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The Intelligent Network At The Heart Of Cloud Computing

The emergence of new media (such as Twitter, Facebook, LinkedIn, Flickr, YouTube and even the virtual world of Second Life) is spelling new challenges for businesses. They have widened the scope for consumers to air their fury against any product imperfections or service inefficiencies they experience. They have in fact become a potent weapon like no other as the damage is instantaneous and global.

Companies have to deal with them with a sense of urgency, as FedEx discovered recently. A video of a FedEx courier throwing a monitor over the fence of a customer location went viral on YouTube. FedEx reacted immediately with an apology, explaining that it went against its values.

Significantly, FedEx started circulating among its staff the video that brought it disrepute as a learning tool to improve service and win customer trust. Other actions were also initiated as the company sought to convey the message that the incident should not be taken as being representative of its 290,000 professionals worldwide. The customer who triggered it all and made FedEx react with a sense of urgency was satisfied with the response.

Consumers waste no time in blogging/tweeting about their experiences with the products they use or the services they get. Such is the power of social networking that the damage from any misadventure, perceived or real, is instantaneous.

On the brighter side, with the right social media strategies, as this FedEx example demonstrates, enterprises can turn even negative publicity to positive mileage provided they respond to it effectively and without any vacillation.

The Cloud and a Thinking Network

A new-generation network that thinks can enable businesses to catch potential minefields quickly and facilitating a prompt human, corporate intervention to stem any negative fallout with a reaction that is immediate. That is a reflection of the times where information is king and the speed with which it is delivered, with intelligent connectivity at its core, determines where you are headed.

Amid this market imperative, social networking sites have combined with cloud computing to open the floodgates for tech-savvy consumers to go online, connect with people and make communications direct and raw with a phenomenal global reach. Not just the cloud and the social Web, even Unified Communications and collaboration, along with the need for enhanced security and sustainability, give greater relevance to intelligent networking.

Businesses have generally embraced this trend and built the social media into their marketing portfolio as they are aware of the fact that this is the path to move forward and be a part of the technology evolution.

Multi-dimensional efficiencies and the Four Seasons Example: Clearly, current user demands have made the network go beyond easy connectivity and deliver multi-dimensional efficiencies with embedded intelligence.

With personal multimedia devices getting smart and everything from power grids to even entire cities turning intelligent, the network assumes a critical role in enabling it all. Traffic has to be prioritized, the quality of service enhanced and reliability ensured while factoring in scalability and providing a sturdy defense against the unleashing of malware by hackers. With a smart network, all of these translate to a good quality of experience for users.

User experience and comments can only be dismissed by companies at their own peril. Some big chains have even enhanced their corporate websites by incorporating user comments into them. The Four Seasons hotel did this earlier this year by giving space for customer reviews, with links to external content.

That is a demonstration of more than how it values the feedback of its patrons. A thinking network and a corporate culture that places greater emphasis on customer feedback in a new-generation milieu than ever before have begun to play a key role in enabling business success.

Connect, Communicate and Conquer

Connectivity and communications, driven by networking technologies and social media sites, are revolutionizing the way people live, learn, play and work. Significantly, mobile innovations such as the iPad have resulted in a wave that has wound its way into the corporate domain as well.

This is evident in the exponential growth seen in the number of personal multimedia devices (smartphones, tablets, etc) being used by employees to access corporate networks even while the death knell is being sounded in some quarters for the PC.

A research reports that around one trillion devices will be connected to the network by 2013. If that crystallizes, the result will be a mind-boggling scenario that businesses will find it difficult to measure up to with a dumb network.

As Bring Your Own Devices (BYOD) catches on in offices , the pressure on the network is bound to mount, throwing complications in its wake with a possible impact on security and performance. Throw the surging mobile video traffic into the equation and the result is a scary picture of technological intricacies and security risks.

Interestingly, countries such as India and China that were slow to embrace technology initially have leapfrogged trends and a recent BT study shows them being more open on BYOD adoption than even Singapore.

Security and Sustainability: In fact, it is an intelligent network that is at the heart of most new trends, including cloud computing. With a network that embeds intelligence, firms will be able to gauge what kind of traffic is running over it so they can use bandwidth intelligently and prioritize traffic. They can determine how secure the network is from cyber-attacks.

It also enables sustainability with focus on environment friendliness. You can even enhance business processes and be ready for emerging trends and challenges – such as IPv6. An intelligent network has the ability to let enterprises transform their businesses, without any compromise on reliability, high availability and flexibility! It will require less human intervention than ever before to deal with evolving changes or security threats.

Assess Your Network: It is important to note that significant cost savings can be realized with the right technological investments. Businesses can start with an assessment of their networks. This will equip them with a good understanding of any underlying issues and requirements to overcome them.

An independent assessment from a managed services provider can provide enterprises with a rating of the level of maturity of their network and identify a road-map for evolution based on gaps between their current and desired future states.

Asian Century: Not just companies, even countries, including those in Asia, have entered the fray to build eco-friendly, smart cities by tapping digitized systems in totality to foster economic and environmental development. With this being billed as the Asian Century, the trend resounds across a diverse range of vertical sectors, spanning transportation, manufacturing, healthcare, logistics, sports and education. This transformation is guided by an intelligent network.

Both the cloud and social networking sites are now inextricably woven around the corporate fabric, making networks vulnerable to cyber-attacks even while giving them opportunities to grow their business. They can ill afford to turn their backs on these Web 2.0 realities. The potential can be tapped and the risks mitigated with a high IQ, intelligent, secure, resilient and high-performing network.

Author: Sudhir Narang
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Business Market Plays Cloud Computing Catch-Up

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The big spenders on technology are businesses and government agencies. They buy about 75 percent of the computing goods and services sold worldwide. Yet it is increasingly evident they are not driving the new ideas, excitement and powerhouse technology companies in ascent these days.

“The cutting edge of innovation is on the consumer side — digital technologies for consumption activity, play, entertainment and social-networked communication — and not in corporations anymore,” observed Timothy F. Bresnahan, an economist at Stanford.

Nowhere is that more apparent than in cloud computing, the technology industry’s buzz term for customers’ accessing information held in big data centers remotely over the Internet from anywhere, as if the services were in a cloud.

In the early days of computers, technology advanced because of government-financed research projects and work in corporate laboratories. Hobbyists developed the first personal computers, but it was only when I.B.M. entered the field in 1981, lending its seal of approval, that the PC industry really took off. Selling to businesses paved the way for the leading PC software and chip suppliers, Microsoft and Intel, to become giant corporations.

But marquee companies of the Internet era have made their names and fortunes mainly in the consumer market — both the first-generation Web winners like Amazon and Google, and the second-generation successes like Facebook and Twitter. And they have grown big and grown fast by offering search, shopping and social-networking services in the cloud.

Cloud computing, though, is more than a hyper-efficient means of distributing digital services. The cloud model is animated by a set of Internet technologies for juggling computing workloads in data centers far more efficiently than in the past — potentially reducing costs by about half, analysts say.

Yet to date, the large, established technology companies — and their businesses and government customers — have trailed in cloud computing. The marketing of the cloud, analysts say, is way ahead of real offerings by suppliers and its adoption by business customers.

But there are some recent signs of change. Last week, I.B.M. introduced a range of cloud services, including paying for computing resources like processing and storage on a metered pay-for-use formula, almost as if modeled on an electric utility. I.B.M. will offer customers an à la carte menu, in which they pay for different levels of guaranteed security, support and availability.

I.B.M., a bellwether in the corporate technology market, forecasts that it will have $7 billion in cloud revenue by 2015. Of the total, $4 billion will be customers shifting to cloud delivery from the company’s traditional software and services, and $3 billion is expected to be entirely new business.

“We’re moving to where the puck is going in this industry,” said Steven A. Mills, I.B.M.’s senior vice president for software and hardware. “And we’re more than willing to make this transition.”

In another industry move announced last week, Dell said that it would invest $1 billion over the next two years to build 10 new data centers and expand customer support, largely for cloud offerings.

The largest single customer for computing goods and services, the United States government, endorsed the cloud model this year. Vivek Kundra, the White House chief information officer, wrote a “Federal Cloud Computing Strategy” report, and identified $20 billion, or one quarter of the government’s total spending on information technology, as “a potential target” for migration to the cloud.

That document has certainly caught the attention of the government’s technology suppliers, like Lockheed Martin, the largest. “We’re keenly focused on cloud computing,” said Melvin Greer, a senior fellow at Lockheed Martin.

Still, the outlook is for an evolutionary shift toward the new technology spanning several years, even a decade or more, analysts say. People set the pace of technology adoption, and corporate data centers are filled with people whose skills and livelihoods are based on older technology and ways of doing things.

But technology managers, surveys show, are also genuinely concerned about security, reliability and liability if confidential corporate data resides on another company’s computers — and getting locked into proprietary clouds, controlled by one company. Standards groups are moving to set technical rules for sharing data across different clouds, including a working group established last week by the IEEE, a professional electronic and computer engineering organization.

“Cloud computing will become the new foundation for corporate information technology — it’s inevitable,” said Frank Gens, chief analyst for IDC, a technology research firm. “But there are a lot of concerns, challenges and inertia that will slow things down.”

There are also insurgents, like Amazon, that could speed things up in corporate cloud computing. Five years ago, the online bookseller and retailer decided to start a side business, offering computing resources to businesses from its network of sophisticated data centers. It called the new unit Amazon Web Services. It is a pay-for-use utility model, with customers paying from pennies to millions of dollars a month, says Adam Selipsky, vice president for product management.

Today, the customer ranks include Netflix, NASA, drug companies and major banks, which use Amazon’s data centers to remotely run Web applications that do tasks like tracking customer movie requests or running credit-risk simulations.

The Amazon cloud strategy, Mr. Selipsky says, mirrors its tactics in online retailing: build scale and efficiency, then cut costs and prices to gain market share. Amazon Web Services, he said, has reduced prices a dozen times in the last three years. “Most of that has been in the absence of competition,” Mr. Selipsky said, “because competitors have been so slow to emerge.”

Yet competition in the cloud market is intensifying. And that competition is taking shape across a number of fronts. It includes vendors offering basic computing resources like Amazon and Rackspace, joined by telecommunications giants like AT&T and Verizon that have entered the cloud business; companies offering ready-to-use applications tailored for businesses like Google’s online e-mail, document and collaboration services; Microsoft’s online version of its Office and collaboration tools; and Salesforce.com’s online customer management and collaboration tools.

Several companies also have built development environments on which programmers can build cloud software applications. Google has App Engine, Amazon has BeanStalk, Microsoft has Azure, Salesforce.com has Force.com, and VMware has Cloud Foundry, which was introduced on Tuesday. By 2014, IDC estimates that 30 percent of total spending on software applications in the corporate market will be for cloud applications.

Revenue from business cloud services — infrastructure resources, software applications and developer tools — was $22.2 billion last year, less than 2 percent of total technology spending, IDC estimates. But cloud revenue is growing at more than 25 percent a year, and will reach $55.5 billion by 2014, the research firm estimates.

Salesforce.com, founded in 1999, began selling customer-relationship software to businesses as an Internet service long before the industry began talking of cloud computing. Things built slowly at first, but Marc Benioff, founder and chief executive of Salesforce.com, says the turning point has come.

“What’s being called the cloud now is the future of enterprise software, but when I started in 1999 no one believed that,” said Mr. Benioff, who recently raised the company’s revenue forecast by 25 percent. “Sometimes you do have to wait them out.”

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Color Commentary: The End of the Friend

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Whoever said there’s not much new on the Web should have been around last week for the much-ballyhooed launch of Color – celebrated as one of the most exciting Web concepts to appear this year. If it lives up to its initial promise, Color represents a fundamentally new type of mobile social network that, in many ways, is almost the polar opposite of Facebook.

So what’s so radical about Color? For one, Color has done away entirely with the notion of the Friend – one of the most closely held pillars of the social networking crowd. In the Color world, the “Social Graph” has been replaced by something far different – a constantly changing social network that dynamically changes in relation to your geographic location. Not only that, in the Color world, your social relationships with others are based almost entirely on your photos: you are able to see the photos of people around you, as well as take photos and share them with users around you.

Instead of “Friends,” then, you have like-minded individuals sharing the same experience at the same time and relating to each other through images. Color does not even require a profile like a typical social networking site – once you launch the app on your iPhone, you’re asked to supply a name and then to take a picture of yourself. That’s it – then the Color app starts to populate your phone with the photos of others near you who are also using the Color app. Notice that you do not have any say in the matter – there are no privacy settings to toggle on/off – as soon as you open the app, any photos you take are instantly shared with the crowd.

To test out Color for the first time, I randomly spent an early morning at Grand Central Terminal, exploring Color on a scale large enough to find at least a few users of the Color app in real-time. Note that I said “users” and not “friends.” Sure enough, my iPhone immediately populated with the photos of users – not as many as I had expected, but certainly enough to give a sense of the potential power of Color as a real-time, mobile social network.

Certainly, Color explodes several of the fundamental underpinnings of traditional social networks – that you have a personalized profile page that acts as a centralized location for reading news about your friends and submitting status updates; that you develop a “social graph” of acquaintances; and that you have the ability to adjust your privacy settings to show different sides of yourself to different people.

Facebook already began the process of devaluing the notion of “Friend” until it came to represent something quite different than the traditional notion of a friend. What is the meaning of “friendship,” after all, when people collect thousands of friends at one time, a number that is almost an order of magnitude greater than your individual Dunbar’s Number? According to the founders of Color, the goal of the new social network is to develop an entirely new way of communicating with each other online.

In the Color world, there are no status updates, no profiles and no friends – only photographs that update where you are in the world, what you are doing, and who you are doing it with. At first, this is a terribly disorienting experience and it’s understandable why so many early reviews of Color have been negative.

I’ve been reading Jaron Lanier’s You Are Not a Gadget, and I’m now convinced that Color represents a subtle but profound shift on what’s happening on the Internet. Individuals – and the relationships they have with each other — are being re-thought, re-shaped and re-worked so that the collective consciousness is becoming more important than the person. Your memories of events are only valuable if they are shared with others who also experience the event.

Lanier, no doubt, would point to Color as evidence of the new depersonalization of the Web, and the celebration of the “hive mind” at the expense of the individual. I prefer to see Color in a different way – as symbolic of an evolution of the Internet to a new level of highly-contextual relationships and new ways of communicating. Even if Color does not live up to its early promise, the genie is already out of the bottle.

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It’s a Mobile, Social, Cloudy, Insecure World

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About 40 percent of Fortune 500 companies surveyed recently said they expect 15 percent or more of their applications to move to the cloud in the near future, Sarah Friar, managing director at Goldman Sachs, said Wednesday at ITSEF. That shift has even affected Goldman Sachs, “where we’re probably the most paranoid about letting go of these things,” she said.

Cloud computing, mobile computing and social networking are reshaping the face of the information security industry, Sarah Friar, managing director at Goldman Sachs, said Wednesday.

“I believe the cloud shift we’re seeing is similar to what we saw in the shift from mainframe to client/server,” Friar told attendees at ITSEF 2011, the fifth annual IT Security Entrepreneurs Forum, being held at Stanford University through Thursday.

Also, mobility is becoming the new face of computing, Friar said.

Meanwhile, enterprises are increasingly building social networking features into their applications or leveraging software with a social networking component such as Salesforce.com’s Chatter, Friar remarked.

User Demand

Goldman Sachs regularly surveys more than 100 CIOs of Fortune 500 companies, and 40 percent of them said they expect 15 percent or more of their applications to be in the cloud, Friar said.

That’s “a tremendous shift,” she stated. That shift has even affected Goldman Sachs, “where we’re probably the most paranoid about letting go of these things,” Friar said, adding that the firm has asked its IT staff to project where the company will be three years from now with respect to cloud services.

Initially, CIOs will probably look at moving infrequently used applications to the cloud.

For example, Goldman Sachs is looking at “things like an options application which runs only at the end of each quarter for a day or so,” Friar said.

User demand is forcing CIOs to consider moving to the cloud.

“There’s an imperative now for CIOs to make this happen because their business people want to understand how Amazon can put a text message through a Superbowl ad overnight but their in-house people require six weeks,” Friar pointed out.

Changing CIO Priorities

That user demand has led to CIOs embracing Software as a Service (SaaS) more rapidly. In turn, this has led CIOs to shift their priorities.

For example, 85 percent of Facebook’s applications are SaaS-based, Friar said. The remaining 15 percent is on Oracle Financials, but “every six months, [Facebook's CIO] runs a bake-off between Oracle on-premise, what Oracle can offer as a service, and up-and-comers,” Friar said.

Facebook’s CIO “wants to get 100 percent into the cloud; he doesn’t see ERP as mission-critical, what he thinks is important is how he can keep Facebook up and running,” Friar elaborated.

Respondents to Goldman Sachs’ survey said about 5 percent of their apps are now SaaS, but that will grow to 15 percent in the next few years, Friar said.

Galloping Off With Mobile

Mobility is changing how CIOs look at IT, Friar added.

For example, Goldman Sachs doesn’t want to worry about staff remembering to secure their iPads. Instead, its IT department created a virtual desktop that can be secured on the corporate servers, Friar pointed out.

“I think the shift to virtual desktops is ultimately part of the mobility theme,” Friar said. Using virtual desktops does away with IT concerns about users losing data on their mobile devices.

Data loss from mobile devices is a constant worry for IT, and vendors such as Sophos have added security and device control capabilities for smartphones and tablets to their products.

The need for security is growing as the use of mobile devices explodes in the enterprise due to the consumerization of IT.

Cisco’s figures show that mobile data traffic will double every year to 2014, increasing 39 times, Friar stated.

Getting to Know You

Social networking features are becoming an essential part of enterprise applications, Friar said.

The market for enterprise social software such as that from Lithium or Salesforce.com’s Chatter will be about US$1.2 billion by 2013, Friar estimated.

“Every enterprise application created from here on out will have to have a social feature,” Friar posited. “Most HR people I talk to are using LinkedIn for recruiting, and SAP is making it onto the graph through their relationship with Jive Software.”

Spending on Security

Security budgets tend to be a lot more stable than other IT budgets, Friar said.

Mobile security is the main priority for the CSOs (chief security officers) Goldman Sachs surveys, Friar pointed out.

Security is a major focus for the federal government as it moves toward the cloud, but it’s widely acknowledged that the feds are not quite up to speed in this area. The cybersecurity czar post created by President Obama, for example, has been a revolving door.

“We need more than a cyber czar,” Daniel Dunkel, president of New Era Associates, told TechNewsWorld. “We need somebody with cabinet-level access, something like the Commerce Secretary, because cybersecurity touches on so many areas.”

However, chances are that we’ll need to go through a cyberdisaster before we see any real action on the issue, Steven Rogers, president and CEO of Centripetal Networks, suggested.

“In this world we live in, we need a crisis before something is done,” Rogers told TechNewsWorld

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Mobility Seeds The Cloud

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We’ve learned a lot about mobility since the early days of this decade when businesses and consumers alike got their first taste of 3G networks. The shift from 2G voice-centric networks to 3G data-driven networks has made it clear that the real “killer apps” are mobile applications – transforming mobile devices into extensions of ourselves and our day-to-day lives.

Consumers and enterprise alike are starting to see the incredible potential for combining mobile applications with the power of cloud computing. Juniper Research estimates the market for cloud-based mobile applications will increase 88% annually over the next five years, growing from $400 million in 2009 to an estimated $9.5 billion in 2014, as users demand truly anytime, anywhere access to their personal and business information. As data networks continue to expand, the challenge for our industry is determining how best to move the cloud closer to consumers and offer the type of experiences tomorrow’s users will expect.

For cloud computing to truly take hold on mobile devices, two things need to align: stronger, faster mobile data connections delivering data to mobile devices and mobile technology capable of efficiently and effectively processing data, applications and services.

For network operators, rolling out complementary technologies such as HSPA+ and LTE will support the types of data capabilities necessary for true cloud computing. To date, 81 HSPA+ operators have launched networks in 48 countries; there are seven LTE networks operating and 113 LTE network commitments in 46 countries. Evolving today’s 3G networks will allow them to robustly meet the demand for data-intensive applications such as high-definition video streaming, peer-to-peer gaming and contextual awareness.

Hardware advances are as critical as the overall network to the overall success of cloud computing. Mobile devices must be able to process the data coming through the pipe efficiently and effectively in order to make the experience useful to people. Savvy mobile users will not be satisfied with slow performance or short battery life, and innovations such as hardware-accelerated multimedia engines, more efficient power management techniques and multi-core architectures will all be key to ensuring that devices are able to fully take advantage of the newly broadened data pipe.

Gartner expects smart phone sales to top PCs in 2012. Companies who prioritize developing mobile computing for the cloud and provide compelling experiences across multiple platforms will be at the forefront of the mobile tidal wave. It’s worth noting that without the applications that fully take advantage of cloud computing technology, the trend is hardly worth driving for its own sake. It’s the new services and applications on the horizon that makes the trend toward more advanced device capabilities and network technologies compelling.

One area where mobile and cloud computing converge is augmented reality, which allows computer-generated content to be superimposed over a live camera view of the real world. Qualcomm recently unveiled a platform and software development kit that allows developers to build new applications that bring online and offline worlds together. With the ability to blend location-based data and online apps, augmented reality will offer entirely new experiences for users and create new opportunities for developers.

Mobile devices and cloud computing also are being looked for improving health care. Sensor technologies can be combined with mobile devices to deliver ongoing monitoring and tracking, as well as GPS location and emergency communications. Mobile devices also enable patients in remote areas to access physicians and services that were previously unavailable.

Whether it’s leveraging sensors and location data to know where we are and what we are doing and translating that information into a valuable service, or allowing mobile devices to discover and talk to each other to enable a new dimension of social networking, or simply delivering the best possible experience browsing the mobile Internet…these are the challenges that the industry must overcome as it works to “move the cloud” and bring it closer than ever to people’s daily lives.

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The Lines Between Cloud Computing Models Are Blurring

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The three dominant cloud computing models — Infrastructure as a Service (IaaS), Software as a Service (SaaS) and Platform as a Service (PaaS) — are changing fast, as cloud providers reach up and down the stack to offer as close to a one-stop shop as possible.

To understand how these cloud computing models are evolving and converging, it helps to know the history, said Jeffrey Kaplan, managing director of ThinkStrategies Inc., a consultancy in Wellesley, Mass. For one thing, he says, SaaS was first.

By 2006, Salesforce.com Inc.’s strategy to appeal to end users of its customer relationship management (CRM) SaaS — as opposed to the IT staff — had taken off, to the point where other software makers decided to mimic its subscription-style, usage-billed, pay-as-you-go pricing. This created a shadow process whereby business managers began to buy their own software solutions, as opposed to getting them from IT.

“Then Amazon asked, ‘Why can’t we do that with compute power?’ and the concept of IaaS was born,” Kaplan said. “[Previous attempts at] utility computing didn’t take off because it was complex. Amazon commoditized compute power, allowing users to buy it literally by the hour or by MIPS.”

Not long afterward, Salesforce.com realized that some customers wanted to customize its software, and thought, “Maybe we should give them a developer’s environment,” Kaplan said. And thus came PaaS.

IaaS gets automation

In 2011, a big trend in IaaS is the move to automation — a converged infrastructure with automated scripting, according to Joe Onisick, technology solutions architect at World Wide Technology Inc., a systems integrator in St. Louis. The IaaS might not have orchestration abilities from a portal, but it can rapidly provision services, he said.

For instance, when an application developer requests servers with a particular processing capacity and memory, IT would use automation tools to deploy the virtual or physical resources required from the underlying converged infrastructure.

The difference between automation and orchestration is that if true “orchestration” was in place, the developer could submit the request in a portal; and all approval, change management and infrastructure deployment would be handled without IT intervention, Onisick said.

Another trend is the blend of IaaS and SaaS, such as Hewlett-Packard Co.’s Enterprise Cloud Services (ECS), announced last week. The ECS run on Hewlett-Packard’s Converged Infrastructure architectural model, to match clients’ IaaS resources with their demand for business applications. HP securely hosts the workloads to provide something the Palo Alto company calls Computing as a Service.

Meanwhile, such traditional hosting companies as Savvis Inc. and NaviSite Inc. are transforming their server farms into virtual private clouds, Kaplan says; and IaaS provider Rackspace U.S. Inc.has added management services to its cloud servers, including monitoring and technical guidance.

SaaS is here to stay

Enterprises battered by the recession are not as interested as they once were in investing time and money in software development or software maintenance. Moreover, software licensing continues to be a headache in a virtualized environment. For both reasons, software subscription cloud computing models are expected to stick around, and business software companies are paying heed, according to Kevin Dobbs, managing partner of Montclair Advisors LLC in San Francisco.

Vendors like Oracle Corp. and SAP AG will get on board with this shift, delivering subscription models of their software that include cloud-like features, such as self-service and usage billing, according to industry analysts. IBM, which already has a SaaS, last month announced new partnerships and greater adoption of its LotusLive public cloud services. Those provide integrated email, social networking and collaboration services through the IBM cloud.

“This shift [to SaaS] is massive, and is going to take at least 10 years,” Dobbs said. “We are probably only in the second year, post recession.”

This isn’t necessarily a good development, said Henry Mayorga, director of network technologies at Baron Capital Inc. in New York. “The subscription model is detrimental to the end user. [Vendors] parcel off pieces, charge you for components. Let’s say I want to upgrade vSphere — the first thing I have to upgrade is vSphere management,” he said. “[Vendors] have shifted the control components to separate products for which they can charge. Backup and replication are sold separately. It is about finding new revenue streams.”

Analysts at Forrester Research Inc., however, said SaaS will be a disruptive technology in only a quarter of the areas served by the global software market. Andrew Bartels and Liz Herbert, analysts at the Cambridge, Mass. firm, project that SaaS will grow from 7% of total software spending in 2010 to 17% in 2013.

The CIO of a high-end acoustic electronics maker, who asked to remain anonymous, said he uses SaaS for a corporate training and learning management system — one of the areas in which SaaS will disrupt the status quo, according to Bartels and Herbert. In addition to human resource management, many companies are using SaaS for CRM, IT management and security, they said.

Even the original SaaS model is blurring. Last week, NetSuite Inc., a San Mateo, Calif., provider of enterprise resource planning software suites delivered as SaaS, announced a partnership with Baker Tilly Virchow Krause LLP, an accounting and advisory firm in Chicago, to establish a professional service, or “cloud computing consulting practice,” for accountants.

He has seen the future, and it is PaaS

“I see PaaS as the true end-goal for cloud computing,” World Wide Technology’s Onisick said. “Developing SaaS or private software offerings on a common portable platform removes the tie to the infrastructure as a whole, and makes the application more portable, robust and scalable.”

Several companies are partnering to create cloud computing services where developers can build applications directly on a platform without worrying about the underlying infrastructure or operating system. Microsoft and Google Inc. with their Azure and Google Engine, respectively are getting involved, according to Kaplan. “Some people call Amazon [a] PaaS, but it does not provide the development environment,” he said.

Microsoft’s Azure cloud will support applications developed in the PHP scripting language and Java, as well as in its own .NET. Salesforce.com, likewise, expanded its Force.com development platform by purchasing Ruby on Rails provider Heroku in December. Many other PaaS offerings are here today and coming in 2011, according to Montclair Advisors’ Dobbs. Those include products from Apprenda Inc., Corent Technology Inc., Engine Yard Inc., Facebook Inc., Intalio Inc. and Nimbula Inc. Also available now or soon are Adobe Systems Inc.’s Flex, Intuit Inc.’s IPP, NetSuite’s SuiteCloud, Oracle Corp.’s Fusion, Relational Networks Inc.’s LongJump and Wolf Frameworks’ Wolf.

“As these offerings start to become more portable and standardized between cloud providers, this model will increase in popularity,” Onisick said.

To that end, the OpenStack project founded by NASA and Rackspace has lured about 50 companies, including most recently, Cisco Systems Inc.

IaaS-SaaS-PaaS triple threats?

And then there are those who would become triple threats, providing all three service models. IBM is doing it with IaaS in its data centers, LotusLive SaaS and its middleware stack as a PaaS, Kaplan said. Hewlett-Packard has hardware for IaaS and wants to convert its systems management into SaaS, but is not in the PaaS game, he said. Dell Inc. is in the running, having bought several SaaS providers last year, and having an IaaS product through its acquisition of Perot Systems.

“What these changes will do to business has yet to be fully fathomed,” said Geoff Woollacott, engagement manager and senior analyst at Technology Business Research Inc. in Hampton, N.H. He is working to come up with simple, standard definitions for IT services that are provisioned like a utility.

“If you buy the ‘IT as electric current’ concept,” Woollacott said, “what is happening is that discrete businesses are realizing it is cheaper and less of a headache to sign up for Con Edison than to build and operate their own power plant.”

The trick for IT executives is determining who the Con Edison of cloud computing will be.

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IT: To Cloud, or Not To Cloud

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The growth in popularity of web-based applications like social networking sites and even cloud computing software like Google Docs has raised more and more questions concerning security requirements. Particularly when it comes to the use of virtual and cloud environments for sensitive data hosting, rather than use of local data centres – does data protection now demand a new approach?

Data protection schemes should always pursue pre-emptive tactics. In fact, nowadays it’s an essential requirement for security control systems to reveal and prevent hacking attempts in real time – otherwise damage of data, information leakage or loss of data integrity might be unrecoverable where a company primarily does its business over the internet.

What security issues will you face?

There’s always a danger of unauthorised data access (which could involve unauthorised access to the data, modification or even deletion) if you’re using a hosted application where you can’t control your hosting media. The major difference between the old approach (using your own local data-centres) and new approach (in the cloud) is that you have to put in extra ‘smart’ protection and detection mechanisms, such as:

* Logic in your system that will watch for massive data changes
* Logic that watches for unusual mass data retrieval
* Geo-checks for an authenticated user (for example, if the user is assigned to your Bristol branch and has no roaming option activated, but their IP tracks back to London)

Make sure your system will (semi-)automatically block suspicious users and notify your system administrators. Having the system in your own data centre allows you to implement physical control of data access, checking smartcard IDs, fingerprints and even retina scans, so user authenticity is trustworthy. With a hosted application all you can do is ensure that you run as many logical checks as possible and, if something goes wrong, you detect the problem at an early stage.

Hosted software solutions

More and more companies are taking the decision to migrate customer management and basic planning systems from their own data centres to leased web platforms. These offer web-based access to corporate databases and management applications. Usually, they take the benefits of cloud structures and, while a cloud structure has a long list of benefits, (there should be a good reason why more and more companies are moving data out of their data centres) there are still disadvantages.

The major disadvantage is (even if it surprises you) the same as its major advantage: ‘Software as a Service’ means that every single client uses exactly the same set of software applications which incorporate the same logical principals, procedures and algorithms. In a word, they’re generic. They offer the same ideas to different clients: every client uses the same authorization schemes, data integrity checks, credential validations, etc.

For some companies, these solutions are way ahead, more useful, flexible and secure in comparison with the old software they used in local data centres. For other companies with specific security requirements, these ‘generic’ ideas are not enough to offer sufficient levels of access protection and they can’t deal with the security risks. In which case, SaaS will definitely restrict you in how you can organize data access authorization, which is something you can’t control.

What’s next?

There are lots of pros and cons when choosing the right way for your company’s IT infrastructure development, you just need to summarize them and choose the right one:

* Define the weak and strong sides of using your own data centre and compare it against the same set of criteria for a virtual/cloud hosted system.
* Define security risks you have in your data centre and compare them against the security threats for a hosted platform.
* Based on the previous list, make two lists: ‘Absolutely required’ and ‘Wish list’ for your security requirements; find a platform provider that will perfectly fit your needs.

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Are You Prepared for BusiLeaks?

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In the era of WikiLeaks, it’s no wonder that business executives are feeling less secure about their organizations’ data. A recent study by Ernst & Young found that 60% of those polled perceive increased risk from the use of social networking, cloud computing and personal mobile devices at work.

“Organizations are operating in a world that requires borderless security,” warns Bernie Wedge, an IT risk practice leader at Ernst & Young. “Information access by employees using mobile devices, or items that are maintained and accessed by customers, vendors or other business partners, are considered outside traditional borders. Therefore, companies must think about security beyond their employees, data centers and firewalls.”

The study found organizations recognize the risks that come with emerging technology trends and are taking steps to protect information with stronger security programs. Half of the senior executives surveyed said they expect to spend more on data leakage/data loss prevention efforts over the next year. Still, facing continuing economic pressures, companies also want to reduce their overall IT spend and are looking to cloud computing services as a solution. The risk associated with cloud computing include data leakage; 52% of executives identified it as the largest associated risk. Some 39% cite the lost visibility of company data as an increased risk of cloud-based computing.

Information security is shifting from a technology-only approach to one that includes technology and people, the study shows. All employees have a role in information security and organizations need to clearly communicate their responsibilities. People and organizations “outside the borders of the traditional corporate environment play a role in helping to achieve information security objectives, but can also pose a risk to protecting your information,” says Jose Granado, an information security expert at Ernst & Young. “A comprehensive IT risk management program must focus on people, processes and technology to address information throughout its lifecycle, wherever it resides.”

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Look for New Shapes in the Clouds in 2011

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The tremendous growth of the cloud computing market, despite shortcomings in some areas, is a testament to the level of pent-up frustration that exists within organizations of all sizes across nearly every industry with legacy on-premise software and systems, and the tangible benefits today’s leading cloud vendors are quickly delivering to their early adopter customers.

As the year winds to an end, it is incumbent on all industry pundits to make predictions about what they envision for the coming year. Since I’m often lumped into this category, I’m obliged to offer my views about how the world will evolve over the next 12 months from a cloud computing perspective.

First, I’d like to quickly review the pivotal opportunities and challenges I identified in this space for 2010.

The Opportunities

Back in January, I identified six areas of growth:

* International Expansion
* Inter-Enterprise Applications
* Enterprise-Oriented Social Networks
* IT and Service Management
* Communications as a Service (CaaS)
* eHealth and Energy Management

I think we can agree that there has been substantial activity in all of these areas, with plenty of additional opportunities still to be realized in each.

The Challenges

However, much of this growth has come despite the fact that many cloud computing vendors are still grappling with how to cost-effectively address the following challenges, which I also outlined last January:

* Deliver strategic value, not just incremental cost-savings;
* Avoid competing on price alone and further commoditizing cloud services;
* Convince enterprises to move more core business applications and operations to the cloud;
* Fend off escalating security threats to prove the cloud is a safe place to put corporate data;
* Address growing integration complexities to show how the cloud can complement legacy, on-premise systems and software;
* Resolve potential channel conflicts as more resellers, integrators and other third-parties vie for a share of the market; and
* Improve management visibility and governance to provide greater user control and compliance.

The tremendous growth of the cloud computing market, despite shortcomings in some of the areas I identified, is a testament to the level of pent-up frustration that exists within organizations of all sizes across nearly every industry with legacy on-premise software and systems, and the tangible benefits today’s leading cloud vendors are quickly delivering to their early adopter customers.

So, what is in store for 2011?

The Road Ahead

Here are 10 trends you can expect in the coming year:

1. The Cloud Computing market will grow more rapidly than analyst firms forecast as organizations move from asking “what is cloud and why is it important” to “where and how can I capitalize on the cloud today!?!”
2. This accelerated growth will occur despite a major cloud computing service disruptions and/or significant security infractions, which will heighten customer concerns but won’t discourage wider adoption. (The recent Cyber Monday sales success despite Comcast’s (Nasdaq: CMCSK) Internet service outage the night before is an example of the resilience of the cloud.)
3. A wider array of appliances and applets will be offered by a growing number of cloud vendors, which will permit users to “download” the functionality they need so they can work offline or deploy cloud-based solutions behind the firewall to satisfy their reliability and security concerns.
4. Community clouds aimed at specific vertical markets and supply chain relationships will become more prevalent, as various organizations recognize the value of sharing cloud resources and services with their peers. IBM (NYSE: IBM) is moving aggressively in this area.
5. Corporate decision makers will shift their focus from reliability, security and integration concerns to strategic and tactical governance issues, ranging from planning, selection, deployment, monitoring and evaluation to optimization and monetization of cloud initiatives.
6. The rate of cloud company failures and M&A activities will escalate as many startups are unable to keep pace with rising customer expectations and intensifying competitive pressures, and established players attempt to accelerate their development efforts via acquisitions.
7. Vendors that provide cloud integration tools and professional services, in particular, will be key acquisition targets because they represent a critical component in pulling the various cloud piece-parts together. The acquisitions of Cast Iron Systems and Boomi are just the beginning on the tools side. Consolidation among cloud integration service firms will occur in the coming year.
8. Social networking will become a required component of enterprise applications, driven by the success of Salesforce.com’s (NYSE: CRM) Chatter. By offering Chatter free to a broader population of end-users within its existing accounts, Salesforce.com is not only raising the bar for its direct competitors, but also expanding and redefining its role within the enterprise.
9. Datamarts will become a cornerstone of a new generation of cloud-based Data as a Service (DaaS) and Business Process as a Service (BPaaS) solutions, as well as industry benchmark services. Microsoft’s (Nasdaq: MSFT) recent offerings and D&B’s new 360 capabilities are examples of this important trend.
10. New channel programs will be introduced, new channel partners will emerge and new revenue streams will be established. Ironically, the leading cloud vendors — such as Amazon (Nasdaq: AMZN), Google (Nasdaq: GOOG) and Salesforce.com — will continue to have the toughest time building successful channel programs because of their direct sales heritage.

The Bottom Line

Cloud computing is quickly becoming an essential part of the day-to-day business operations of organizations of all sizes, just as e-commerce has become a readily accepted part of our personal lives.

As a result, it will be a high priority for IT and business decision makers to establish tight-knit cloud strategies to respond to the opportunities and challenges in 2011.

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