Transitioning From The Enterprise To The Cloud

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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Rumors of an alliance between Cisco and VMware have been swirling with varying levels of intensity for some time.

What’s the business problem that a potential alliance needs to address?

1) The most obvious one is that current VMware Distributed Resource Scheduling (DRS), Disaster Recovery (DR), and High Availability (HA) functionality built on core capabilities like VMotion are incomplete. It’s hard to move the Virtual Machine (VM) for spare capacity or to deal with downtime to any random server and maintain the connections to the same isolated data and storage area network (SAN). Instead, administrators either have to open up the network so any server can see any other server and any storage device, a security risk, or they have to manually remap the connections.

2) The less obvious and more speculative problem to be addressed is the management and automation of business services across resources and applications. It is still primitive, though the big 4, CA, BMC, HP Openview, and IBM Tivoli are all hard at work addressing this, and CIOs are looking for the provider of a strategic, new provider.

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By George Gilbert

This is our first set of hypotheses about how virtualization is impacting each of the layers of the IT stack. We will elaborate and refine them as we continue to collect insights from vendors and our upcoming survey of IT decision makers.

The Ultimate Objective

· It’s more than just the savings from server consolidation and more than just greater flexibility in managing planned (VMotion) and unplanned downtime (disaster recovery, high availability)

· Ultimately, it’s about automating the data center in order to make it easier for companies to deliver online business and consumer services. The iconic example of an online service that complemented a traditional business was the Sabre travel reservation system born in the ‘60s. It was based on purpose-built infrastructure that required intense collaboration between the customer, American Airlines, and the vendor, IBM. More recent examples include Fedex package tracking or the familiar dot.com services from Amazon, eBay, and Google. In order to make it easier for businesses to build or assemble end to end services from existing assets, technology vendors have to convert “assets” into “pools of services” using virtualization at every layer of the IT stack.

Looking at the IT Stack Layer by Layer

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