Cloud computing could be white knight in economic downturn

Stan Beer
Wednesday, 19 November 2008 13:03

Business IT - Networking

While cloud computing cops a bashing from some industry pundits, it could in fact be one of the more important factors in helping enterprises cope with the economic downturn. This is the belief of a leading industry analyst.

According to Steve Hodgkinson, research director at Ovum, as the effects of the meltdown in the global financial sector spread throughout the economy the cloud will become an ever more important strategy for reducing both capex and opex – giving CIOs new options for responding to budget pressures in recessionary times.

"While it is wise to be sceptical of marketing hype, we should not forget that there is real substance in the cloud," says Mr Hodgkinson in a research note.

Mr Hodgkinson identifies the real champions of cloud computing as not SaaS leader Salesforce but rather Internet giants like Google and Amazon.

"While Salesforce.com is credited with popularising software-as-a-service the broader notion of cloud computing has been launched by the likes of Amazon and Google," says Mr Hodgkinson.

"These internet giants introduced platform-as a-service offerings to boost the ROI of their massive global computing infrastructures.  For start-ups and SMBs there is great appeal in the “IT-department-as-a-service” provided, for example, by Amazon Web Services, Elastic Compute Cloud (EC2) and Simple Storage Service (S3) and by Google Mail, Docs and App Engine."

Mr Hodgkinson also indicates in his note that cloud computing is a much broader term than SaaS.

"While the ‘as-a-service’ label has increasingly been applied to three bundles (software, data and platform) cloud computing has become very broad - encompassing applications ranging from ERP systems through to widgets; application development tools and environments; storage; processing; systems management and security. Cloud computing = ‘as-much-ICT-as-you-want-as-a-service’."

He also identifies the charactistics that make cloud computing an attractive proposition for ICT users:

·         Provided as a standardised utility: a set of service offerings provided largely on a similar, un-customised, basis to all customers - enabling unparalleled economies of scale.

·         Delivered via the internet (of course): using industry standard IP protocols and benefiting from the massive scale of investments in global internet capacity.

·         Accessed via a web browser: providing a generic interface independent of operating system or access device.

·         Founded on open standards and APIs: using SOA principles and web services logic.

·         Self served: enabling customers to enrol in the service and manage their usage via online self-serve processes.

·         Inclusive of a range of services: from front-end applications through to back-end raw compute capacity.

·         Always on: 24x7 global availability.

·         Scalable: able to absorb major variability in processing and storage demands.

·         Pay as you go: with usage driven charges and minimal up-front contractual commitments.

·         Public or private: able to be deployed on an open global ICT infrastructure or a partitioned infrastructure specific to a customer’s needs.

Despite its obvious benefits, Mr Hodgkinson believes cloud computing is not a universal panacea, especially for mission critical applications.

"Enterprises, however, are quite right to be cautious about relying on such consumer/SMB oriented suppliers for anything resembling a mission critical application or service," he says.

Despite its present shortcomings, though, Mr Hodgkinson does believe there is a bright future for cloud computing in the enterprise.

"Most recently the major IT companies have started to see gold in the cloud, and are investing in both purpose-built cloud computing infrastructure and in developing solutions to enterprise concerns regarding cloud trustworthiness.

"IBM is expanding its network of ‘Blue Cloud’ computing data centres and is making substantial investments in cloud computing R&D.  HP, Intel and Yahoo are partnering to create new cloud R&D centres.  Oracle and Intel are partnering on cloud infrastructure development."