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Cloud Computing— Latest Buzzword Or a Glimpse of the Future?

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Cloud Computing— Latest Buzzword Or a Glimpse of the Future? Cloud Computing— Latest Buzzword or a Glimpse of the Future? Sponsored by Google, Inc. Executive Summary: The chairman of the Cloud Summit Executive 2008 conference reportedly started the event by joking that he asked 20 people to define cloud computing, and got 22 different answers. The term came into vogue a few years ago and has since generated its share of controversy. Here are some descriptions we found for cloud computing: • Something that will “profoundly change the way people work and companies operate.” ( The Economist ) • “Reliance on the Internet for satisfying the computing needs of the users.” (Wikipedia) • “The next step in the evolution of software-as-a-service (SaaS) technology.” ([email protected]. Carey, Arizona State University’s online business publication) • “Industry-speak for just about anything tangentially related to the Internet.” (Ben Worthen, The Wall Street Journal ) • “We’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements.” (Larry Ellison, Oracle) Clearly, there is a diversity of opinion on what cloud computing is, what it isn’t, and whether it’s a sea change or just another technology fad. Our opinion: Don’t get hung up on definitions. Don’t focus on the jargon of whether something is cloud computing, or software as a service, or the latest buzzword. Instead, focus on the changing IT equation. The world of computing is moving away from the on- premises IT model, where you keep buying servers, PCs and software licenses as your business grows. Cloud computing disrupts the conventional model and opens a new IT path for the small-to- midsize business: “clouds” of computing power, accessed over the Internet, become your server and your data center. Among the clouds: inexpensive applications that users can access on demand from any location and through a variety of devices. Cloud computing—or SaaS, if you prefer—frees up budget for companies hand-cuffed by IT expenses. Instead of purchasing additional software licenses and hardware for new employees and new locations, businesses can simply open new employee accounts with providers of their cloud- based services to expand computing capacity. It ultimately helps CIOs rationalize their legacy systems and get their “arthritic IT” in order. This paper provides a snapshot of what is happening in the arena of cloud computing. What are the benefits? Why are businesses embracing it? What does it mean to a business owner or executive? How does it affect the workplace? What are the payoffs and the pitfalls? Is it really ready for "prime time"? 2 Copyright © CBS Interactive Inc. All rights reserved. February 2009. TechRepublic, ZDNet and BNET are registered service marks of CBS Interactive Inc. 235 Second Street, San Francisco, CA 94105, U.S.A. The Market Landscape The market for cloud computing applications is just beginning to heat up. Consumer applications, such as tax preparation services, sites to maintain photos and create albums, and social networking sites, have blazed the trail for successful SaaS business applications. As cloud computing matures, users are finding that it's much more than just a way to offload desktop applications to the Internet. Cloud computing enhances the framework companies need to foster greater cooperation and collaboration among their work teams—which As Computing Evolves, So Does its Jargon may include employees at multiple locations as well as Few observers agree on what cloud computing is, except for advisers, suppliers, and partners what the word cloud represents. When geeks draw network outside a company’s firewall. diagrams, they often represent the Internet as a cloud. In addition, cloud computing Cloud computing, many say, is a form of software-as-a-service. opens up innovative ways to use Wikipedia defines software-as-a-service (SaaS) as “a model of rich-media capabilities, such as software deployment where an application is hosted as a integrating video into documents service provided to customers across the Internet. By or presentations. Web-based eliminating the need to install and run the application on the applications make it easy to customer's own computer, SaaS alleviates the customer's publish the results of a single burden of software maintenance, ongoing operation, and source file in many locations. For support.” example, a chart containing “company results” can easily be The Economist noted that throughout the short history of shared in a memo to executives, modern computing, technology has evolved to more distributed a presentation to shareholders, forms—from mainframes, to minicomputers, to personal and in an announcement to computers, and now to hand-held devices and smart phones. employees. Any changes to the But now, states The Economist’s report, “Computing is taking on source spreadsheet automatically yet another new shape. It is becoming more centralized again flow to the multiple instances of as some of the activity moves into data centers. But more the published charts. importantly, it is turning into what has come to be called a ‘cloud,’ or collections of clouds. Computing power will become Mashups provide a quick way to more and more disembodied and will be consumed where and when it is needed.” aggregate business or consumer services with different data types Infoworld editors Galen Gruman and Eric Knorr wrote that from multiple sources into "cloud computing might be more accurately described as 'sky integrated applications. Many computing,' with many isolated clouds of services which IT map-based services integrate customers must plug into individually. ... the idea of loosely business data, such as real estate coupled services running on an agile, scalable infrastructure listings, with the mashup facilities should eventually make every enterprise a node in the cloud. It's a long-running trend with a far-out horizon. But among big of Google Maps or other megatrends, cloud computing is the hardest one to argue with in cartographic databases. Amazon, the long term." the world's most successful online shopping site, uses mashup technologies to aggregate product descriptions with partner sites and user profiles, commentaries, and images. Travel sites, such as Travelocity, Kayak, Matador, and Travature, integrate standard content (such as airfare search engines, travel guides, maps, and hotel reviews) with comments, ratings, and images from users. 3 Copyright © CBS Interactive Inc. All rights reserved. February 2009. TechRepublic, ZDNet and BNET are registered service marks of CBS Interactive Inc. 235 Second Street, San Francisco, CA 94105, U.S.A. In the business arena, cloud computing is gaining momentum as companies seek applications that are easier and cheaper to implement, use, and maintain. Providers are introducing a steady stream of cloud- based services for enterprise resource planning (ERP), web conferencing, data backup, and other key applications. Some cloud applications come from established companies, such as Salesforce.com, a leader in customer relationship management applications. These companies use cloud computing as a competitive weapon against old-line companies selling conventional products and services. Intacct, for example, is an on-demand financial management and accounting system. "A really interesting and perhaps counter-intuitive phenomenon is that there is a huge demand for SaaS services from enterprises that are firmly committed to the on-premise model," observed Phil Wainewright, ZDNet's SaaS expert. "Perhaps even more surprising is that IT departments are some of the most avid buyers of SaaS services — and they’re turning to SaaS to help them manage their on-premise infrastructure." Security services, email management and security, Help Desk and service management are among the applications that IT managers are handing over to external SaaS providers, Wainewright noted. Wainewright also points out that SaaS is a made-to-order antidote for shrinking capital budgets during economic downturns. He wrote: "... cash-strapped businesses will find the pay-as-you-go SaaS model highly appealing — especially if it helps deliver operational cost savings at the same time.” A survey by ScanSafe, a SaaS provider of security services, supports this thesis. The survey of 300 IT managers found that 78% of them believe economic uncertainty makes SaaS more attractive. The Clouds are Soaring • “By 2011, early technology adopters will forgo capital From Banking expenditures and instead purchase 40 percent of their IT infrastructure as a service,” states Gartner Group. “Increased Convenience to high-speed bandwidth makes it practical to locate infrastructure at other sites and still receive the same response times." Business • 69 percent of America’s Internet users are using some form of Productivity Internet-based computing, such as web-based e-mail or photo Long before the moniker storage, according to a study by Pew Research Center. • became popular, most By 2013, 12 percent of world software market will be Internet- Internet users have been based forms of SaaS and cloud computing, according to Merrill engaged in various types of Lynch. • cloud computing. For years, What impact will a long-term, global recession have on cloud people have banked online, computing? A survey by ScanSafe, a SaaS provider of security shopped online, prepared services, revealed that 78% of IT managers believe economic their tax returns online, and uncertainty makes SaaS more appealing. communicated using webmail • "A move towards clouds signals a fundamental shift in how we accounts—all without having handle information," writes Stephen Baker in Business Week. "At any database or software for the most basic level, it's the computing equivalent of the evolution these applications resident on in electricity a century ago when farms and businesses shut down their computers. their own generators and bought power instead from efficient industrial utilities." With so many people comfortable with personal forms of cloud computing, the migration to using it for business productivity was inevitable. Now that trend is gaining traction.
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