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Friday, January 29, 2010

Is there a CLOUD Acronym beginning to emerge?

I was wondering that this week as I started to see more expo/trade show emails starting to show up. The noise around cloud seems to be gaining, not subsiding, and it has me wondering why.

It also got me thinking that CLOUD was not a form of computing, but an Acronym.

Offerings of

A year and a half ago, Grid changed to Cloud. Public cloud. Amazon and then Google started using (publicizing) 'The Cloud' and became legit. Then in an attempt to coin something new, 'The Industry' split into Public Cloud and Private Cloud, which gave us mortals something new to chew on. It was also something to divert us away from looking at the nature of cloud and what it really means. AKA Marketing figured out it was a way to create buzz and get their company looked at.

If you don't want to know what I think about the whole cloud thing, you should bail out now. Since this is my personal blog, I share personal opinions (right and wrong) with anyone who cares to read them.

The nature of cloud is that it has very little to do with computing and a LOT to do with accounting for IT spend.

The model has existed for years. Instead of building/buying a supercomputer I will rent cycles and schedule jobs on one. This way I get the benefit, and 'pay by the drink' based on consumption. I have also referred to it as a 'cash bar' or 'pay by the drink' model. You pay for what you use when you want to use it.

This was in stark contrast to the 'Open Bar' model where an organization bought (or in most cases overbought) their IT resources for any 'what if' scenario someone could think of. As a result, a lot of money is spent and a lot of IT resources go under utilized. Amazon filled a data center to process orders for the Christmas deluge, but then had to pay for the infrastructure for the other 10 months.

So Amazon came up with a way to utilize that infrstaructure the other 10 months a year - EC2 and AWS offerings. Now they could recoup some of that investmeant by leasing out their infrastructure in small bits to people who needed some resources. The public cloud became the next New Thing.

EMC did the same thing with Atmos - roll out a bunch of EMC gear and charge for it in small bits for people who needed storage. Carbonite is out there too.

So at the end of the day someone still needs to buy all of this gear, house it, carve it up, and dynamically provision and deprovision units of IT components - memory, disk, bandwidth and storage. Instead of leasing a 1U server, you can now lease pices of a 1U server, in multiple places and have your own cloud.

The shift then was to private clouds since customers wanted to own their data, and be able to secure it. The issue then arose, of how does a cloud provider secure data that is owned by users/customers? Isn't this just the same thing as a managed services provider leasing someone a server, and introducing per untit costs for data storage, network, and security?

At the end of the day, Cloud is about how you account for computing resources. It is moving IT resources from CapEx to OpEx down to the smallest untits possible. In many ways this is what data center colocation copmanies do today at a more macro level - they buy buildings, add electrical distribution systems, air handling/conditioning equipment, and then carve up buildings into cabinets, cages, rooms, pods, etc.

This is far easier to do as a single tenant facility vs a multi tenant facility because in a single tenant facility the customer has control of everything from the building to the systems, right down to the servers, apps, security - the whole nine. In a multi tenant facility you will see cages that go to the ceiling, some 8' high. Biometrics into the room and/or cage, and different locks on cabinets. The multi tenant facility must account for many more requirements that in a single tenant facility.

So what is happening is companies are rolling out their own clouds (islands) of computing, and if one provider can put marks in more checkboxes on an RFI, they get the business. The downside is that vendor lock can enter the picture, and without a way to federate the clouds, you need to hope your provider gets more islands to build an archipeligo for your requirements or you'll end up managing different island regions and you're no better off than had you taken space with a provider with multiple locations.

So I come back to the nature of cloud and ask - isn't Cloud computing just a different way of paying (accounting) for IT resources?

I will also offer that telcos are in the best position to offer a decent cloud becuase they have some of the most complex billing systems to layer on top of the equipment necessary to bill for cloud resources.



  1. Mark, interesting post. I will declare that I work in cloud, under a Telco.

    Agree its essentially about a different way of paying but there is also the aspect of a different way of using. Cloud is not grid or managed hosting. There are things which have changed to make Cloud cloud.

    Yes, billing systems are a nightmare and Telcos have big complex ones. When I present on cloud I warn people that figuring out the cost for cloud could be like figuring out the cost of different mobile phone plans. People will do this to be different from others, just like they do in the telephony space.

    Anyway, lots more that could be discussed. Look forward to more articles.


  2. Mark:

    To provide context to this post, I serve as the Executive Director of the Technology Services Industry Assoication (TSIA).

    Just these two sentences from your post break more glass than you can imagine in the enterprise technology industry:

    "At the end of the day, Cloud is about how you account for computing resources. It is moving IT resources from CapEx to OpEx down to the smallest untits possible."

    You are talking about moving the technology industry from selling "products" to selling "services." And selling services by the drink. I think it's going to be a bumpy ride for many product providers that are not able to transition to this new consumption model.


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