Who's Getting ROI From Cloud Computing Now

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Slow on the Uptake

As Staten indicated, enterprises have been slow to adopt cloud computing, so examples are few and far between. However, there is one striking example available -- The New York Times. The Times wanted to makes its historic archives available for online access. They needed to process 11 million articles and turn them into .pdf files. Initial estimates outlined that hundreds of servers and about 4 Tb of storage would be necessary. The IT organization at the Times outlined a months-long delay before beginning, not to mention the question of identifying the significant budget needed and locating the computing resources.

The fellow in charge of the product decided to give Amazon Web Services a shot. He signed up with his company credit card, and kicked off 100 EC2 instances and 4 terabytes of S3 storage (S3 is Amazon's storage services). The job was finished the next day with a total cost of $240.

The Times anecdote illustrates the dramatic potential of cloud computing-and the challenge it poses to IT business-as-usual.

However, there are, inevitably, concerns about cloud computing: conformance with corporate IT security policies, the lack of SLAs, and support for commercial software applications. What about these issues?

With regard to the security policy issue, it's hard to know what to think. While this certainly needs to be examined, the experience of most IT security professionals is that they have a hard time getting their message across to IT as it is performed today. In other words, the track record of IT security isn't that great already, so is cloud computing any worse? One might argue that the commercial cloud providers are likely to be more security capable, given their competitive advantage vis a vis internal IT-in other words, they specialize in IT infrastructure and are given the resources to implement security properly, whereas internal IT organizations aren't truly experts in IT infrastructure and often are unable to obtain enough budget to implement security measures they know are necessary.

The question of SLAs is tricky. As one panelist noted, most SLAs from hosting providers are limited to the cost of the hosting itself: he had suffered an outage from a supposedly rock-solid hosting provider, and his refund from an outage that harmed his business was 38 cents! Of course, many internal IT organizations also focus on SLA numbers; however, the track record of these organizations is mixed- some do a very good job, while others suffer repeated outages, and in that case, what's the use of having an SLA? For what it's worth, I ran into a parent of a child who goes to the same school as one of my children; he works at a company called Brightroll that is completely hosted on Amazon EC2 and he swears by EC2's stability.

My own view is that a fairly sophisticated risk assessment methodology for deciding whether to use internal or cloud resources will need to be applied. A key part of that methodology will need to be fair costs for the services as well as an objective perspective on actual implementation time frames. With the cost and responsiveness of cloud computing weighed against risk profiles, a mix of internal and cloud computing is likely to be a common feature of future enterprise IT approaches.

Turning to the issue of commercial software support, this may prove to be less of an issue than might be expected.Despite Oracle CEO Larry Ellison's sniffy dismissal of cloud computing last week, just a day later the company announced support of its products in the Amazon Web Services infrastructure. Hard on the heels of that announcement, Amazon itself announced that it will soon offer Microsoft Windows Server EC2 service. Given these two big dogs are going to support cloud computing, I think it's probable that commercial software providers will make their products available in advance of true enterprise demand.

The Symposium gave a glimpse of the potential and possible future of cloud computing (If you're interested in looking at the agenda and some of the speaker presentations, see them< a href="http://www.sdforum.org/index.cfm?fuseaction=Calendar.eventDetail&eventID=13223&pageId=471">here).

Certainly early adopters have reaped excellent results, making the excitement (and hype) on the topic understandable. I predict increased adoption with continued positive outcomes, tempered by reluctance to leverage "different" technology and the always-present organizational procrastination and dawdling.

Bernard Golden is CEO of consulting firm HyperStratus, which specializes in virtualization, cloud computing and related issues. He is also the author of "Virtualization for Dummies," the best-selling book on virtualization to date.

This story, "Who's Getting ROI From Cloud Computing Now" was originally published by CIO.

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