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New options for developing killer apps, deploying cool Web services, and building competitive advantages
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 Dear Inner Circle readers,
Imagine scaling up instantly to massive capacities to meet changing needs. Then imagine doing it on the Web, without having to invest in new infrastructure, train new personnel, or license new software. That is cloud computing!
The widespread availability of high-speed Internet connectivity along with high-performance datacenter development is increasing both awareness and usage of cloud computing.
More than just software-as-a-service, cloud computing allows you to truly leverage the Internet to access massively scalable technology-enabled services, without the escalating costs and traditional IT infrastructure management headaches that can slow you down and interfere with your organization’s overall progress.
Cloud computing is all about efficiency. It provides a way to deploy and access everything from single systems up to massive amounts of IT resources, on demand, in real time, at an affordable cost. Forward-looking companies of all types are now looking at this model to simultaneously reduce infrastructure costs and increase computational capabilities.
Because the best cloud strategies build on concepts and tools that developers already know, clouds also have the potential to redefine the relationship between IT and the developers and business units who depend on it. IT gains new efficiency and points of control while customers gain access to services with a new level of simplicity and control.
While cloud technologies have been in development for years, the emergence of cloud computing is still a relatively new phenomenon. In August 2008, Gartner observed that "organizations are switching from company-owned hardware and software assets to per-use service-based models" and that the "projected shift to cloud computing will result in dramatic growth in IT products in some areas and in significant reductions in other areas.”
Why do cloud computing?
One of the obvious reasons is to get better utilization out of the computing resources you have. A key attribute of cloud computing is how it changes economics. You only pay for what you use, and rates are typically lower than the equivalent cost of building and supporting these services internally.
Cloud computing is all about efficiency. It provides a way to deploy and access everything from single systems up to massive amounts of IT resources, on demand, in real time, at an affordable cost. Forward-looking companies of all types are now looking at this model to simultaneously reduce infrastructure costs and increase computational capabilities.
Cloud computing is not just about hardware. It is also a programming revolution. Agile, easy-to-access, lightweight Web protocols — coupled with pervasive, horizontally scaled architecture — can accelerate development cycles and time-to-market with new applications and services. Cloud computing can usher in a new era of productivity if developers build on platforms designed to be federated rather than centralized.
Even while IT is being asked to contain or reduce costs, demands from the business continue to rise. Workloads such as streaming content, high-performance computing (HPC) applications and rich Web experiences require massive compute and storage resources and also experience sudden surges and spikes in demand. They simply operate at a scale that is beyond the capacity of traditional IT infrastructure. Cloud computing offers a solution.
Given the current economic scenario, businesses are focusing on making wise investments that both reduce costs and enable them to better leverage technology. Here is what cloud computing can offer:
- Reducing CAPEX. Cloud computing makes it possible for companies to convert IT costs from capital expense to operating expense through technologies such as virtualization.
- Cutting the cost of running a datacentre. Cloud computing improves infrastructure utilization rates and streamlines resource management. For example, cloud computing allows for self-service provisioning through APIs, bringing a higher level of automation to the datacenter and reducing management costs.
- Eliminating over-provisioning. Cloud computing provides scaling on demand which, when combined with utility pricing, removes the need to over-provision to meet demand. With cloud computing, companies can scale up to massive capacities in an instant, without having to invest in new infrastructure, train new personnel, or license new software.
- Increasing agility. Cloud computing accommodates change like no other model and can also provide a wider selection of more lightweight and agile development tools, simplifying and speeding up the development process.
- Accelerating cycles. The cloud computing model provides a faster, more efficient way to develop the new generation of applications and services. Faster development and testing cycles means businesses can accomplish in hours what used to take days, weeks or months.
All cloud computing deployments have a few things in common. At the highest level, they are a means of delivering IT resources as a set of well-defined services. Just as electric utilities gain efficiency by limiting your options for voltage and frequency, clouds gain efficiency by doing a small number of services very well. Of course this means that some applications would not fit a particular cloud, but that is the important tradeoff.
The silver lining for IT
Cloud computing creates compelling new economic models for IT service delivery. Here are the three options for taking advantage of the cloud computing model:
Use the cloud.
The number and quality of public, commercially available cloud-based service offerings are growing fast. Using the cloud is a great option for start-ups, research projects, Web 2.0 developers, or niche players who want to "load and go." You can use the cloud for:
- Offloading overburdened IT infrastructure (temporarily or permanently). For example, why purchase separate systems for software development and testing when those tasks could be accomplished using cloud services?
- Accommodating peak load, batch processing jobs, or spikes in demand for services
- Experimenting with new software tools without having to purchase them
Build the cloud.
Options include building a private cloud for internal use, building a public cloud that can become a new source of revenue, or building a hybrid cloud that combines the two.
Sun expects to see huge growth in the deployment of private clouds. Many large enterprises understand the economic benefits of cloud computing but want to ensure strict enforcement of security policies, compliance with regulations, or other constraints that make public clouds impractical at this point in time.
The momentum behind public and hybrid cloud construction is also growing as enterprises and service providers gain experience with the cloud model. The high growth rates of public cloud offerings available today will no doubt accelerate that momentum.
Be the cloud.
Your organization can become a cloud computing service provider or "cloud aggregator," offering multiple types of cloud services. After all, the list of services enabled by cloud computing doesn't begin and end with SaaS, PaaS, and IaaS. Specialized cloud forms include payment as a service, security as a service, backup as a service, collaboration as a service, the list goes on.
What’s on the horizon
So cloud computing is here and, it is for real. In the near term there will be a growing trend of businesses taking advantage of cloud computing, tapping the resources of a remote, third-party infrastructure as they need it and being able to dynamically increase their compute capacity to match their fluctuating IT demands.
Analysts at Gartner and TABB Group, a research and advisory firm that focuses on financial markets, agree that the current economic downturn is already sparking interest in cloud computing both on Wall Street and elsewhere. "We expect examinations of various cloud services to accelerate," says Gartner fellow and vice president Ken McGee. "There will be a flight toward looking for lower-cost options."
Cloud computing is reshaping the IT marketplace, creating new opportunities for suppliers and catalyzing changes in traditional IT offerings. Over the next five years, IDC expects spending on IT cloud services to grow almost threefold, reaching $42 billion by 2012 and accounting for 9% of revenues in five key market segments. More importantly, spending on cloud computing will accelerate throughout the forecast period, capturing 25% of IT spending growth in 2012 and nearly a third of growth the following year.
Moreover, IDC expects the cloud adoption trend to be amplified by the current financial crisis. The cloud model offers a much cheaper way for businesses to acquire and use IT. In an economic downturn, the appeal of that cost advantage will be greatly magnified. This advantage is especially important for small and medium businesses, a sector that will be key target in any plan for recovery.
We will continue to see the build-out of services in the cloud that are more enterprise-ready. We already see this in areas such as CRM, ERP, HR and others. As this market continues to grow the number and depth of clouds will grow as well. As this happens, IT will have to work with the business differently. Gearing up for greater demand the biggest IT vendors and cloud providers appear to be gearing up to take advantage of enterprise interest moving forward.
Anil Valluri
Vice President & Managing Director
Sun Microsystems India
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