September 9, 2013
Volume XLV, Issue 3
Enterprise Cloud Computing Poised for Explosive Growth
451 Research released its latest cloud computing study, which projects explosive growth in the number of enterprise cloud computing projects over the next two years.
Conducted during the first half of 2013, the semi-annual study identifies the key cloud computing initiatives of leading organizations while examining market factors and major players.
Highlights from the Cloud Computing Study include:
Sixty percent of respondents view cloud computing as a natural evolution of IT service delivery and do not allocate separate budgets for cloud computing projects. Of those that do have separate budgets for cloud computing, 69% expect their spending to increase in both 2013 and 2014 compared with the prior year.
While internal, private cloud projects still dominate cloud-related activity cited by 35% of respondents, in just the past six months, IaaS and SaaS activity has doubled to between 30% and 33% of the projects mentioned.
Despite the increased cloud computing activity, 83% of respondents are facing significant roadblocks to deploying their cloud computing initiatives, a 9% increase since the end of 2012. IT roadblocks have declined to 15% while non-IT roadblocks have increased to 68% of the sample, mostly related to people, processes, politics and other organizational issues.
Regulatory and compliance issues are essentially "pass/fail" criteria for public cloud provider selection, but security remains paramount as the biggest pain point for IT professionals implementing cloud computing projects.
Established vendors Microsoft, VMware, and Amazon lead the list of exciting vendors and technologies, followed by OpenStack, which has gained significant market traction in the past year and looks poised to challenge the existing status quo as the enterprise cloud market develops. The cloud market is still a nascent opportunity with a very long list of vendors large and small coupled with open source and other market initiatives are getting the attention of IT strategists.
At the cloud technology level, cloud platform/orchestration stacks lead the "Heat Index," followed by cloud performance management/monitoring and virtual private cloud-based IaaS as the top greenfield opportunities offering the biggest upside opportunity for vendors in the next two years.
"As organizations are completing their transition to a virtualized data center infrastructure, their focus is switching rapidly to cloud computing projects," said Peter ffoulkes, 451 Research Director for Cloud Computing.
"Despite this shift of attention and the associated growth opportunity, there are major roadblocks, but for the most part, they are not technology related and fall within the domain of people, process, policy and organizational issues, which are more complex for vendors to address."
Research Director and report author Peter ffoulkes will host a Cloud Computing Poised for Explosive Growth webinar on September 17th at 2:00 PM ET to discuss the report's findings. Register here.
Cloud's Future Looking Bright
Excerpted from WhaTech Report
The prospects for cloud service providers look pretty rosy with almost 50 percent of executive level respondents to an IDG survey saying they believe that cloud will be transformational to their business strategies. Forty percent had their IT staff investigating the potential of cloud and only five percent saw no use for cloud services.
It was clear from the survey that respondents believed cloud could have a significant positive impact on their businesses. Fifty six percent said it accelerated business value by providing access to critical business data and applications. Similar numbers cited cloud as a catalyst for IT innovation and for greater employee collaboration.
IDG's survey, via email, of readers across a swathe of its US magazine websites - CIO, Computerworld, CSO, InfoWorld, ITworld, and Network World - elicited almost 1,400 responses, 58 percent of them from executive IT roles and 17 percent from mid-level IT roles. Enterprises responding to the survey said they spent 44 percent of their IT budgets on cloud computing and expected this to increase to 51 percent by 2015.
IDG's goal was "to measure cloud computing trends among technology decision-makers including usage and plans across various cloud service and deployment models, investments, business drivers and their impact on business strategy and plans."
Fifty nine percent of respondents said they were still identifying those parts of their IT operations that were candidates for being moved to the cloud. Thirty three percent said they had completed this process and were comfortable with their level of cloud usage "given the state of current cloud offerings."
Sixty nine percent of respondents said they were using private cloud, 59 percent public cloud and 28 percent community cloud. Significantly all indications were of significant rises in the use of all these services over the next 18 months. On average, respondents said they had 28 percent of their IT operations in private cloud and expected this to rise to 36 percent within 18 months. For public and community cloud the figures, respectively, were 14 percent rising to 20 percent and eight percent rising to 11 percent.
"There has been a considerable uptake of hybrid cloud services across growing businesses and mid-size market," said Bennett Oprysa, CEO at BitCloud. "As executives realize the power of cloud, more and more IT projects are seen in a different light and cloud is part of the formula. Companies see hybrid cloud as the best of both worlds across security and the effective use of IT resources both existing and new," Oprysa said.
The most popular applications for transferring to cloud services were collaboration and conferencing, e-mail and messaging and CRM/sales force automation. A significant number of organizations said they were planning to move these to the cloud over the next 12 months. Thirty eight percent said they currently use cloud for collaboration and conferencing and a further 20 percent plan to do so in the next 12 months. For email and messaging the figures were 35 and 22 percent and for CRM/SFA, 26 and 23 percent.
Respondents seemed reasonably confident about the security of their information in the cloud. Seventy three percent said they were 'very' or 'somewhat' confident and only 18 percent said they were 'not very' or 'not at all' confident. However IDG did not break this down between confidence in private cloud versus confidence in public cloud and, as the survey results were published on June 27th, it is likely that the survey took place before the PRISM story broke on June 6th.
Report from CEO Marty Lafferty
 We're very pleased to announce the next wave of exhibitors for CLOUD COMPUTING WEST 2013 (CCW:2013), featuring industry leaders Aspera as a Platinum Sponsor; Oracle Communications and Savvis as Gold Sponsors; A10 Networks, Citrix, SoftServe, TransLattice, and VASCO as Silver Sponsors; and ABI Research as a Marketing Partner.
CCW:2013 is the Cloud Computing Association's (CCA) and Distributed Computing Industry Association's (DCIA) business strategy summit taking place October 27th-29th at The Cosmopolitan in Las Vegas, NV.
Keynote Speakers, Moderators, and Panelists include representatives of Amazon Web Services (AWS), AT&T Mobility, Comcast, Dell, IBM, Microsoft, Netflix, Rackspace, Sprint Nextel, DataDirect Networks (DDN), Dell SecureWorks, GenosTV, Intertrust Technologies Corporation, Las Vegas Sands Corporation, Master Control, The PADEM Group, Rafelson Media, Trend Micro, V2Solutions, and the author of 21st Century Television: The Players, The Viewers, The Money.
Delegates will be particularly interested in the fascinating demos and presentations of new services by this year's exhibitors.
Aspera is the creator of next-generation transport technologies that move the world's data at maximum speed regardless of file size, transfer distance, and network conditions.
As organizations turn to the cloud for improved efficiency and unprecedented scalability, Aspera enables data- and processing-intensive workflows with high-speed transfer available on-demand and maximum speed ingest and distribution of big data to and from cloud storage.
More than 1,700 organizations across a variety of industries on six continents rely on Aspera software for the business-critical transport of their digital assets.
Oracle Communications solutions span the communications industry landscape — from cross-channel customer experience and business and operational support systems, to network service and session delivery and control solutions — enabling service providers and enterprises to deliver and monetize innovative digital lifestyle services, build strong customer relationships, and streamline operations.
Savvis, a CenturyLink company, is a global leader in cloud infrastructure and hosted IT solutions for enterprises.
Nearly 2,500 unique clients, including more than 30 of the top 100 companies in the Fortune 500, use Savvis to reduce capital expense, improve service levels and harness the latest advances in cloud computing.
A10 Networks is the technology leader in Application Networking.
A10's flagship high-performance AX Series platforms offer solutions for three key markets: Application Delivery/Server Load Balancing, IPv6 Migration, and Cloud Computing & Virtualization.
With the AX Series, customers of all sizes benefit from application availability, scalability & performance; increased infrastructure efficiency and a faster end user experience.
Citrix transforms how businesses and IT work and people collaborate in the cloud era.
With market-leading cloud, collaboration, networking, and virtualization technologies, Citrix powers mobile workstyles and cloud services, making complex enterprise IT simpler and more accessible for 260,000 organizations.
Citrix products touch 75 percent of Internet users each day and it partners with more than 10,000 companies in 100 countries. Annual revenue in 2011 was $2.21 billion.
SoftServe is a leading global provider of high quality software development, testing, and technology consulting services.
The company is committed to bringing the best commercial software to independent software vendors and enterprises.
SoftServe combines its unmatched experience with best practices delivering SaaS/Cloud, Mobility and SDLC innovative solutions.
With an onshore/offshore delivery model, SoftServe collaborates with its customers helping them drive their business and differentiate themselves within their markets.
SoftServe has successfully completed over 2,500 projects for over 150 global companies.
Founded in 1993, SoftServe is head- quartered in Fort Myers, FL, with an award-winning development organization based in Ukraine.
TransLattice geographically distributes SQL databases and applications for enterprise, cloud, and hybrid environments to provide data where and when it is needed.
This new approach to enterprise infrastructure provides corporate-wide visibility while enabling data location compliance, significantly reduced deployment complexity and costs, and dramatically improved system availability and scalability.
VASCO is a world leader in strong authentication and e-signature solutions, specializing in online accounts, identities and transactions.
As a global software company, VASCO serves a customer base of approximately 10,000 companies in over 100 countries, including more than 1,700 international financial institutions.
In addition to the financial sector, VASCO's technologies secure sensitive information and transactions for the enterprise security, e-commerce, and e-government industries.
ABI Research, established in 1990, is a market intelligence company specializing in global technology markets.
Its unique blend of quantitative forecasting and trend analysis helps ABI Research to quantify the important markets of today, define the strategic technologies of tomorrow, and provide insight on how technology is adopted into vertical markets.
ABI's clients rely on its services to uncover key market metrics and trends that are compiled through a combination of hundreds of comprehensive stakeholder interviews per year, technical intelligence from teardowns, years of collective market experience, vendor contributed data and end user research.
This year's CCW:2013 themes are "Revolutionizing Entertainment & Media" and "The Impact of Mobile Cloud Computing & Big Data."
Two CCW:2013 conference tracks will zero in on the latest advances in applying cloud-based solutions to all aspects of high-value entertainment production and storage, as well as media delivery and analysis options; along with the growing impact of mobile cloud computing on this sector, and the related expansion of big data opportunities and challenges.
DCINFO readers are encouraged to get involved in CCA's & DCIA's CCW:2013 as exhibitors, sponsors, and speakers.
The CCA is handling exhibits and sponsorships. Please click here for more information.
The DCIA's role is to provide keynotes, panelists, and case-study presenters to participate in our comprehensive agenda of sessions in ENTERTAINMENT & MEDIA and MOBILE CLOUD & BIG DATA.
Please click here to apply to speak at CCW:2013. Share wisely, and take care.
Amazon Looks to Aggressively Expand its Web Services Business
Excerpted from Trefis Report
Amazon has been working on hiring IT engineers who can get top security clearance from the US government as it continues to bid against IBM for building out a private cloud for the CIA. The company is touting its early entry in the cloud computing market as a competitive advantage over IBM. But it is hard to believe that Amazon can do anything meaningfully different from IBM, which specializes in the IT business.
Whatever the case may be, there is little doubt that Amazon is getting quite aggressive in expanding its web services business to leverage the growing demand for cloud computing and support its razor thin margins. We believe that getting the CIA contract will boost Amazon's credibility and pave the way for more such deals. Although the growth in public sector IT spending has been low in the past few years, it is likely to increase as the economy picks up.
Amazon has priced its contract at around $148 million, which is a substantial amount when seen in the context of its web services revenues. About 15 such contracts will effectively double the segment's sales. Although the company has primarily catered to the private sector so far, there is meaningful opportunity in the public sector as well. IBM and Cisco have been involved in building out IT and networking infrastructure for governments around the world. About 20% of Cisco's overall revenues come from the public sector, and the company saw a growth of 5% in its US public sector revenues in Q3 fiscal 2013.
The global demand for web services is growing rapidly due to enterprises moving their IT infrastructure to cloud, rising Internet usage and growing e-commerce volumes. Federal and state governments are likely to adopt this shift, thereby opening growth opportunities for Amazon. Let's take a quick look at why web services business is important for the company.
Cloud computing, which is one of the main web services offered by Amazon, has seen rapid growth in the recent years. We expect this to continue as enterprises look to cut their IT infrastructure costs. Although the economy in the US is improving, Europe is still facing economic headwinds, and GDP growth in some of the emerging markets such as India and Brazil has slowed dramatically.
Many businesses can leverage Amazon's cloud computing business to lower their IT costs in order to create more room for interest payments. Besides being cost efficient, cloud computing's advantages include the availability of virtually infinite computation resources as well as scalability, faster deployment and implementation.
Research firm Global Industry Analysts estimates that the cloud computing market will reach $286 billion by 2018. This plays right into Amazon's hands. Due to its reliability, global reach and well recognized brand, the company can be at the forefront of this growth.
Despite the growing competition from Google and Microsoft, Amazon's solutions remain well ahead in terms of their support for all languages and the provision of unlimited capacity. If the company grabs even 10% of this market in the next 6-7 years, there can be 5-10% upside to our price estimate.
In the first quarter of 2013, Amazon registered growth of 22% which was primarily driven by its services segment that saw its sales jump by 45%. The story continued in the second quarter, also as enterprises continued to flock to Amazon.
Besides helping big businesses, the company's cost efficient web services are useful for young startups that may have cash restrictions. The aggressive ongoing price war between Google, Microsoft, and Amazon suggests that the company enjoys considerable margins on these services.
We believe that the growing popularity of these services will mitigate the negative impact of the costs associated with fulfillment centers that Amazon is opening to speed up the delivery of physical goods to customers.
As more online retailers spring up and traditional giants ramp up their online efforts, Amazon will have to make additional investments and may face risk of profit decline as its margins are already very low. Expanding web services can help mitigate this risk to a certain extent.
Our price estimate for Amazon stands at $280, implying a discount of 5% to the market.
The Best Cloud Computing Stocks to Buy Now
Excerpted from The Slant Report by Jeff Reeves
The practical realities of cloud computing for consumers vs. the investing angle of cloud stocks are very different. Jon Markman, editor of the Trader's Advantage investing newsletter, spoke with me recently about the space and how investors can best take advantage of this high-tech trend.
The big guys like Oracle, Hewlett-Packard, and SAP might sound like the most logical choices for cloud computing, but Jon says they just don't get it. Smaller stocks often have a better knack for adapting and zeroing in on smaller portions of the market — with great success.
One stock that Jon likes right now is WorkDay, a midsize company that provides human resources solutions. At $13 billion in market capitalization and a stock that just had its IPO about a year ago, it doesn't sound like Workday has given investors a lot to go on. But WorkDay's stock is up 56% since that offering, and has proven itself a powerful player in a short time.
Other stocks Jon likes are Cornerstone OnDemand, which helps with employee recruitment and training, and Examworks that helps provide medical panels and peer reviews in a digital age.
While you might think the big guys will simply buy out these smaller players and own the space, it doesn't always work out that way — and Jon says there is considerable upside ahead in the next few years for these fast-growing cloud computing stocks.
Check out the accompanying video on cloud computing stocks for more details.
Xbox One to Offer Game Streaming via Cloud Computing
Excerpted from GamingBolt Report by Ravi Sinha
One of the more intriguing and revolutionary features of the Xbox One and PS4 is their Cloud computing services Azure and Gaikai respectively. Each is taking a different approach but when speaking to GameSpot, Microsoft's Albert Penello revealed that the Xbox One's Cloud features could allow for the company to stream games.
When asked if they would follow Gaikai's lead in game streaming, Penello stated "Yeah, absolutely. That's one of the things that makes the cloud at the same time both totally interesting and hard to describe to people. Because what the cloud can do is sort of hard to pin. When you say to the customer, we want the box to be connected, we want developers to know that the cloud is there. We're really not trying to make up some phony thing.
"But there are so many things that the servers can do. Using our Azure cloud servers, sometimes it's things like voice processing. It could be more complicated things like rendering full games like a Gaikai and delivering it to the box. We just have to figure out how, over time, how much does that cost to deliver, how good is the experience."
Will it make backwards compatibility a possibility after all? We'll find out as the Xbox One nears its November 22nd global launch.
Oracle Introduces Government Cloud for North America
Excerpted from CloudTweaks Report by Blake Adams
Tech giant Oracle launched the Oracle Government Cloud today in the North American region with an aim to strengthen its connection with government agencies as the top cloud service provider.
The Oracle Government Cloud, in its essence, is an advanced form of the Oracle Cloud solution, delivering a broad and complete portfolio of public, private and hybrid cloud offerings.
Through a news release on its website, Oracle claimed that its new cloud solution is the "best-in-class" option available in the market that offers 'integrated capabilities across multiple service options' for government agencies.
Oracle's announcement comes on the back of the United States government's latest Cloud First policy which stemmed from the critical financial reality of the country, as the US looks to reduce the cost of management and maintenance of its IT-related operations.
In the news release, Oracle stated that by deploying an innovative solution in the form of the Oracle Government Cloud, government agencies would be capable of availing themselves more agility and options as they manage operations and deliver constituent services.
With packages like the Oracle Service Cloud, Oracle Right Now Policy Automation and Oracle Learn Cloud, these agencies would also be able to streamline a breadth of business processes, from financial and human resources management to customer service and project management.
Oracle also announced that it would soon make services like Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) available to its government clients on the cloud platform. In an interview with the Wall Street Journal, Adelaide O'Brien, Research Director of IDC Government Insights said that the announcement from Oracle holds deep significance in terms of the current landscape of cloud technologies in the government sector.
"With Oracle Government Cloud, Oracle provides government organizations with a secure, flexible platform that helps them realize new efficiencies, respond quickly to changes in legislation and policy and deliver excellent constituent service," he opined in the interview.
The Wall Street Journal also quoted Mark Johnson, Senior Vice President of Oracle Public Sector, who stated that: "We are very excited to meet our public sector customers' demands for a highly secure, robust suite of cloud solutions built for government."
"The maturity and transparency of the standards-based Oracle Government Cloud will enable agencies to confidently move mission-critical government applications to the cloud without compromising security, performance, or reliability," he added. "We are committed to helping agencies enhance operational efficiency through the cloud," the VP further said in the interview.
Forrester: Cloud Computing Drives IT Spending
Excerpted from Midsize Insider Report by Marissa Tejada
Cloud computing is on the list of top information technology (IT) spending priorities for the next year. According to Forrester Research, software spending worldwide will continue to grow with a big focus on the cloud. These worldwide trends reflect the focus of midsize firms.
The research featured recently in the CloudTimes found that, in the past year, companies and governments spent more than $2 trillion on hardware, software and services. In the most popular segment, software firms allocated budgets for improving mobile apps, analytics, security and collaboration software. Software spending increased last year by more than $540 billion; it is expected to grow 3.3 percent this year and 6.2 percent in 2014, the largest projection for technology categories.
The annual survey on worldwide IT spending also pointed out that companies will slowly stop investing in legacy applications, including desktops and servers, and will push their resources toward the cloud, software-as-a-service (SaaS) solutions, big data and mobile apps instead. Additionally, impressive spending is predicted for the tablet market. Forrester predicts a 36-percent surge in tablet spending for a turnover of $21 billion this year, with Apple, Samsung and Microsoft leading the way.
Forrester also highlighted that the US spends more on IT than the rest of the world. In the US, IT investment hit slightly more than $800 billion, and the research firm predicts this will increase to $875 billion by next year.
Forrester's IT predictions also reflect the way midsize firms are approaching their IT spending. More companies are beginning to realize the benefits of the cloud. Since enterprise implemented cloud solutions several years ago, new solutions that are specifically geared for the needs of midsize companies are readily available in the market. IT professionals at growing firms are working with vendors to implement the right cloud solutions for increased productivity, efficiency and cost savings.
The tablet revolution in conjunction with the rise of mobility is also apparent at growing firms. IT professionals are now responsible for devising bring-your-own-device (BYOD) policies to keep corporate data safe. As mobile devices and better mobile apps and services continue to infiltrate the market, IT professionals will be busy making sure policies are updated to keep corporate data as safe as possible.
Cloud, mobility and mobility tools are the priorities for IT professionals worldwide. As the basis for smarter computing, they are expected to be the main reason why companies will spend more on IT. When it comes to the needs of midsize firms, these technologies are helping to fuel growth and productivity, which is the main reason why Forrester's predictions will be realized.
Cloud Computing Continues to Take Hold in France
Excerpted from Rude Baguette Report by Trista Bridges
As reported in Journal du Net, IDC has released its annual study on cloud computing in France which reaffirmed the strong growth of the sector here. According to the study, the cloud computing market (both public and private cloud as well as cloud services) reached 1.96 billion euros in France, up 46% from 2011.
IDC anticipates that the demand for public and private cloud computing services will show little sign of abating, with the market hitting 2.65 billion euros in 2013 and accounting for 12% of enterprise IT spending.
The bulk of the market continues to come from public cloud services which grew its share of the total cloud market to 65.6% in 2012 and, according to IDC's projections, will exceed 67% of the cloud market in 2013, hitting 1.78 billion euros in value. They anticipate that this trend will continue into the foreseeable future with the public cloud growing to over 3 billion euros in 2015.
With all the concerns around the public cloud and security, these growth figures seems to suggest that while valid, privacy worries aren't limiting businesses' or individuals' appetite for cloud computing services (despite recent revelations around government spying).
Perhaps all the efforts that small and large cloud service providers have put into reassuring the market about the security of their solutions is starting to pay off.
Six Ways to Reduce Risk and Protect Data in the Cloud
Excerpted from The Guardian Report by Gretchen Marx
As traditional perimeters disappear, organizations need to adopt new measures to ensure data and devices are safe in the cloud
OK, I admit it. I wasn't always watching my kids demonstrate their athletic prowess on the field. Sometimes I had my laptop out and was working. Sometimes I was just watching the clouds go by.
One observation about those clouds — they were constantly morphing. They had no fixed edge as they billowed and blew across the sky.
That lack of an edge that clearly defines the cloud environment your organization may be considering sending your data to can make it seemingly difficult to protect. In fact, security is cited i in numerous studies as the number one inhibitor to cloud adoption.
Think about possible points of entry for an attacker in a cloud environment. A customer uses an insecure mobile phone to access your network … you can be attacked. A contractor on your network uses a web application that has an embedded vulnerability, a back door that is not protected … you can be attacked. A database administrator at the cloud provider shares a password with someone … your data can be breached. These represent just some of the scenarios that keep the chief information security officer awake at night.
Securing the security perimeter of the traditional data center was made relatively straightforward with the help of firewalls and intrusion detection systems. When we traded terminals for PCs, anti-virus software helped keep those devices safe.
With employees, customers, business partners, suppliers and contractors increasingly accessing corporate applications and data with mobile devices from the cloud, protecting the edge of the network is no longer enough. As the traditional perimeter disappears, here are six things to do to help ensure security in the cloud.
1. Know who's accessing what. People within your organization who are privileged users, — such as database administrators and employees with access to highly valuable intellectual property — should receive a higher level of scrutiny, receive training on securely handling data, and stronger access control.
2. Limit data access based on user context. Change the level of access to data in the cloud depending on where the user is and what device they are using. For example, a doctor at the hospital during regular working hours may have full access to patient records. When she's using her mobile phone from the neighborhood coffee shop, she has to go through additional sign-on steps and has more limited access to the data.
3. Take a risk-based approach to securing assets used in the cloud. Identify databases with highly sensitive or valuable data and provide extra protection, encryption and monitoring around them.
4. Extend security to the device. Ensure that corporate data is isolated from personal data on the mobile device. Install a patch management agent on the device so that it is always running the latest level of software. Scan mobile applications to check for vulnerabilities.
5. Add intelligence to network protection. The network still needs to be protected — never more so than in the cloud. Network protection devices need to have the ability to provide extra control with analytics and insight into which users are accessing what content and applications.
6. Build in the ability to see through the cloud. Security devices, such as those validating user IDs and passwords, capture security data to create the audit trail needed for regulatory compliance and forensic investigation. The trick is to find meaningful signals about a potential attack or security risk in the sea of data points.
Adding a layer of advanced analytics — a security intelligence layer — brings all of this security data together to provide real-time visibility into the both the data center and the cloud infrastructure.
In the same way that clouds in the sky have an ever-evolving perimeter, so does cloud computing. Security is an important factor in cloud deployments and by building in the security capabilities described in these six steps, organizations can better manage and protect people, data and their devices in the cloud.
Hybrid, Multi-Cloud Deployment Most Cost-Effective
Excerpted from ARN Report by Monica Nenchev
Hybrid or multi-cloud deployment is the most cost-effective and efficient method for a business to manage abundant cloud computing resources, according to cloud computing experts from the University of Sydney.
The School of Information Technologies' Center for distributed and high performance computing has endorsed the hybrid cloud model because it is a "scalable, quantifiable solution that can combine the best of both private and public clouds."
Private cloud capacity can be reduced by dynamically provisioning public cloud capacity. While sensitive data and time critical workloads are processed in their private cloud, the rest may be offloaded to public clouds.
"A hybrid cloud is a cloud computing environment where a business can manage some resources in-house while also utilizing external providers," a researcher from the Center, Young Choon Lee, said. "A business or organization might use a public cloud service such as Amazon EC2m MS Azure or Google Compute Engine to process and archive burly data, but continue to utilize its in-house storage for operational or day to day data."
"The hybrid approach allows a business to take advantage of the scalability and cost-effectiveness that a public cloud computing environment offers without exposing the organization's applications and data to third-party vulnerabilities such as hacking."
In addition, the trade- off between cost and performance that are two main and conflicting objectives in hybrid cloud can be effectively captured using pareto-optimality, Lee said.
According to the University of Sydney's chair of high performance computing and networking, Professor Albert Zomaya, it is critical we develop models for the efficient use of cloud resources and traditional data centers.
Using Private Clouds for All the Right Reasons
Excerpted from Computerworld Report by Nancy Gohring
Here's why some customers are adopting the technology -- and what they're doing.
Private clouds are all the buzz these days, so you'd be forgiven for thinking that everybody's doing it. But in fact, fewer companies than you might think have deployed "true" private clouds.
Forrester found in a recent survey of 2,330 people that 26% of IT executives say they have a private cloud. But among those who claimed they have a private cloud, only 13% implemented the technologies that Forrester says truly define a private cloud, like self-service and automated provisioning, among other features. Instead, they built private environments that have some but not all the features of a private cloud.
Further, some businesses that are building private clouds would really be better off with a standard virtualized data center or with a public cloud, experts say. Around half the time, businesses build private clouds for the wrong reasons and should be doing something else instead, estimates David Linthicum, a consultant at Cloud Technology Partners.
The National Institute of Standards and Technology's definition of a 'true' cloud environment includes the following characteristics: on-demand self-service; broad network access; resource pooling; ability to scale resources quickly, either up or down; and having measured service.
A key feature of clouds is orchestration — the coordinated delivery of many types of resources including processors, storage and networks — to provide an integrated provisioning process. In other words, a single command or request causes a number of actions to occur, in a specific sequence, to coordinate the provisioning request.
The whole point of a private cloud is to allow IT managers to reduce costs and provide agile provisioning rather than just making management of the infrastructure more convenient for themselves or others.
"In many instances I'll determine quickly that it's an emotional decision versus a logical one," he says. For example, some IT departments are so used to running their own data centers that they have a hard time letting go of it. Sometimes that's because they may be concerned about how the shift might affect their jobs.
That doesn't mean there isn't a need for private clouds. There is, in the right circumstances, which include new, large development operations, apps that draw on truly sensitive data and aging data centers.
The first question businesses should ask themselves is why they want to build a private cloud. Typically, enterprises talk about security, Linthicum says. But that's not the whole story, he says. "The reality is, it's control. They want the thing to exist in their data center. It's just hard to change habits," he says.
Mike Schutz, General Manager of Product Marketing for Windows Server and Management at Microsoft, agrees that control is an issue. "In some cases what the public cloud doesn't provide today is a level of control that some organizations need," he says.
It's not just the ability to reach out and touch the servers. With a private cloud, a business can build just the amount of memory and storage it wants and make its own software choices too, around databases, for instance. Organizations can also customize security to fit their needs and use the networking gear that ensures fastest connections to their data.
Security can be a good reason to use private cloud in some cases, Linthicum says. If a business is handling state secrets, personally identifiable information or proprietary research, a private cloud can make sense.
Heartland Payment Systems, which offers payment processing services to merchants, falls squarely in the category of a business that has turned to private cloud for security reasons. In 2010, it embarked on a data center consolidation project, just a year after a very well-publicized data breach. "Security and risk and compliance and liability were all top of mind," says Kris Herrin, Chief Technology Officer for Heartland.
As part of that data center consolidation process, which ultimately whittled down the number of data centers from nine to three, Heartland decided to adopt a private cloud. Now, Heartland is in a unique position as an early adopter of private cloud that is now in the process of upgrading to a second-generation private cloud.
"Our first attempt was very much 'cloud washing,' " he explains, meaning that the vendor, in this case Fujitsu, called it a cloud, taking advantage of the buzz around the term without actually delivering full cloud features."It was an outsourced managed service offering that was simply whitewashed with cloud-like behaviors, including utility pricing."
That said, the private cloud continues to serves its purpose, he says -- to run the payment processing service that is used by Heartland's merchants. The infrastructure is owned by Heartland and is in a physically separate environment. "Our auditors, internal and external, can see and feel and touch it and that makes them feel better," Herrin says.
But it's missing a few important features. One is that it doesn't offer software-driven networking or storage. That means that the company can easily and very quickly provision compute power but it might take an additional two months to set up the networking piece.
Heartland has a particularly complex network design because of the nature of its business -- it offers real-time credit card processing services.
Its second-generation private cloud, which it hopes to have up and running by the first quarter of next year, will support software defined networking, which will decouple the networking from the compute functions and thus should make it much easier to provision cloud services and also make hardware upgrades.
Heartland is currently using VMware's cloud technology and expects to continue with VMware in its new cloud, at least initially. "We're having open discussions as to whether we may or may not continue with VMware in the long run," Herrin says. "We realized we need to give ourselves the ability to be agnostic whether we stick with VMware or not." The plan is to architect the cloud so that the company can switch to a different cloud technology provider in the future. Apache's CloudStack is on Heartland's short list, he says.
Heartland expects to be able to use existing server hardware from IBM for the new cloud and is still evaluating whether it will be able to reuse the Fujitsu hardware from its first-generation service.
The new cloud likely won't be self-service in exactly the same way that public clouds like Amazon Web Services are, but Herrin still expects it will be a dramatic improvement. "What I figured out quickly is my business users and developers internally didn't really care about self-service," he says. Whether they ordered up the resources themselves or someone else did it for them, that factor wasn't as important as getting access to the resources quickly.
He's envisioning a setup where developers will be able to do most of the kind of provisioning they want on their own while reaching out to a staff cloud expert for some functions. "Given where things are today, in that it takes weeks to get things done, getting it down to days, people will be thrilled with that," he says. "That will be a nice win right off the bat."
Heartland does use public cloud services, like those from Amazon Web Services, for some applications. "We want to consume more and more in the public cloud but we know we will always still have a private cloud," Herrin says.
SunTrust bank is another institution whose high security needs spurred it in the direction of private cloud. The company is taking a unique path. "Our longer term strategy around cloud computing is this: We are building a series of private, internally hosted clouds that are very much purpose-driven," explains Rich Gilbert, Senior Vice President for Information Technology and Services at SunTrust.
"We are building a series of private, internally hosted clouds that are very much purpose-driven," explains Rich Gilbert, senior vice president for information technology and services at SunTrust, the financial-services firm.
In other words, the company is building separate clouds geared specifically toward their applications. For instance, the company is currently working on a cloud that will support its virtual desktop infrastructure. "VDI apps are very I/O intensive," Gilbert says. "So instead of using a general cloud, we'll build it specially to support that workload."
SunTrust is also building a test and development cloud that will be designed as a more all-purpose cloud with a self-service capability. That cloud will have an equal mix of VMware and Microsoft cloud software.
The bank regards its private clouds as an interim step. Once the company is running applications on its private clouds, it hopes to evaluate whether one day it might be better to offload them into a software-as-a-service or externally hosted private environment. "The longer term challenge is... how do we become more of a service broker than a service builder?" Gilbert says.
It has taken steps in that direction with its archiving system. Around 18 months ago it started evaluating options for document and email archiving and retention. Using an external private cloud for archiving turned out to be a better bet than building in-house, Gilbert explains. When looking at the value add of archiving in-house, including building the service and ongoing support, it made more sense to use the external service, he says. The service is hosted by Viewpointe.
In addition to security reasons, if a business has very high performance needs, a private cloud can help.
Nokia Research and Nokia Siemens Networks (NSN) — two separate companies — both built private clouds for security and performance reasons.
For Nokia Research, neither a public cloud nor the production corporate network was a viable option. Since Nokia Research compute resources are used by researchers who are toying around with new projects that could be unstable, it's too risky to run these systems on the corporate network where they could potentially cause trouble, says Alex Bederov, Systems Architect at Nokia Research.
And because the projects are confidential, "legal just wouldn't allow us" to use a public cloud, he explains.
NSN, a company with an annual R&D budget of 1.7 billion euros, had some similar needs as Nokia Research, with an added twist.
It had a VMware-based data center, used by researchers, that had performance problems and so was running some workloads without virtualization. It began looking for a way to both homogenize its environment and introduce more flexibility for researchers, says Janne Heino, Product Manager of Cloud Solutions R&D for NSN.
"The challenge for a company like ours is that we have a lot of data internally in place," he says. If it had gone with a public cloud, moving that amount of data to the cloud and back on a regular basis "would have been quite a challenge."
NSN considered sticking with VMware but at the time — around three years ago — found that wouldn't allow it to let users instantly spin up new instances.
It looked into Eucalyptus, Nebula, and OpenStack and settled on Eucalyptus because it was the only one with a production product at the time. "OpenStack came as a compiler and source code," he says. With Eucalyptus, he figured there'd be someone to call for help if needed.
If his firm had gone with a public cloud, moving that amount of data to the cloud and back on a regular basis "would have been quite a challenge," says Heino.
NSN is now running a private cloud with 10,000 cores spread across four locations worldwide. Ask tomorrow though, and it might be even bigger. "It's been quite a success. It's scary at times," Heino says.
The cloud, in terms of instance hours used, has been growing 35% month over month for the past 15 months. "I love it and hate it at the same time. Every month I think, 'where do I grow next?' I hope it ends soon otherwise I'll run out of server rooms."
Unlike many of the businesses in the Forrester study, Nokia Research and NSN take full advantage of self-service options.
In fact, that was one of the primary reasons Nokia Research built its private cloud.
"You can call the private cloud whatever you want to call it. I'm looking at it as automation of resource provisioning," Bederov explains.
Managing resources for Nokia Research has been an evolution, he says. "First it took six weeks to get a server on the network, then 24 hours. Now it's two minutes," he says.
NSN also offers self-service and uses the tools Eucalyptus offers to set quotas for users. Some workers who "will need a lot of resources and are responsible have access to anything," Heino says. Others have limits.
Deciding who needs a quota and what size it should be is a challenge, he warns. "Writing quotas is difficult. We don't want to limit innovation or development," he says. He's currently researching possibilities for implementing more advanced resource management. For instance, he'd like to offer key users a guaranteed amount of capacity but have the ability to offer that capacity to other developers if it's not being used. He's investigating using one of Netflix's open source tools, called Janitor Monkey, to help with that process.
Xerox, which has built a private cloud in India based on Microsoft's technologies, also controls the resources users can access. Because several different groups use the cloud, Xerox also uses Microsoft tools for internal billing and chargeback, says Raman Padmanabhan, Senior Vice President and CIO of Xerox Business Services.
Xerox has built a private cloud in India based on Microsoft's technologies, says Padmanabhan.
Nokia Research, NSN and Xerox are outside the norm. While some businesses buy private cloud products but don't turn on critical features because they aren't quite ready yet, most avoid self-service for a reason.
"Typically, it's a lack of trust," says Lauren Nelson, an Analyst with Forrester Research. IT managers worry that if they turn on cloud capabilities, like self-service, internal users will do things incorrectly, she says.
In many cases, though, it's just a matter of time, says Mike Adams, Group Product Marketing Manager at VMware. "In the enterprise, you may be dealing with a more conservative crowd that may turn features on over a longer period of time," he says.
Also, some IT admins figure that the upgraded products, even without self-service and some of the other capabilities, are good enough. Where it used to take them two weeks to provision resources, the new management interface lets them respond to a ticket request in two days.
"They don't think users need 15 minutes," Nelson says. "They think two days is substantially better than the status quo."
But that avoidance might come back to haunt IT: Given that developers know that they can spin up an Amazon Web Services instance in 15 minutes, IT may be essentially driving them to do so, even if it's against company policy.
Deciding which private-cloud toolkit to use can be a long and complicated journey. Please click here for the full report.
Coming Events of Interest
P2P 2013: IEEE International Conference on Peer-to-Peer Computing - September 9th-11th in Trento, Italy. The IEEE P2P Conference is a forum to present and discuss all aspects of mostly decentralized, large-scale distributed systems and applications. This forum furthers the state-of-the-art in the design and analysis of large-scale distributed applications and systems.
CLOUD COMPUTING WEST 2013 - October 27th-29th in Las Vegas, NV. Two major conference tracks will zero in on the latest advances in applying cloud-based solutions to all aspects of high-value entertainment content production, storage, and delivery; and the impact of mobile cloud computing and Big Data analytics in this space.
International CES - January 7th-10th in Las Vegas, NV. The International CES is the global stage for innovation reaching across global markets, connecting the industry and enabling 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 $209 billion US consumer electronics industry.
CONNECTING TO THE CLOUD - January 8th in Las Vegas, NV. This DCIA Conference within CES will highlight the very latest advancements in cloud-based solutions that are now revolutionizing the consumer electronics (CE) sector. Special attention will be given to the impact on consumers, telecom industries, the media, and CE manufacturers of accessing and interacting with cloud-based services using connected devices.
CCISA 2013 – February 12th–14th in Turin, Italy. The second international special session on Cloud computing and Infrastructure as a Service (IaaS) and its Applications within the 22nd Euromicro International Conference on Parallel, Distributed and Network-Based Processing.
CLOUD COMPUTING EAST 2014 - May 13th-14th in Washington, DC. Three major conference tracks will zero in on the latest advances in the application of cloud-based solutions in three key economic sectors: government, healthcare, and financial services.
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