Transitioning From The Enterprise To The Cloud

This article, written by Laton McCartney, first appeared on CIOZone.com and is re-posted here courtesy of Information-Security-Resources.com

It’s too early to gauge the full impact that cloud computing will have on the responsibilities and priorities of chief information officers, but some changes are already evident.

Clearly, CIOs will serve as the change agents as the cloud becomes more pervasive through the enterprise.

They’ll likely need to educate fellow C-level executives from the CEO and CFO on down as to how cloud computing can benefit the organization - and where it may fall short or create security problems.

Likely it will be up to the IT chief to act as a relationship and portfolio manager in negotiating with cloud service providers and monitoring their performance.

And that’s just for starters. Here are five ways the cloud could alter the CIO position

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By George Gilbert

This post originally appeared on GigaOm here.

VMware has finally joined Microsoft, IBM and Oracle as one of the four horsemen in the market for platforms for building, running and managing corporate and cloud applications. With its SpringSource acquisition, VMware can now compete with specialized platform-as-a-service offerings like Microsoft’s Azure. In addition, SpringSource’s introduction of Cloud Foundry yesterday makes a crucial connection between deploying Spring-based and other Java applications in the enterprise and the cloud while giving developers an increased ability to manage their applications in a self-service mode.

Before the SpringSource acquisition, VMware faced potentially diminishing returns by putting a layer that manages virtualization on ever more of the enterprise infrastructure. That layer, which VMware pioneered and dominated, cracked open Microsoft’s control of the hardware by sliding a hypervisor underneath the operating system.

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By Juergen Urbanski

The crisis in IT is not about performance or features, it is about complexity.  Complexity makes the enterprise choke on IT operations cost

Performance, in terms of CPU, memory and network bandwidth, is becoming an increasingly abundant commodity that simply gets better, cheaper and faster each year.  The time has passed when any one company can create a sustainable competitive advantage based on hardware alone.

However, there are two scarce commodities that become increasingly prominent year after year relative to the declining costs of the above: latency and human attention.  Latency is forever constrained by the speed of light and the distance between elements of a distributed system.  IT labor does not ride on Moore’s Law either, to the contrary.  As systems increase in scale, complexity increases and more human attention is consumed by the number, relationships and diversity of IT assets in the data center.  Since the number and variety of nodes in an architecture that must be “supervised” by the administrator increases, there are more combinations of things that can go wrong.

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By Juergen Urbanski

Our Summer poll among enterprise storage customers suggests that appetite for experimentation with innovative technologies is low in the current environment.

Key themes emerging from our in-depth survey of 60 enterprises include:

• Cutting cost today: Customers are concentrating storage spend on a smaller number of leading OEMs (e.g., EMC, IBM, HP, DELL, NetApp, SUN), who may not always be the lowest cost providers, presumably in the hope of wringing volume discounts out of their established vendors and avoiding the complexity and management overhead that can come with more heterogeneous environments. In a notable departure from past practice, they push storage vendors to quote software separately from hardware. Many consider price per GB a top criterion for new purchases, a slightly short-sighted view perhaps that neglects lifetime TCO per GB. Customers are rolling out storage efficiency technologies as fast as they can. The motivation for this move though is to push back additional capex as long as possible, rather than keep more data around for longer. (more…)

By Juergen Urbanski

Q: Jeff, what percentage of enterprise IT demand for storage will be fulfilled by service provider (i.e., external) clouds in 3-5 years? What drives that?

A: In 2014, 80% of new storage capacity and 50% of spend may go to the cloud, driven by the complexity crisis you laid out. The opex for sustaining IT is driving the majority of TCO, even though disk and array prices continue to decline. Most IT organizations will lack the time, budget or experience that will be required to successfully fulfill their own storage needs. Against that, we can deliver our service to customers at one fifth to one tenth the TCO of equivalent NAS-class enterprise storage arrays, assuming street pricing and a 3-year depreciation cycle.

Q: What percentage of enterprise IT demand for storage will be fulfilled by enterprise (i.e., private) clouds in 3-5 years?

A: Longer term we expect to see very few private clouds in the general enterprise space, except for government and perhaps some extreme high performance computing situations. I doubt the average enterprise customer will be able to successfully buy, configure, deploy, manage and grow a private storage cloud. If they couldn’t keep up with data growth in the legacy world, in spite of attempts to standardize on fewer vendor products and interfaces and more storage monitoring and management, what makes anyone think they will be able to handle more hardware, more variable performance components, more monitoring that would be typical of a private cloud?

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By George Gilbert

This post originally appeared on GigaOm here.

Moore’s Law has enabled new applications by powering computing on an exponential price/performance curve. But increasingly, the proliferation of a new generation of large-scale applications is being constrained by another price/performance curve that hasn’t shown much improvement: IT operations and the cost of delivery. To create ever more sophisticated applications that can be delivered from public or private clouds, we have to ride a delivery cost curve that looks more like Moore’s Law. Otherwise, we’ll choke on our systems.

Timothy Chou, ex-president of Oracle On Demand, has written a book (“Cloud: Seven Clear Business Models“) that takes a fresh perspective on cloud computing. To him, the key promise of the cloud is to reduce the cost of delivering applications by improving IT operations. Traditional legacy applications such as Oracle or SAP have a fully loaded cost of delivery of $1,000-$1,500 per user per month. Several years ago, Oracle On Demand got that cost down to $50-$100, whether it was Oracle-hosted or customer-hosted. SalesForce.com has squeezed that cost down even more to $7-$10, though admittedly just for the much lighter-weight CRM portion of the suite.

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By Juergen Urbanski

The storage industry is at the cusp of the biggest structural change since networked storage began to eat into direct-attached storage a decade ago. Several major technology shifts will radically re-define the profit pools in the industry, leading to slimmer margins for all but the most innovative, software-driven players. The big picture idea is analogous to the transition from mainframes to client/server in the world of computing.

The economics of private and public cloud computing will break some of the barriers between servers, storage and networking. Server vendors, notably DELL and HP via their recent acquisitions, are chasing after the higher margin pools available in the storage market. Meanwhile, storage vendors have to embrace storage efficiency and virtualization to survive, yet their underlying product architectures are – in most cases – not well suited to a virtual environment, creating an opportunities for a host of startups built around the idea of smart storage software that is detached from but leverages abundant pools of cheap storage hardware. That software may or may not be provided by the storage array vendor, and will very likely work on storage arrays from different vendors. The current recession provides the ultimate ‘why now’ for CIOs to embrace new ways of thinking about how storage fits into the virtualized data center.

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By George Gilbert

Our most recent report illustrates how server virtualization will disrupt the storage, database, and middleware markets while creating large new opportunities in business continuity and cloud computing which VMWare is well positioned to exploit.

Based on feedback by 200 IT customers on vendors VMWare, Citrix, Microsoft, Oracle, IBM, Symantec, CA, BMC, NetApp, EMC, DELL, and HP, the report concludes:

Private cloud computing is the largest new profit pool in the virtualized data center.

Virtualization will transform IT investment from a fixed capital expenditure to a variable operating expense, delivering 10x greater IT staff productivity in the process. Cloud technologies in the enterprise, growing out of virtualization and service-oriented management, transform disparate applications and infrastructure into services that are delivered on-demand. VMWare will face greater than expected competition from Microsoft and is turning towards systems management vendors such as BMC and CA for partnerships.

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By George Gilbert

The recent posts about the economics of cloud computing between Nick Carr and Tim O’Reilly (here and here) and the panel at this week’s Web 2.0 have created a lot of buzz. The central question is of great consequence: will the emerging “cloud” operating system generate the monopoly rents and industry control that Microsoft enjoyed with Windows? For the sake of argument, let’s assume VMware is leading in private enterprise clouds and that for now Amazon leads public ones with Google, Yahoo, Rackspace, and Microsoft as contenders. It seems likely so far that Microsoft will have a significant advantage in private clouds, though not to the same extent as with Windows. Public clouds seem years further out, so they’re harder to handicap.

But at the center of the argument is whether dominance in either variety will come via Web 2.0 style “harnessing collective intelligence” or the more traditional “network effects.”  I believe we will see Microsoft emerge as a leader in private clouds in 3-5 years and it will be on account of the more traditional network effects.  Market share won’t accrue to the leader by virtue of capturing more information every time someone uses the cloud.  Instead, it will accumulate the way Windows steadily accumulated application and device support over time.

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By George Gilbert

The Economist came out with an excellent special in its Oct 25 edition entitled ‘A Survey of Corporate IT’.  A series of articles explore the future of cloud computing.

The public’s excitement though around cloud computing overrates what is happening and under-estimates the dramatic impact that internal and external clouds will have in the medium term.

Hopes too high on pace of adoption

Our own research with customers indicates that businesses are slow to adopt the public cloud (outside of SaaS of course).  Top concerns are data protection (security, privacy) and lock-in to one cloud provider (lack of standards).  Early enterprise adopters are those with spiky traffic (e.g., media and entertainment) where the cloud provides low baseline cost with infinite scalability.

Our survey also indicates that enterprises are building private internal ‘clouds’ right now which are enabled through virtualization (see prior post just below).

We have heard repeatedly that joining these with external clouds is a few years out, though we are encourged that it’s on VMWare’s roadmap.

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