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Cloud Connect: Charting the course of on-demand computing

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

Cloud Connect: Charting the course of on-demand computing


Cloud Computing represents the biggest shift in computing of the last decade. Its as fundamental as the move from client-server computing to web-centric computing, and in many ways more disruptive. For cloud computing is a change in business modelsthe ability to efficiently allocate computing power on demand, in a true utility model. It changes what companies can do with IT resources. By 2012, cloud spending will grow almost threefold, to $42 B. Already, the money spent on cloud computing is growing at over five times the rate of traditional, on-premise IT. Cloud adopters are already bragging about their lower costs and greater ability to adapt to changing market conditions. But despite these trends, companies wont switch to cloud models overnight. Rather, theyll migrate layers of their IT infrastructure over time. Between todays world of enterprise data centers and tomorrows world of ubiquitous computing is a middle ground of hybrid clouds, opportunistic deployment, and the mingling of consumer applications with business systems. Weve only begun to scratch the surface of what clouds can do, because cloud computing will forever change how we perceive technology. Clouds change the way we plan enterprise IT. They change how startups launch and grow their offerings. They alter the tools and methods with which developers build applications. And they demand new hardware and software platforms, both for enterprises and for the companies delivering cloud computing services.

Business models and technologies


Cloud computing is both a business model, and a set of technologies. The business model changes how and when we use computing resources, while the technologies redefine whats possible with them.

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

The business of clouds


The cloud computing business model is utility computing in the purest sense: Pay-as-you-go storage, processing, and delivery resources offered by a third party. This may consist of on-demand applications (Software as a Service) that offer a specific set of functions; or it may be a more general-purpose offering of computing or virtual machines. Buying computing as a utility means IT doesnt have to provision and manage resources. Some analysts estimate that there are cost advantages of 3-5x for business apps, and 5-10x for personal productivity apps. On-demand models let organizations experiment and adapt, and make previously impossible IT projects feasible because of how they change the economics of IT. Consider:

arge-scale processing in pharmaceutical and financial industries L


can burst into on-demand clouds as needed. igitizing archives of printed datawhich might have taken years D on a single machinecan be done overnight across thousands of cloud machines. T projects that simply couldnt qualify for research capacity can I now be undertaken for a few hundred dollars. evelopment teams can self-provision resources, enabling D experimentation without waiting for IT approval. Overhead tasks that dont add value to the organizationfrom expense reporting to travel planning to candidate processingcan be performed on SaaS portals for a fraction of the total cost of doing them in-house. lways-connected mobile devices connect remote workers to A corporate information in previously unthinkable ways, vastly broadening ITs reach.

Cloud technologies
On the other hand, cloud computing technologies are the underlying innovations that make clouds possible. Theyre born of grid computing, virtualization, and automation. They allow massively scaleable data processing, the separation of computing tasks from commodity infrastructure, and the quick provisioning and decommissioning of compute resources without manual IT involvement.

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

Cloud technologies were forged in academia and open source projects, and have been proven by cloud vendors and Internet giants. Now theyre being deployed within enterprises:

harded storage models that store thin slices of data in many S


locations, speeding up retrieval and protecting against outages. omputing frameworks that distribute a task across many C processors to accelerate computation. elivery networks that self-organize and speed data to the farthest D reaches of a network on demand, transcoding and transforming information in transit. etwork fabrics that adapt to workload and move computing tasks N across resources automatically. utomation and scripting systems that replace manual IT work with A code. Virtual racks of composed designs that can grow or shrink to handle workload on demand.

Its fair to say that cloudsboth as a business model and as a set of technologiesrepresent the future of IT.

On the shoulders of giants


While cloud computing as an industry is a recent innovation, its really the convergence of many technologies that make it possible:

irtualization separates processing workload from underlying V


components. Now that computing is relatively standardized, virtual machines can execute custom tasks atop a generic infrastructure. This allows cloud providers to focus on operational efficiency and performance while giving customers complete control over their development environments. ynamic web applications and widespread browser standards D made Software as a Service possible. But as SaaS became popular, customers wanted customization. As a result, SaaS providers created increasingly sophisticated development platforms that ultimately became programming languages in their own right. Today, these Platform-as-a-Service offerings include integrated development environments, APIs, developer ecosystems, and storefronts.

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

ervice-oriented architectures made it possible to build applications S


from distributed components, and to replace one component, such as storage or authentication, with another. From here, making those components into utilities was only a small step. he cost of managing and maintaining IT resources far outstrips T the cost of buying them in the first place. In a small company, the ratio of IT personnel to servers might be only 1:300. But in a cloud environment, it can reach 1:3000. The key to this is automation. biquitous broadband, along with broad consumer adoption of U Internet technology, means computing is everywhereand it blends into the background. Well take connectivity for granted, be lost when it doesnt work.

Really Big Data Centers


Microsofts new data centre in Northlake, a suburb of Chicago, one of the worlds most modern, biggest and most expensive, covering 500,000 square feet (46,000 square metres) and costing $500m. Google is said to be operating a global network of about three dozen data centres loaded with more than 2m servers (although it will not confirm this). Microsoft is investing billions and adding up to 35,000 servers a month. Other internet giants, such as Yahoo!, are also busy building huge server farms. Today, the difference between cloud providers economic efficiencies and those of large enterprises isnt that big. That will change, however. Cloud companies are in the business of running infrastructure efficiently. They have undeliable economies of scale. Fortune 500 companies might have big data centersbut its unlikely theyre filing patents on shipfulls of computers that can sail the ocean and cool themselves, or building data centers near nuclear reactors and dams to save fractions of pennies on power. Put another way, if youre not already buying computers by the shipping containerthe way that Google, Microsoft, and Yahoo areyoure going to use a cloud platform someday soon.

Far-reaching impacts
Its hard to overstate the impact cloud computing will have in the next decade. Applications that live in the cloud will pervade every aspect of our business and personal lives. Well see a flurry of Internet-connected deviceseach linked to cloud-based clouds. The entire networking and computing industry needs to reconsider its role.

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

As Merrill Lynch points out,

With broadband Internet, optical networking and advances in computing power and storage, its becoming less relevant where the server is located Our analysis indicates that the Cloud is a $107bn addressable enterprise market opportunity by 2013. The consumer Cloud opportunity will continue to be subsidized by the $65bn online advertising industry, with a portion of the online ad market being incrementally driven by Cloud application usage.1
By redefining both what is possible and how we pay for it, clouds are undermining even the most fundamental aspects of IT (Figure 1).

Figure 1: Clouds make IT reconsider whats possible

Consider, for example, how IT plans capacity. Traditionally, IT deployed servers, and performance varied based on how much load the servers had to handle. With clouds, however, capacity is elastic. Rather than defining capacity and seeing what performance is like, IT will now have to define the desired performance level based on the capacity they can afford. This also means that two organizations running identical applications may have different margins and costs simply based on the efficiency of their

Cloud wars, Merrill Lynch, June 2009

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

code and how much utility it consumes. Code efficiency may literally mean the difference between profit and bankruptcy. For developers, code efficiency is just the tip of the iceberg. Whereas before, developers built on the software and frameworks they felt were best for the job, now theyll select a software platform based on the ecosystem the cloud provides. Someone creating CRM applications may choose a different compute cloud from someone writing communications tools simply because of the adjacent services that the cloud offers. Even these examples fall short of the true impact of clouds. By making computing everyday and everywhere, were changing how humans live their lives. Soon, computing will be so ubiquitous and so transparent that well forget how we ever lived without it. And worse: a hiccup in cloud computing feel like a stroke: well lose a faculty we take for granted. It will take a decade for this to play out. In that time, networking, computing, and storage will have changed radically. New opportunitiesand threats lurk around every corner. If youre involved in IT, get ready to have even your most basic expectations fundamentally changed. Cloud computing is the grey matter for the next stage of human evolution. Were augmenting human cognition, giving people new ways to learn, to interact, to perceive, to remember, and to connect.

Getting from here to there: Cloud migration


For many IT policymakers, a better question than whether or not clouds are part of their future is that of how they will get there. Clouds arent an allor-nothing game, but many of their advantages will be economically and architecturally irresistible. Consider Figure 2, which illustrates three kinds of computing. Some computing tasks must remain internal; others are well suited to cloud-based deployment. A third set can be done anywhere. Defining the policies that control which tasks are handled where will be a major undertaking for IT managers in coming years, and these policies must by nature be dynamic, able to deal with changing compliance regulations and the pricing whims of service providers.

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

Figure 2: A policy-based model of hybrid computing

New drivers
Cloud computing has emerged in response to important economic and social changes. Cloud adoption is more insidious, less regulated, and more subversive than other technologies, simply because its so easy to try (free!) and hard to block (web-based.) Consider, for example, where new technologies come from. Fifty years ago, government and military research was the main driver of technological innovation. Twenty years ago, business drove technology research and adoption. Today, however, consumers are the ones pushing the envelope. Mobile devices offer augmented reality, telepresence, and dozens of features that seemed more at home in a spy film than a teenagers pocket only a few short years ago. Services like Google and Amazon process billions of pages and millions of booksfor consumers. Whats more, workers are increasingly nomadic and mercenary. Rather than being an employee for life, knowledge workers move from project to project and team to teamfavoring tools and applications that are quick to roll out and easy to learn. Offshoring and outsourcing mean no one company controls the platform or the project; rather, everyone does. Cloud computing likes crowds. If youre an IT professional in the early days of cloud computing, this can be a daunting challenge. You face huge expectations, and you have to meet them without introducing risk or exposing your organization. You have to balance innovation with predictability.

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

The ethics of clouds


One of the most widespread, and ethically ambiguous, areas of cloud computing is privacy. Clouds store valuable information, from personal records to corporate documents. But those bits have to live somewhere which means theyre subject to real-world jurisdiction. Already, some countries are tightly controlling where information can be stored; and when that information is in the cloud, its unclear who owns it.

Figure 3: The value of information changes depending on who can access it

At the same time, the value of a companys information assets changes depending on where its stored. As Drew Bartkiewicz notes in Unseen Liability, organizations information assets are less and less valuable when kept secret, and more and more so when shared with partners and customers (Figure 3). So how do IT policymakers reconcile a need for privacy with a desire to share information so its value can be maximized?

Introducing Cloud Connect


Cloud Connect is a groundbreaking new conference from TechWeb. Its goal is to chart the course of cloud computings evolution by bringing together enterprise IT professionals, developers, infrastructure providers and cloud computing innovators. Crafted from the experience of running the industrys largest cloud, data center, and enterprise conferences, Cloud Connect promises to be the defining event of the cloud computing industry. The event will take place from March 15-18, 2010 at the Santa Clara Convention Center in Silicon Valley, CA. Its the one place the entire IT

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

industry can come together to understand the transformation were experiencing.

T Professionals will discover the promise of cloud computing, I


understand how they can start applying it to their organizations, learn how to overcome its challenges, and leave the event armed to make informed decisions about cloud adoption xecutives and business development professionals will build E partnerships, craft successful business models, and create deeper relationships with existing and future customers evelopers will hear from leading cloud providers, getting inD depth technical information on developing for cloud platforms and linking applications to on-demand services loud computing vendors will connect with all segments of C the cloud computing market in a single venue, letting them promote their products and services, generate leads, build deeper relationships with existing and new customers, and drive thought leadership to the larger business technology market efficiently and effectively nvestors and a nalysts will quickly identify trends and I opportunities, learning from industry professionals and one another

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

The Future of Business Computing is Here


Cloud Connect is the only event for the entire cloud computing ecosystem, creating the most efficient and effective platform to drive growth and innovation. See the latest cloud technologies and learn from thought leaders in Cloud Connects comprehensive conference. Cloud Computing represents the biggest shift in computing of the last decade. Weve only begun to scratch the surface of what clouds can do from ubiquitous computing, to massively scalable applications, to lean, agile IT organizations that adapt to changing business conditions. Already, companies that embrace on-demand computing are enjoying lower costs and greater ability to adapt to changing market conditions. www.cloudconnectevent.com

Bitcurrent is part blog, part analyst firm, and part resource site for web operations. Were a loose federation of pundits and entrepreneurs with experience in networking and technology. www.bitcurrent.com

CLOUD CONNECT SANTA CLARA CONVENTION CENTER SILICON VALLEY, CA MARCH 15-18, 2010 Alistair Croll, Conference Chair, Cloud Connect www.cloudconnectevent.com Principal Analyst, Bitcurrent www.bitcurrent.com

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