and the benefits that it provides without fear and with many advantages as I hope I have demonstrated.

Author: Constantine Galonis
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How Cloud Computing Will Change IT

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If you came here for the article with the title, “How Cloud Computing Will Change IT”, unfortunately, it has been removed at the request of the publisher of the website from which it was obtained.

Asking me to remove it was within their rights, but I believe it was a shortsighted decision based on old media ideas about the copyright “protection” of assets and the imagined potential loss of ad revenue.

I am not competing with the publisher of “How Cloud Computing Will Change IT”. The articles here are gathered for the benefit of my clients and prospects who are trying to make a decision about cloud computing in their business. There are no competing ads here.

By asking me to remove “How Cloud Computing Will Change IT”, the publisher lessened the opportunity for the author to have his ideas more widely read and the publishing website lost the long term SEO benefit of the link from this page that was here to acknowledge the source of “How Cloud Computing Will Change IT”.

I invite you to check out these links to articles with information similar to “How Cloud Computing Will Change IT”

Zynga’s Cloud Computing Advantage

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Zynga was created in 2007 with the idea that “play — like search, share and shop — would become one of the core activities on the internet.”

Just 5 years later, the company has about 150 million monthly unique users in 166 countries, and has just filed for what could become one of the most important IPOs of 2011.

There’s little doubt that Zynga is one of the fastest and most interesting growth stories on the Internet, and it may be interesting to analyze how the company succeeded in supporting its customers’ strong demand while keeping a flexible and cost conscious architecture.

The answer, predictably, is cloud computing. Here is how Zynga describes its infrastructure in its IPO filing:

“Our games run on a complex distributed system, or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated by third parties that we do not control and which would require significant time to replace. We expect this dependence on third parties to continue. In particular, a significant majority of our game traffic is hosted by Amazon Web Services, or AWS, which service uses multiple locations.

We have invested extensively in developing proprietary technology to support the growth of our business. We have created a scalable cloud-based server and network infrastructure that enables us to deliver games to millions of players simultaneously with high levels of performance and reliability.

Our physical network infrastructure utilizes a mixture of our own datacenters and public cloud datacenters linked with high-speed networking. We utilize commodity hardware, and our architecture is designed for high availability and fault tolerance while accommodating the demands of social game play.

We have developed our architecture to work effectively in a flexible cloud environment that has a high degree of elasticity. For example, our automatic provisioning tools have enabled us to add up to 1,000 servers in a 24-hour period in response to game demand.

We intend to invest in and use more of our own infrastructure going forward, which we believe will provide us with an even better cost profile and position us to further drive operating leverage.”

Derrick Harris, at GigaOM, has an interesting commentary on Zynga’s approach to the cloud:

“Zynga has been touting its Z Cloud infrastructure for more than a year, which reverses the conventional approach to hybrid cloud computing. Whereas many analysts initially assumed companies would use private clouds as a gateway to public clouds, Zynga uses Amazon EC2 as a staging ground before ultimately moving games onto private cloud resources. Essentially, Amazon’s cloud lets Zynga scale elastically and determine average traffic load and other metrics, so that it can optimize its internal infrastructure for each game’s specific needs.

The goal of this strategy is efficiency: Zynga doesn’t have to invest in more resources than necessary upfront, nor does it have to worry about underprovisioning resources or otherwise inadequately configuring them when it brings games onto its private cloud. In many cases, private clouds can cost less than public clouds for applications with fairly stable usage patterns, and they help companies meet various requirements around security and compliance. Zynga uses Cloud.com for its private cloud infrastructure, as well as RightScale as a management layer that makes for a uniform experience in terms of managing both public and private resources.”

Zynga’s architecture is also build about close proximity to its main partner, Facebook.

According to peeringDB, Zynga’s main peering points in the US are located in several Equinix data centers on the East and West Coast of the USA (Ashburn and S. Jose/Sunnyvale, respectively).

According to industry sources, and as reported by Data Center Knowledge, Zynga is also leasing wholesale data center space from Digital Realty and Dupont Fabros Technology.

Zynga was also the subject of an interesting mention, during Equinix’s analyst meeting, made by Pete Ferris, the company’s Chief Sales Officer.

“Since the beginning, Zynga had very clear that, in order to succeed in its effort to “sell virtual pigs” to customers, it needed to reach the widest audience possible and make the gaming experience as pleasant as possible – in other words, supporting strong growth (reaching the largest possible number of lurkers) was key to the potential success of the company.

In order to make it possible, Zynga had to look for the right partners, infrastructure providers like Equinix and Amazon that had the financial strength to keep growing their data center resources and support the company’s potential strong growth requirements. In Equinix’s case, Zynga’s main partner was just a cross connect away, and the facilities also offered the largest number of US networks and ISPs to connect to, with the added opportunity to reach the most important Asian (on the West Coast) and European (on the East Coast) providers. Networking and growth problems solved, with just one provider.”

Zynga is a very interesting success story on its own, but it may also be analyzed to support the investing theory that there are some key infrastructure providers to these stories (both very successful or not) that will keep benefiting from the growth of the Internet.

These companies will also, most probably, be able to use their “first mover” advantage to strengthen their leadership, as they leverage their magnetic influence in the market to become the “place to be” for most new start ups, among which you’ll probably find the next Zynga, but that will all contribute to these providers’ revenues and profits.

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The Economic Benefits of Cloud Computing

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As the cloud paradigm matures it is becoming increasingly well understood that companies and organisations of all sizes – from the smallest SME to the largest enterprise or public agency – can realise highly compelling economic benefits by adopting cloud computing solutions. In fact few could now credibly argue that emergence of the cloud model is not profoundly and fundamentally changing the economics of IT.

At a macroeconomic level the Centre for Economics and Business Research (CEBR) predicted in February 2011 that cloud computing could inject some €763bn (£670bn) into the major economies of the European Union over the next five years, with the UK reaping an estimated €30bn over the period. CEBR’s Cloud Dividend report identified the cost savings (CAPEX and OPEX) made by companies adopting cloud computing services and measured these against macro and business variables such as business development opportunities; business creation; indirect gross value added (GVA); tax contributions; as well as expenditure on cloud services to estimate the Euro value of the technology in each country.

Elastic consumption, elimination of CAPEX and improvements in agility

The cloud technology model allows organisations to standardise and pool IT resources and automates many of the maintenance tasks done manually today. Cloud architectures facilitate multiple benefits including elastic consumption, elimination (or at the very least a dramatic reduction) of capital expenditure, self-service, and pay-as-you-go pricing.

In most cases migrating to the cloud eliminates CAPEX and replaces these major up-front costs with predictable and manageable OPEX. This transition is crucial as it lowers the risk associated with strategic IT projects, so keeping business agile by allowing for more experimentation and entrepreneurship.

The elasticity offered by the cloud model means that organisations can take on computing projects that would have been completely beyond the capabilities of their in-house IT resources. Cloud means that it is possible to scale up and scale down resource intensity nearly instantly so organisations only pay for the computing power they actually need.

In this world of cloud computing the value-add delivered by IT through enhanced technical capability and improvements in staff productivity derived from providing “always on” fixed or mobile access to central cloud-based business applications can be significant. However, the scale of these potential economic benefits is only just beginning to be understood by business and technical decision makers.


Leveraging cloud economies of scale

Rolf Harms, director, Corporate Strategy Group at Microsoft, noted that many firms are only just waking up to the fact that cloud computing can slash IT costs.

“Our analysis uncovers economies of scale for cloud that are much greater than commonly thought. We believe that large clouds could one day deliver computing power at up to 80 per cent lower cost than small clouds. This is due to the combined effects of three factors: supply-side economies of scale, which allow large clouds to purchase and operate infrastructure cheaper; demand-side economies of scale, which allow large clouds to run that infrastructure more efficiently by pooling users; and multi-tenancy, which allows users to share an application, splitting the cost of managing that application,” Harms explained.

“We believe the best way to form this vision is to understand the underlying economics driving this long-term trend. We’ve done extensive analysis of these economics in Microsoft’s Corporate Strategy Group, leveraging Microsoft’s experience with cloud services like Windows Azure, Office 365, Windows Live, and Bing.”

A Microsoft research report, published in November 2010 entitled The Economics of the Cloud, reiterates this view that cloud is having a profoundly beneficial impact on the economics of IT for companies of all sizes.


Technology promoting innovation

“The economics will have a profound impact on IT. Many IT leaders today are faced with the problem that 80 per cent of the budget is spent on keeping the lights on – maintaining existing services and infrastructure. This leaves few resources available for innovation or addressing the never-ending queue of new business and user requests. Cloud computing will free up significant resources that can be redirected to innovation,” the report noted.

“Demand for general-purpose technologies like IT has historically proven to be very price elastic. Thus, many IT projects that previously were cost prohibitive will now become viable thanks to cloud economics. However, lower TCO is only one of the key drivers that will lead to a renewed level of innovation within IT.”

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Justifying Your HPC Cloud Investment

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High-performance computing (HPC) is no longer exclusive to large companies and governments with substantial scientific budgets. Why? The economics of HPC cloud computing bring these capabilities within reach of nearly any business. However, infrastructure and operations (I&O) professionals must realise that the level of ROI varies based on application design, behaviour and use case. Cloud economics let companies pay for capacity when and only when it is utilised, without requiring any upfront investment – essentially eliminating the barrier to entry to HPC.

In most HPC projects, the more compute power you can throw at a problem, the faster the result can be attained. As a result, traditional HPC deployments require substantial upfront and ongoing investments. Cloud computing environments, however, make huge quantities of compute capacity available to you at affordable per-hour rates. And its economic model encourages use of more resources per hour than fewer resources over more hours – a direct hit on the needs of HPC workloads.
Do the economics add up?

Not all HPC workloads can activate cloud economics. Through our examination of more than 30 use cases of enterprise HPC cloud computing deployments and countless inquiries with Forrester clients, it is clear that the ROI of cloud for HPC is heavily dependent on how your application scales and how rapidly you can enter and leave the cloud.

ROI will be heavily influenced by these two application characteristics:

• Transiency: how long will you need the cloud? One of the key differentiators of infrastructure as a service (IaaS) and platform as a service (PaaS) cloud computing is that its cost model replaces long-term contracts with pay-per-use costing. If you plan to deploy an application that is only needed for a short period, put it on the cloud, because once the application’s life has ended or its run has completed, it stops paying for the infrastructure supporting it. But if you stay in the cloud too long, it will cost you more than traditional hosting options. Like other transient services, such as hotel rooms or rental cars, the per-hour rate of cloud platforms is higher for full use throughout the month because it is priced to encourage you to leave.

• Elasticity: the more the application scales, the better the ROI. The power of cloud economics pays off best with applications can scale out massively and then scale back down to zero. This means workloads that use a lot of parallel processing where work elements can operate independently of each other yet all be working on parts of a big problem fit best. Not all HPC workloads function this way and therefore cannot cleanly take advantage of IaaS cloud environments. You might be able to rearchitect your HPC applications so they behave this way. The key is to get the application to scale out via load-balancing or grid architectures and be as modular as possible to maximise scaling elasticity.

Not every HPC project is cloud-appropriate

Cloud computing is not a fit for all HPC workloads. Some are tied to unique hardware architectures or use cluster technologies that require their own hardware or fixed configurations. Others are very sensitive to latency or cannot scale out because of architectural design.

For these reasons, cloud platforms are not the end game, replacing all IT infrastructure that has come before them: they are simply new deployment options that bring economics suited to a subset of use cases. In other words, think of IaaS as a new deployment instrument in the IT toolbox (see figure). To cost-optimise investments, I&O professionals should think about their infrastructure options as three buckets and assign applications based on their resource needs profiles:

• Applications that require dedicated physical resources justify capital expenditures. An application may require its own dedicated hardware because of application design, hardware dependencies such as needing graphics processing units, being sensitive to configuration changes, or demanding dedicated, high-performance networking. Applications with these dependencies may warrant a hardware capital investment (or a software redesign).

• Applications that do not consume the full capacity of hardware should be virtualised. Kind of a no-brainer in 2010, but have you taken this strategy to its full conclusion with HPC workloads? Keep pushing this strategy, because maximising capital asset utilisation accelerates its ROI. If you have outsourced these applications, make sure the resource consumption pattern and lifespan of these applications justify the 12-month minimum contract of traditional hosting.

• Applications whose architectures are elastic should be considered for the cloud. It behoves you to cost-optimise your HPC application by placing it on a pay-per-use platform if: 1) it fits into a virtual machine environment or can be deployed atop an abstracted middleware platform; 2) it can scale out dynamically; and 3) it has loose coupling between compute nodes and storage (nodes act independently or are tolerant of high network latencies).

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5 Most Surprising Things about the Cloud in 2010

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2010 was the year “cloud computing” became colloquialized to just “cloud,” and everyone realized “cloud,” “SAAS” and all the other xAAS’s (PAAS, IAAS, DAAS) were all different implementations of the same idea — a set of computing services available online that can expand or contract according to need.

Not all the confusion has been cleared up, of course. But seeing specific services offered by Amazon, Microsoft, Oracle, Citrix, VMware and a host of other companies gave many people in IT a more concrete idea of what “the cloud” actually is.

What were the five things even experienced IT managers learned about cloud computing during 2010 that weren’t completely clear before? Here’s my list.

1. “External” and “Internal” Clouds Aren’t All That Different

At the beginning of 2010 the most common cloud question was whether clouds should be built inside the firewall or hired from outside.

Since the same corporate data and applications are involved — whether they live on servers inside the firewall, live in the cloud or burst out of the firewall into the cloud during periods of peak demand — the company owning the data faces the same risk.

So many more companies are building “hybrid” clouds than solely internal or external, according to Gartner virtualization guru Chris Wolf, that “hybrid” is becoming more the norm than either of the other two.

“With internal clouds you get a certain amount of benefit from resource sharing and efficiency, but you don’t get the elasticity that’s the real selling point for cloud,” Wolf told CIO.com earlier this year.

2. What Are Clouds Made of? Other Clouds.

During 2010, many cloud computing companies downplayed the role of virtualization in cloud computing as a way of minimizing the impact of VMware’s pitch for end-to-end cloud-computing vision — in which enterprises build virtual-server infrastructures to support cloud-based resource-sharing and management inside the firewall, then expand outside.

Pure-play cloud providers, by contrast, offer applications, storage, compute power or other at-will increases in capacity through an Internet connection without requiring a virtual-server infrastructure inside the enterprise.

Both, by definition, are virtualized, analysts agree, not only because they satisfy a computer-scientific definition, but because they are almost always built on data-centers, hosted infrastructures, virtual-server-farms or even complete cloud services provided by other companies.

3. “Clouds” Don’t Free IT from Nuts and Bolts

Cloud computing is supposed to abstract sophisticated IT services so far from the hardware and software running them that end users may not know who owns or maintains the servers on which their applications run.

That doesn’t mean the people running the servers don’t have to know their business, according to Bob Laliberte, analyst at the Enterprise Strategy Group. If anything, supporting clouds means making the servers, storage, networks and applications faster and more stable, with less jitter and lag than ever before, according to Vince DiMemmo, general manager of cloud and IT services at infrastructure and data-center services provider Equinix.

Without bulletproof infrastructure, cloud computing is slow, he says, and end users won’t accept slow.

4. Tiny Things Make Big Differences

Virtualization enables many applications and operating systems to run on the same piece of hardware while thinking they each own the server themselves. The problem with that, according to IDC analyst Gary Chen, is that they all think they have the network interface and input/output bus to the processor to themselves, too.

On a server with a lot of guest OSes, the bottleneck to performance is no longer the speed with which data can move back and forth between the server and external storage; it’s the number of bits that can go through the data bus at one time, he says.

That’s one reason Virtual I/O is becoming a hotter topic, leading to what Forrester analyst John Rymer calls “distributed virtualization” — in which I/O, memory and other components are abstracted from each other as well as the guest OSes, and the definition of “server” changes to mean whatever resources an application needs right now.

5. “Year of Virtual Desktop, Wasn’t”

2010 was supposed to be the Year of the Virtual Desktop, as Microsoft, Citrix and VMware all competed to capture what analysts expected to be a wave of adoption from end-user companies.

Virtual desktops were a hot topic in 2010, but growth wasn’t nearly as big as analysts or vendors expected.

Instead of standardizing on virtual desktops and moving all their users immediately to make migration to Windows 7 easier, most companies adopted one of an increasing number of flavors of the technology, but only in places where it made most sense.

“We’re seeing a lot of tactical projects, but not a lot of strategic ones,” according to IDC analyst Ian Song.

That’s not to say there wasn’t a lot of growth or adoption of even DAAS versions. But 2010 was no tidal wave, Song says.

The two biggest reasons, he says, were the complexity and comparatively low ROI of desktop virtualization compared to virtual servers.

Another was the increasing focus even inside the enterprise of tablets, smartphones and other non-PC devices that have to be virtualized to become secure, reliable clients for enterprise applications.

“We’re expecting to hear a lot about that from Citrix and VMware and a lot of the phone companies after the first of the year,” Song says. “It’s going to be big.”

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