December 24, 2012
Volume XLII, Issue 2
A Look Back at Cloud Computing Trends of 2012
Excerpted from CloudTweaks Report by Rick Blaisdell
This year, the winds of change have blown the cloud to a higher level. Studies predict that cloud computing will be on the rise for some a long period of time and that it will be a major source of revenue and employment globally by 2015.
Industry experts also say that ultimately everything will be in the cloud, including the migration of all physical hardware, software, platforms, services, and processing.
There is no question that cloud computing evolved enormously this year.
In 2012, we've seen increased confidence in cloud for mission-critical applications, according to the second annual Future of Cloud Computing Survey.
Cloud-based business process management (BPM) is on the rise. About 40% of organizations with BPM initiatives use cloud computing to support at least 10% of the processes involved in those efforts, according to a recent research by Gartner.
The public cloud services market is growing faster than expected. IT researcher Gartner reported in September that the public cloud services market is now forecast to grow 19.6 percent in 2012 to total $109 billion worldwide.
Platform-as-a-service (PaaS) is being recognized as an enterprise-ready technology. Large enterprises are adopting the architecture due to its highly reliable and scalable qualities.
We've seen a leverage of cloud technologies in application development due to their speed, cost-savings, reliability and security.
There has been increased use and wider acceptance of hybrid clouds according to Delloite Tech Trends for 2012.
The cloud is becoming one of the best alternatives when it comes to support, monitoring, and data management. Infrastructure-as-a-service (IaaS) is lately one of the most needed and required cloud computing categories.
The cloud is taking big data analysis to the next level. With unlimited resources, the cloud allows huge datasets to be created and processed quickly and easily.
Cloud services are mixing. Companies started mixing IaaS and PaaS solutions to take advantage of both and to decrease their overall IT spend.
There is no doubt that in the coming years, cloud computing will be one of the major players and driving force in the technology market.
2012 Highlights: Social Collaboration & Integration
Excerpted from CloudTweaks Report by Abdul Salam
2012 has been a takeoff year for cloud computing, there have been no real major breakthroughs yet no setbacks as well, but that is not to say that the field has been asleep overall, we have seen a continued growth in terms of support and adoption including the emergence of new types of services being offered.
There have been a lot of improvements in the technology and also a lot of new directions taken that we have yet to see if they will lead to success or not. Let us take a look back a whole year at the state of cloud computing so far.
Wide adoption in media and entertainment — the cloud has proven its potential for the storage and delivery of media and entertainment elements mainly because of the introduction of high speed data communication standards like 4G and LTE. It has become easier to store, retrieve, and deliver media from the cloud. We are seeing a trend in consumer adoption of services like Dropbox, Box, Microsoft SkyDrive, Google Drive, iCloud, Netflix and Spotify. This may also be the reason why a lot of smart-phone manufacturers chose to remove the expandable memory options from their devices like Google's Nexus 4 by LG and the Nexus 7 tablet by Asus. HTC also did not include expandable storage on their new Droid DNA.
Emergence of new services in the SaaS space — what this means is that not only are we now storing and retrieving data from the cloud, we are now also embracing the possibilities of on-cloud processing. A very good example is On Live's game services, allowing gamers to play any PC or console game on their tablets and smart-phones via the cloud. We are also seeing a big adoption of Hosted Desktops which allows for workshifting and better business continuity solutions.
Social collaboration and integration — Social and cloud collaboration allows for applications that enrich the supply and demand chain of relationships which improve customer awareness and loyalty. It has allowed crowdsourcing of product designs and even allows start-up companies to achieve their goals through social collaboration sites like kickstarter.com. Facebook is the biggest social networking and collaboration site which now allows for better interaction between companies and consumers through various social marketing strategies like games and contests. All of these became easy and second nature due to cloud integration.
Mobile and location services and e-commerce — mobile and location services allows marketers to pinpoint advertisements and services wherever you are. For example if you are in downtown Detroit, a location service can point you to the nearest coffee shop or give suggestions for the best dining experiences in the area based on user reviews and social integration. It may even allow you to order food from a local fast food drive through a few blocks away through the cloud and pay electronically so that by the time you arrive, they will simply hand in your food, a literal drive through!
Surely business minded people will find new ways to monetize the cloud and bring better value service to consumers and the industry alike. I see no downside except maybe people getting lazier, but such is the future we are building ourselves.
Report from CEO Marty Lafferty
 The DCIA cordially invites all DCINFO readers to attend our third annual CONTENT IN THE CLOUD (CITC) Conference within the 2013 CES Show taking place at the Las Vegas Convention Center on Wednesday January 9th.
Join us for six insightful keynotes and four lively panel discussions highlighting the latest advancements in cloud-based solutions for content distribution.
Insiders will share how changes and progress in the cloud are revolutionizing data storage and delivery.
The effects are being felt across the consumer electronics (CE) industry, and it's only just begun!
At the 2013 CITC, we'll pay special attention to the impact of cloud-delivered, high-value entertainment on consumers, telecom industries, the media, and CE manufacturers.
Case studies will explore how cloud-based solutions are now being deployed for entertainment content storage and delivery — including successes to date and challenges that remain to be overcome.
Learn how the value proposition for CE manufacturers will continue to evolve towards providing cloud-based value-adding services — rather than conventional hardware features.
Sessions will also examine the effects on consumers of having access to media in the cloud anytime from anywhere — along with related social networking trends.
Some in traditional entertainment industries find this technology overwhelmingly threatening and disruptive — others see enormous new opportunities.
Our opening keynote by Microsoft's Dr. Jin Li will answer the question What Is Content in the Cloud, Really? How should cloud computing be defined? What are the key economic considerations and prospects for sustainability of the cloud-enabled delivery phenomenon?
Our first panel with Radio Mitre's Guillermo Chialvo, Arrayent's Shane Dyer, YuMe's Ed Haslam, Endpoint Technologies' Roger Kay, IC4's Theo Lynn, The PADEM Group's Allan McClellan, Phoenix Marketing International's John Schiela, and Trend Micro's Nicole Severino will discuss The Impact on Consumers of Implementing Cloud Computing for Media Access and Storage. How do cloud-based streaming and storage affect users' ability to access entertainment content and to own copies of movies, music, TV shows, games, etc.?
Our next two keynotes by GenosTV's Mike West and Dow Lohnes' Jim Burger will balance Consumer Benefits of Cloud-Delivered Content: Ubiquity, Cost, Portability Improvements with Consumer Drawbacks of Cloud-Delivered Content: Privacy, Reliability, Security Issues. What advantages do cloud-based solutions applied to popular entertainment bring to users? How do they compare to older methods of online distribution? What is the role of social networking in this arena? What has been the experience to date concerning confidential data being inadvertently leaked or intentionally hacked? What can users do to mitigate not having access to their applications or accidentally losing their data when they go offline? What happens if a cloud provider goes out of business?
Then a panel with Octoshape's Scott Brown, Strategic Blue Services' Rob Kay, Equinix's Jon Lin, KPMG's Mark Lundin, Aspera's Kip Schauer, Iris Media's Dr. Wolf Siegert, Citrix's Peder Ulander, and Devoncroft Partners' Joe Zaller will evaluate The Impact on Telecommunications Industries of Cloud Computing. What does cloud computing mean to broadband network operators in terms of managing their intellectual property (IP), allocating network resources, and developing and provisioning new services?
A follow-on keynote by Akamai's Kris Alexander will summarize Telecommunications Industry Benefits & Drawbacks of Cloud-Delivered Content: New Opportunities vs. Infrastructure Challenges. What advantages do broadband network operators gain with cloud-based solutions applied to popular entertainment? How does the on-demand, always-accessible nature of cloud-based entertainment delivery challenge conventional distribution systems?
The next panel with Front Porch Digital's Brian Campanotti, Playcast Media's Guy De Beer, American Standard Television's Ian Donahue, Rovi's Gerald Hensley, Wiredrive's Bill Sewell, Gaikai's Robert Stevenson, and Gracenote's Stephen White will consider The Impact on Entertainment Industries of Cloud Computing. What do cloud storage and distribution mean to content rights-holders in terms of managing their intellectual property (IP), realizing cost savings, reaching new audiences, analyzing usage, and implementing new business models?
Then a keynote by IBM's Scott Burnett will highlight the top-line Entertainment Industry Benefits & Drawbacks of Cloud-Delivered Content: Flexibility and Reach vs. Disruption and Accountability. What improvements does cloud computing offer the content distribution chain? What issues do rights-holders face in adopting their internal content management processes to cloud-based media storage?
Our final keynote by Huawei's Lucia Gradinariu will outline Consumer Electronics (CE) Manufacturer Benefits and Drawbacks of Cloud-Delivered Content: Expanded Opportunities for New Products and Recurring Revenue Streams; New Challenges Related to Interoperability and Data Security. What unforeseen impacts, both positive and negative, do cloud-based solutions applied to popular entertainment properties bring to CE manufacturers?
And then our closing panel with Altman Vilandrie & Company's Stefan Bewley, Coughlin Associates' Thomas Coughlin, Pioneer Corporation's David Frerichs, Youneeq's Murray Galbraith, New Media, Entertainment & Technology, Hughes Hubbard & Reed's Wayne Josel, IHS Automotive's Dr. Egil Juliussen, and Navigation Solutions' Linda Senigaglia will explore The Impact on CE Manufacturers of Cloud Computing Deployment. Remotely accessing applications and data has implications for elements that must be integrated into networked end-user devices. What about servers and other edge storage hardware products? What new hurdles must be overcome with these technological solutions?
To register for CONTENT IN THE CLOUD at CES, please click here. Share wisely, and take care.
Cloud-Based DVRs Rival OTT STBs
Excerpted from MediaDailyNews Report by Wayne Friedman
The growing penetration of smart TVs, gaming consoles, and other technology could render over-the-top (OTT) set-top boxes (STBs) "obsolete." Still, multichannel TV providers' STB data continues to be a key attraction for TV advertisers.
These are some results from One Touch Intelligence (OTI), a Colorado-based market intelligence company, working for the Council for Research Excellence (CRE), a Nielsen-funded independent research group created in 2005.
Those OTT set-top boxes — Apple TV, Boxee, Google TV, Roku, Slingbox for example — haven't been selling well, and that's not a good trend. The report says: "Given the lackluster sales figures for some of these devices (Boxee and Google TV) and the quickly shifting sands in this market, it's difficult to see OTT STBs moving ahead of gaming consoles or smart TVs in the minds of consumers."
Right now, the national penetration of new media devices is led by gaming consoles at 56%; DVRs at 44%; Smart TVs and Blu-ray players at a combined 22%; tablets, 14%; and OTT STBs, 11%.
Another wrinkle could be the roll-out of newer "network" DVRs by multichannel TV providers, where DVR storage is transferred from an STB to the "cloud."
"It would not only boost smart TV penetration, but also would drive DVR penetration from its current level of 44% to effectively match the same penetration as digital set-tops," the report notes.
One of the main goals of CRE is advancing audience measurement methodology, including usage and viewing of new media devices. STBs are virtually omnipresent among all multi-TV channel providers, representing about 90% of US TV homes.
Patricia Liguori, Senior Vice President of Research and Electronic Measurement of the ABC Owned Television Stations and Chair of the CRE's Return Path Measurement Committee, stated: "Both the buy and sell sides have the expectation, and rightly so, that all devices on which tuning occurs — not just traditional television sets — be measured and ultimately used as ratings currency."
Consumer Streaming Outpaces Downloading
Excerpted from Home Media Magazine Report by Chris Tribbey
Seventy percent of American broadband users are watching professionally produced Internet video every week, averaging more than 100 minutes per week, and consumers spend nearly four times more time streaming content than downloading, according to a new survey.
The research from Cisco's Internet Business Solutions Group (IBSG) found that while free and ad-supported sites pull in more than 40% of viewers, 27% of online viewers said they would buy more video if it came with a reliable cloud service, such as UltraViolet.
Chris Osika, IBSG Senior Director and Global Lead, noted that among 18-to-24 year-olds, streaming video viewership rises to 94%, and overall, streaming video usage is about even with DVDs and Blu-ray Discs.
"While broadcast television still rules, 48% of consumers have increased their streaming of professionally produced video content in the past two years, making it the fastest-growing category of video use," Osika said. "Internet video streaming will continue to grow in the future; in our study, this is where the greatest number of consumers expect to increase their use."
As for cloud-based services such as UltraViolet, consumers will pay for content to own it if it's convenient, of high quality, works across devices and offers a broad selection.
"Seventy-four percent of Internet video viewers watch their favorite TV shows online at least weekly, and 42% watch every day," Osika said. "That exceeds movies (52% weekly and 12% daily) and is far ahead of music videos, sports and other events. Whatever the preference, a broad content library is a key incentive for consumers."
Telefonica & Indra to Provide End-to-End Cloud Services
Telefonica and Indra will offer joint cloud services and solutions to public administrations and large companies. The agreement was signed this week by Salvador Anglada, Business Services Managing Director at Telefonica, and Santiago Roura and Angel Vizoso, respectively Executive Vice President and Telecoms Market Director at Indra.
Cloud computing technology is key for companies to move forward, evolving towards shared virtual environments to increase IT infrastructure and application flexibility and efficiency, providing better returns on business. This is why Telefonica and Indra have joined forces to provide the best cloud services for institutions and businesses.
The agreement aims to offer global solutions to large companies allowing them to appropriately transform the applications supporting their business processes. The two companies will jointly provide an end-to-end service to transfer the applications and services on supporting IT infrastructures to the cloud.
Helping businesses to evolve their IT model is one of Indra's priorities, a global technology company at the forefront of cloud solutions thanks to its comprehensive Indra In-Cloud service where transforming applications is the key. Through this initiative, Indra will be providing its vast experience in consulting, application and infrastructure development and transformation projects, as well as application maintenance in the new environment
In turn, the global telecom company Telefonica will be providing Infrastructure Outsourcing services for full system outsourcing. The focus will specifically be on Datacenter Cloud services that provide a flexible tailored platform for businesses to have their own private space in the most secure environment to install all their business applications. Telefonica will also be responsible for user management, technology management and communications.
The agreement includes the creation of a group of experts from Indra and Telefonica to identify market openings and offer the perfect solutions for lowering IT costs in line with companies' business strategies.
Telefonica is one of the largest telecommunications companies in the world in terms of market capitalization and number of customers. Indra is the leading technology multinational in Spain and a leader in Europe and Latin America.
Volvo & Ericsson Jointly Connect Cars to the Cloud
Excerpted from EETimes Report by Christoph Hammerschmidt
With Long Term Evolution (LTE) in the starting blocks and the Connected Car increasingly taking shape, new alliances are in the offing. Volvo Car Group and Ericsson now have announced that they plan to jointly advance the technical development of innovations for automotive Internet services.
To the joint efforts, Volvo will bring its expertise in driver behavior and traffic security requirements while Ericsson will contribute its consulting and systems integration.
Both companies plan to conjointly build the ecosystem around the connected car. The solution covers all Volvo Cars markets around the globe and is run as a Managed Service by Ericsson. Drivers will be able to download applications, create an on-line service booking, and interact with partners through the Connected Vehicle Cloud built on Ericsson's Service Enablement Platform.
The partnership is focused on the rapid development of Volvo Cars' stand-alone scalable product architecture (SPA). However, connected car services will roll-out in all new Volvo cars beforehand in order to position Volvo Cars with sophisticated solutions and services.
4 Cloud Predictions for the Year Ahead
Excerpted from Forbes Magazine Report by Antonio Piraino
The cloud has become a well-used buzzword, but for good reason. Cloud computing strategies have provided organizations with many benefits in 2012, especially as budgets, products, and applications were set aside for both public and private cloud investments.
However, despite the fact that companies have begun to embrace the cloud and move toward serious implementations, we are in the midst of a rapidly changing market. Below are a few predictions on the cloud computing front for the year 2013.
1. The cloud wars are still rumbling, and they're getting louder.
Today, Microsoft, Amazon Web Services, and Red Hat offer their own cloud infrastructure-as-a-service (IaaS) models. Additionally, there is a growing list of platform-as-a-service (PaaS) providers (Google, Facebook, etc.), as well as hosting providers, hedging to be the future default cloud platform. Overall, we are seeing more and more evidence from large enterprises that their choices are becoming less based on the underlying network, storage, or service infrastructure, and more to do with the peripherals and overlay services onto that IT infrastructure. The head-to-head scrimmaging among these cloud giants is just gathering steam, and the real battle will unfold in 2013.
2. A titanic cloud outage will create a domino effect.
As more IT resources are moved to the cloud, the chance of a major outage for a corporate enterprise — or worse, a major financial entity — becomes exponentially more likely to occur. Unfortunately, the outage itself doesn't have to be an elaborate one to yield devastating results.
For example, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), among others, have proposed regulations that require any data analytics tool used on the $601 trillion swaps market to be pre-screened or made searchable by the CFTC. This means any proprietary programming information, unique to a company with a financial services customer, is in danger of being exposed to a federal agency and made public. If an unexpected cloud outage were to take place within the context of these trades, the banks would stand to be heavily penalized for incompliance. In return, the banks could sue their technology vendor for offering products that are noncompliant, costing millions, if not billions, of dollars.
3. A changing role for the CIO.
As the use and demand for cloud computing grows, governments will become more involved in its regulation, creating a worldwide opportunity for CIOs. Their job descriptions will soon require they act as international power brokers, ambassadors, and even diplomats. Required to negotiate services maintained by a few back-end infrastructure specialists, the CIOs' human responsibilities will shrink and their larger legal, financial, and security-related responsibilities required will grow exponentially.
4. Death of the desktop as we know it.
In 2012, Intel CEO Paul Otellini announced plans to step down, perhaps in part due to the company's struggles in the mobile market; meanwhile, Microsoft threw its hat into the tablet space, marking the tipping point for innovation on the desktop. And bring-your-own-device (BYOD) went from a craze to a smart business decision. So what does this all boil down to in 2013?
The expectation is that employees' mobile devices are now their workspaces, and that they are accountable for contributing to work on a virtually full-time basis. In 2013, the perceived potential of virtual desktops will finally become a reality via more powerful application, memory, and IO capabilities of smart-phones. There will be a significant shift from a centralized cloud environment to an extraordinarily decentralized operating environment. Datacenters will be rendered as access points for long-tail storage accumulation of structured and unstructured data that will be increasingly difficult to compress.
So is it all doom and gloom for global cloud providers and industrious enterprise users looking to exploit the benefits of cloud? No, but there are many intricacies of cloud computing that CIOs and IT will need to consider in order to ensure its full benefits can be realized in 2013.
Clear Advantage of Cloud Computing & BYOD Combo
Excerpted from SearchCloudComputing Report by Fernanda Aspe
The bring-your-own-device (BYOD) trend finds itself at a tech crossroads. While end users are the first to embrace it, business managers and IT administrators remain skeptical about security and compliance implications. Since the benefits of BYOD are too tempting to ignore, IT teams must implement protocols to protect against problems mobile devices can cause and to reap the full advantages of cloud computing in the enterprise.
But how can enterprise IT make two new technology forces — cloud computing and BYOD trends — exist without disruption in companies? These frequently asked questions offer expert insight and answers to give you a better understanding of how BYOD works with cloud, how to manage mobile devices in the enterprise and how to secure enterprise data. We also provide ideas on ways to tweak your corporate program and optimize your cloud environment to ease tensions in what is becoming a BYOD world — whether IT departments want it to or not.
What should I consider when creating or updating corporate BYOD processes?
Whether or not your enterprise has embraced the BYOD trend, your end-users have. Therefore, instead of ignoring it, IT teams must create a formal BYOD program.
Your BYOD program must define support processes employees have to follow in order to work from a mobile device within the corporate network. Security is a priority, so define rules for accessing corporate applications, including whether any apps are off limits, and require passwords and key locks if necessary. Organizations must also address acceptable use policies and implement tools that identify malicious breaches in order to stop them from being introduced into the enterprise.
To best protect end-users and the enterprise, mobile security must go beyond the device.
How can I create a BYOD-compatible cloud computing strategy?
First, ensure that cloud application interfaces are exclusively thin-client technologies while making certain all devices within your environment support those apps. All applications must be exposed using URLs. This helps you build mobile device interfaces using web-authoring tools. Remember, however, that not all browsers are the same when building a browser-based BYOD cloud strategy.
For browser support of applications, have an agent process (which is software that resides on the server and acts on behalf of the browser) access individual URLs. Finally, create a single virtual application for the end user once cloud processes are assembled.
Why is it important to ensure mobile security extends beyond a device?
To best protect end-users and the enterprise, mobile security must go beyond the device. It should start with on-device protection that includes anti-malware, a firewall, strong passwords, lock-out procedures, and remote data wiping if there are multiple failed logins. Using gateways between mobile devices and the enterprise network is also essential. It is imperative for IT to ensure that the cloud provider offers centralized security in the cloud when end users use mobile-based applications to access corporate data.
Mobile device management (MDM) tools extend cloud security policies to mobile devices, which helps to centrally secure devices in a cloud environment. Additionally, you might want to use hypervisors to separate personal data from corporate data and allow remote wiping in case a device is lost or stolen.
Can cloud really quell BYOD security concerns in the enterprise?
The short answer? Yes. There are companies that provide security-as-a-service cloud products to secure mobile devices in the BYOD world, such as those from companies like Barracuda Networks, Sophos, and Zscaler. Automation is key. MDM services help IT centralize security and provide more efficient management over a range of mobile devices.
Further, IT pros can use cloud-based anti-malware services to further uncomplicate their lives. Such services scan data before it ever reaches a mobile device; the network is better equipped to handle threats, and the cloud offers a faster, more agile way of dealing with security threats. Using cloud services, organizations can respond faster if a device is lost by locking down or remotely disabling the device. They can also focus on how to encrypt information and find ways to authenticate both the end user and the device.
As an IT admin, you'll make your life easier by enforcing compliance policies within your company. While end users tend to be aware of security risks, that doesn't mean they are always compliant. For example, end users may disable the security features that come with the device, such as passwords and key locks. With a strong BYOD policy in place, you can mitigate the risks that may arise and take full advantage of cloud computing benefits.
5 Cloud Computing Trends Will Be Big in 2013
Excerpted from MIS Asia Report by Bernard Golden
This has been a curious year for cloud computing. The technology has moved into mainstream consciousness, but many vendors remain frustrated with the pace of enterprise adoption. While widespread agreement about the importance of cloud computing is present, many vendors see enterprises pursuing internal cloud implementation projects with a slow pace. As you can imagine, vendors are impatient with this pace-but not as frustrated as early-stage investors in those vendors.
Notwithstanding, I expect 2013 to be an inflection point for cloud computing, although not in the way many IT organizations or vendors do. You can expect that cloud computing trends of 2012 will become more vivid in 2013 and will prove disconcerting to incumbents, no matter which side of the vendor/buyer table they sit on. Cloud computing will prove more disruptive to the established order of things than almost anyone anticipates, and it will prove to be extremely uncomfortable for many.
Here are five things to look for in 2013.
1. The Phrase 'Enterprise Cloud' Goes From Market Prediction to Drinking Game
This year, I've heard vendors make countless number of confident predictions about the importance of the "enterprise cloud" — once enterprises realize that their old trusted vendors have bright shiny cloud products in stock, they'll start buying like mad.
The sotto voce in this is the belief, or hope or wish, anyway, that presenting customers with an "enterprise" offering will then curtail their dalliance with Amazon Web Services. It's like a spurned spouse waiting for the lure of home cooking to bring their wandering partner back home.
This will be a put-up-or-shut-up year for the attractive powers of enterprise cloud computing. December 2013 will find many incumbent vendors standing in the doorway, listening anxiously for the footsteps of wayward customers. By the end of the year, people will recognize that just repeating the phrase "enterprise cloud" is insufficient as a vendor strategy.
It's critical to understand that differentiation exists in the mind of the buyer, not the mind of the seller. Cloud service providers will need to understand the motivations of buyers and will also need to understand that many cloud buyers are different from traditional enterprise buyers — they may work in enterprises, but they don't have the same needs or goals as their counterparts. Proffering a product with the traditional functionality, language, and selling approach to this new type of buyer is pointless.
In 2013, I expect "enterprise cloud" to be a meme that moves from a market segment description to a drinking-game meme. Every time you hear it, you have to take a sip of your beer.
2. Enterprises Realize That Cloud Computing Means, Well, Cloud Computing
One big realization on the part of enterprise IT groups this year has been that business unit adoption of public cloud computing isn't going to go away. Many, however, continue to implement internal clouds that are little more than warmed-over virtualization, with the expectation that once the internal offering is available, it will become the default choice of developers.
Next year will bring the recognition that developers have embraced public cloud computing because of its speed and agility. Enterprise IT groups will then comprehend that internal offerings have to meet the much higher expectations of developers — expectations raised by what they now recognize is possible. Internal IT groups will confront the reality that warmed-over virtualization isn't nearly enough — and getting to public levels of agility will require process streamlining and end-to-end automation. In a word, it will mean re-engineering, which is much more difficult than buying a new product with the expectation that it will magically make one's private cloud as attractive as the public alternatives.
Expect to see many, many articles next year on the organizational change necessary to successfully implement private cloud computing. If you're implementing a private cloud and haven't thought through how you're going to integrate end-to-end automation and remove process roadblock, you have a problem. A big problem.
3. The Public CSP Business Will See a Pricing Bloodbath
The recent tit-for-tat storage price battle between Google and Amazon, key to the first AWS Re: Invent conference, is just a warm up for 2013. Next year will see ferocious price competition as cloud services providers (CSPs) attempt to blunt Amazon's growth. Even those that have heretofore eschewed price competition will have no choice but to jump into the fray.
For example, Hewlett-Packard, which not that long ago said "the notion of just standing up a virtual machine (VM) for raw compute is kind of done" and promoted the importance of a cloud ecosystem, this week launched its OpenStack-based cloud service with a pricing structure that undercuts Rackspace by a third. That's not exactly the mark of a provider focused on value-added services.
We'll see plenty more of these price wars as CSPs recognize platform wars are a market share land grab. The winners turn into monopolies and the losers slink off the field. However, as Warren Buffett so memorably says, "Only when the tide goes out do you discover who's been swimming naked." Translation: pricing wars are going to show who's really prepared to be a volume player in cloud computing.
Next year, cloud providers will come to understand that cloud pricing is a marginal cost-yield management exercise; efficient design, low-cost operation, and, crucially, high utilization are fundamental to success. Land grab economics favor CSPs with access to significant capital. Expect those with access to pursue that advantage. It's no accident that Amazon recently sold $3 billion in bonds. It's arming for the battle.
One can expect real dislocations in the CSP industry as players have to rethink their business plans based on lower revenue streams, including some who conclude that being a cloud provider is a never-ending money pit and decide to exit the industry. We've already seen a couple of departures: the high-profile GoDaddy and the lesser-known Harris, which exited after reportedly spending $100 million on a cloud infrastructure.
They won't be the last. Look for a real bloodbath in the CSP industry next year-but realize that, for customers, this bloodbath will pay enormous dividends in lower costs.
4. Hybrid, Heterogeneous Cloud Computing Comes to the Fore
Next year will bring home the fact that enterprises are never going to settle on a single cloud technology or provider. By definition, enterprises are complex, heterogeneous technology environments. They collect multiple products in a given technology category the way others collect bottle caps or old magazines: Randomly and irrationally. Even if a given enterprise resists the urge to buy one of everything, its nice, neat, homogeneous environment gets spoiled the instant the CEO decides to buy another company that inevitably, standardized on a different product.
Many IT organizations and CSPs have hoped that the world would standardize on a single technology — most commonly, one based on VMware — but that's just not going to happen. The reality for every enterprise of any size is that it will use multiple cloud technologies spread among multiple deployment environments, with those technologies all providing different orchestration software frameworks, heterogeneous APIs and single-purpose management infrastructures.
The task for enterprise IT for 2013 is to comprehend this fact and develop plans to implement a management framework that can span all cloud environments in use. Key requirements include consistent identity management, common monitoring, a management platform that provides a single pane of glass to control all cloud environments, and common billing (more on that in a moment). Expect to hear lots in 2013 about cloud management or cloud broker products, which sit above multiple cloud environments and provide these key requirements.
Just as Esperanto has the beauty of logic but fails in the reality of a polyglot world, so, too, will the fantasy of a single cloud technology environment used everywhere confront the messiness of the typical enterprise IT world. Once one accepts life will never live up to an idealized vision, then one can get on with the real job of dealing with things as they really are.
5. Cloud Spend Management Comes Down to Dollars and Sense
Next year will also bring home the financial implications of enterprise adoption of pay-as-you-go pricing. The negligent habits typical of enterprise system management, in which utilization rates still commonly hover in the mid-teens, carry heavy financial burdens in today's cloud world. The upfront capital investment practices of traditional IT paper over scandalous financial practices — can anyone imagine running an automobile factory at 15 percent utilization? — but the sunk cost and lack of ongoing payment pain make it easy to ignore waste.
Not so in public cloud environments, where every month brings a reminder of the cost of running systems. Many companies are now spending tens of thousands, or even hundreds of thousands, of dollars per month with AWS. Those numbers draw the attention of upper management. Questions will inevitably arise: "What are we doing to spend so much? Is there some way to detail what we're spending and whether we're getting our money's worth?"
While Amazon does its best regarding billing, enterprises running complex application environments — dozens of applications, deployments for development, testing, load testing, staging, and production for each app, and multiple versions of each application — clearly find the current state of AWS billing inadequate.
Look for 2013 to be the year for cloud spend management solutions to become a big deal. (To be clear, these are systems designed to manage the amount of money you're spending on running your cloud-based applications, not cloud-based spend management applications such as Ariba.) These systems track what you spend, identify under-utilized servers, and make recommendations on different deployment arrangements that can save you money. They don't help you operate your applications to be elastic in the face of variable demand — that's the job of cloud management software — but they can help you make sure you aren't wasting money on overprovisioning servers or not choosing spending plans wisely.
Overall, 2013 Will Be a Year of Transition, Change
We are in the midst of a multi-year shift from traditional static compute environments based on inefficient asset ownership to a new form of agile environments based on infrastructure rental accompanied by careful operation. Next year will be the year in which this transition reaches a point where the discussion shifts from "It's not like what I've currently got and doesn't have the advantages my current environment brings" to "It's not like what I've got, and thank goodness, because it doesn't come with all the drawbacks my current environment has."
In every innovation, at a certain point the weight of the evidence becomes overwhelming. Early adopters are vindicated, mainstream users are convinced and diehards fall back into the distance, their cries of "It's not good enough!" dwindling to an inaudible whimper. Every new platform solves the shortcomings of the previous generation platform. Every new platform also brings its own drawbacks.
Cloud computing is no different. It's powerful and innovative, but it has blemishes of its own. However, 2013 will be the year that we start addressing the real drawbacks of cloud computing-the challenges of scale, complexity and change-rather than fixating on its supposed drawbacks such as security, compliance and service level agreements (SLAs).
IT Ops Must Rethink Their Approach to Private Cloud
Organizations of all types are attracted by the promises of private cloud computing, but few actually have the virtual maturity to be successful.
This Forrester report reveals the latest virtualization trends so you can see how far your peers are in their journey to the private cloud.
Read on and discover best practices for improving virtualization in order to prepare for the cloud.
Global Government Cloud Computing Market Forecast
TechNavio's analysts forecast the Global Government Cloud Computing market to grow at a compound annual growth rate (CAGR) of 6.2 percent over the period 2012-2016.
One of the key factors contributing to this market growth is the need for reduced total cost of ownership. The Global Government Cloud Computing market has also been witnessing the emerging hybrid approach to cloud solutions. However, increasing concern about data security could pose a challenge to the growth of this market.
TechNavio's report, the Global Government Cloud Computing Market 2012-2016, has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the Americas, and the EMEA and APAC regions; it also covers the Global Government Cloud Computing market landscape and its growth prospects in the coming years.
The report also includes a discussion of the key vendors operating in this market. The key vendors dominating this market space are Amazon, Google, IBM, Microsoft, and Salesforce.com.
The other vendors mentioned in the report are Cisco Systems, NetSuite, Oracle, Rackspace, Verizon, VMware, AT&T, CA Technologies, and Infor Global Solutions.
Key questions answered in this report: What will the market size be in 2016 and what will the growth rate be? What are the key market trends? What is driving this market? What are the challenges to market growth? Who are the key vendors in this market space? What are the market opportunities and threats faced by the key vendors? What are the strengths and weaknesses of the key vendors?
You can request one free hour of analyst time when you purchase this report. Details are provided within the report.
TechNavio's research portfolio in the Enterprise Computing series includes reports on the ERP market, CRM market, enterprise software market, supply chain management market, web analytics market, enterprise applications market, mobile device management market, SOA market, electronic health record market, records management market, and workforce management market.
Healthcare Cloud Computing Market Forecast
MarketsandMarkets conducted a study on the Healthcare Cloud Computing (Clinical, EMR, SaaS, Private, Public, Hybrid) Market — Global Trends, Challenges, Opportunities & Forecasts 2012 — 2017, which analyzed and studied the major market drivers, restraints, and opportunities in North America, Europe, Asia, and the rest of the world.
The cloud computing market in healthcare is estimated to grow at a CAGR of 20.5% from 2012 to 2017. Healthcare organizations are required to stretch their limited budgets to meet increasing product and service demands, while complying with new regulations and healthcare reform legislation.
Many healthcare organizations are also struggling to manage and optimize their complex IT systems so that patients and physicians can be provided instant online access to information, products, and services through their desktops and mobile devices for faster healthcare delivery.
All these requirements have driven healthcare organizations towards adoption of cloud technology and are expected to contribute to its growth in the near future.
The market in 2011 was dominated by Non-Clinical Information Systems, contributing the largest share, although the market for Clinical Information Systems is expected to grow at a higher CAGR of 27.1% from 2012 to 2017.
Cloud technology has been adopted only in certain regions of the world, the majority share being held by the developed nations. This adoption is a reflection of the technological advancements in these countries.
The developing nations, on the other hand, are still struggling to introduce basic technological advancements uniformly across their respective countries and would later turn to cloud adoption. Healthcare is one of the laggards with respect to adoption of technology and hence the factors affecting the growth of this market are influenced by factors unique to each nation.
North America accounts for the lion's share in the cloud computing market, with the US being the largest contributor to this region. Europe's share is expected to decrease to 16% by 2017 due to the lack of government regulations as stringent as that of the US and since the healthcare industry has been latent to adopt technology. North America is expected to grow at the highest CAGR of 23.8%.
The report also studies the growth strategies adopted by companies between April 2009 and May 2012. Players in this market aim at increasing awareness of the benefits of using cloud computing in healthcare in order to expand their global footprint and increase market share.
New product developments, agreements and collaborations, mergers and acquisitions, followed by other developments are some of the major strategies adopted by players to achieve growth.
The cloud computing market is highly fragmented. Players such as ClearDATA Networks, athenahealth, Cisco Systems, Dell, Agfa HealthCare, VMware, Carestream Health, Microsoft, and Hewlett-Packard are focusing on agreements and collaboration, and mergers and acquisitions.
Let's Not Repeat Mistakes of Web History in the Cloud
Excerpted from InfoWorld Report by David Linthicum
I'm often told by those in the cloud computing industry that the rise of cloud computing is a new, unique phenomenon. I'm not sure that's completely true.
I've often pointed out in this blog that the rise of cloud computing has some parallels with the rise of the web and the technology created to support the web in the 1990s. There were clear mistakes made back then, and it appears that some of us are doomed to repeat them.
The more obvious potential repeat is the pushback on cloud computing based on claims it is a fad and a security threat. This results in delayed acceptance and planning activities. Deja vu: Many companies in the 1990s viewed the rise of the web as a flash in the pan or something that would not last, as well as a "security threat." They did not embrace the web or the emerging value of the technology.
As a result, many organizations ended up playing catch-up when they finally understood the potential of the early web. However, many never made up that ground and suffered greatly as a result. Some even lost their market — for example, newspapers, magazines, and bookstores.
Today, many people are pushing back on cloud computing as trendy and unsecure. Many of the Global 2000 companies refuse to even look at cloud computing technology. Moreover, many larger technology providers have done a poor job of retooling for opportunities around cloud computing.
I believe those same companies will end up playing catch-up in the next few years — and many won't ever narrow the gap. It will be ironic and sad if the same company makes the same mistake twice, first in the web and now in the cloud.
This is not to say that cloud computing is all that and a bag of chips. It's just another opportunity to do more with less, using better technology. The rise of the web 20 years ago also provided us with a new platform.
The traditional web was primarily a standard mechanism for content distribution, providing an effective and inexpensive technology that replaced technology that was neither. In the same regard, cloud computing is proven to be a standard approach for using applications and infrastructure that's also proven to be effective and inexpensive.
There are obvious parallels, and we need to make sure we don't make the same mistakes twice.
Coming Events of Interest
2013 International CES - January 8th-11th in Las Vegas, NV. With more than four decades of success, the International Consumer Electronics Show (CES) reaches across global markets, connects the industry and enables CE innovations to grow and thrive. The International CES is owned and produced by the Consumer Electronics Association (CEA), the preeminent trade association promoting growth in the $195 billion US consumer electronics industry.
CONTENT IN THE CLOUD at CES - January 9th in Las Vegas, NV. Gain a deeper understanding of the impact of cloud-delivered content on specific segments and industries, including consumers, telecom, media, and CE manufacturers.
2013 Symposium on Cloud and Services Computing - March 14th-15th in Tainan, Taiwan. The goal of SCC 2013 is to bring together, researchers, developers, government sectors, and industrial vendors that are interested in cloud and services computing.
NAB Show 2013 - April 4th-11th in Las Vegas, NV. Every industry employs audio and video to communicate, educate and entertain. They all come together at NAB Show for creative inspiration and next-generation technologies to help breathe new life into their content. NAB Show is a must-attend event if you want to future-proof your career and your business.
CLOUD COMPUTING CONFERENCE at NAB - April 8th-9th in Las Vegas, NV.The New ways cloud-based solutions have accomplished better reliability and security for content distribution. From collaboration and post-production to storage, delivery, and analytics, decision makers responsible for accomplishing their content-related missions will find this a must-attend event.
CLOUD COMPUTING EAST 2013 - May 20th-21st in Boston, MA. CCE:2013 will focus on three major sectors, GOVERNMENT, HEALTHCARE, and FINANCIAL SERVICES, whose use of cloud-based technologies is revolutionizing business processes, increasing efficiency and streamlining costs.
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