Cloud computing shapes up as big trend for 2009

It is still early in the year, but cloud computing already is shaping up as a key trend for 2009.

At SoftwareAG’s Cloud Computing Innovation Day in Santa Clara, Calif., on Tuesday, executives from companies including Software AG, Elastra, RightScale, and Soasta pondered the benefits and obstacles of cloud computing, a concept that generally involves enterprises utilizing third-party servers over the Internet to run applications.

The event was at least the third cloud computing-related session scheduled in the Silicon Valley area since last Thursday.

“For me, cloud computing is infrastructure, infrastructure in the most fundamental sense,” said Miko Matsumura, vice president and deputy CTO at SoftwareAG. “It really is the compute infrastructure to some extent, but that it gets deeper at some level.”

Today, the main benefit of cloud computing is that it enables adherents to only use what they need, something particularly important in a down economy, Matsumura stressed. Clouds scale up and down quickly, he said.

“It gives you a lot of flexibility,” Matsumura said. He anticipates enterprises utilizing cloud computing in a hybrid fashion, deploying some applications in the cloud but perhaps not for a bread-and-butter SAP application holding lots of proprietary data.

At Elastra, the company seeks to help take advantage of cloud computing using existing infrastructure, leveraging a client’s virtualized datacenter and grasping which applications might make sense deployed on the Amazon Elastic Compute Cloud (EC2) public cloud, said Stuart Charlton, chief software architect at Elastra.

“To really understand the cloud, it’s not just about outsourcing,” Charlton said. The point of the cloud is that it is aligned with recent concepts such as SOA and enterprise architecture, he said. Qualities of the cloud include on-demand access, usage metering, self service, scalabilty, and elasticity, according to Charlton.

Upcoming barriers to cloud adoption include integration and data quality, he said.

“My view is that the cloud is a very interesting destination for some apps, not for every app but for some apps,” said Tom Lounibos, CEO of Soasta, which offers Web application testing via a cloud paradigm.

Applications for the cloud can include sales and marketing systems, RSS and content management systems, social networking, and CRM. The cloud “makes a very interesting platform for composite apps,” Lounibos added.

Asked what applications do not work in the cloud, Lounibos declined to be specific, saying companies make personal decisions about cloud deployments based on core competencies.

Soasta is seeing enterprise companies as well as startups as customers. “What I’ve learned is cloud computing blurs the line between enterprise and small and midsize companies,” he said. Lounibos asked, “Is Facebook a small or midsize company?”

Cloud computing is inexpensive, stressed Michael Crandell, CEO of RightScale, which offers cloud management for deploying mission-critical applications. He listed other drivers to the cloud as scalability and access to resources.

Barriers to cloud adoption include lock-in, security, service-level agreements, regulatory compliance, and loss of control of underlying infrastructure, Crandell said.

“On the obstacle side, lock-in, interestingly enough, is the No. 1 obstacle that we hear mentioned among customers and prospects that we speak with,” said Crandell, adding that RightScale addresses obstacles to the cloud.

He listed customer examples, including a biopharmaceutical company using the cloud for wikis for its global workforce, grids for protein analysis, and compute-intensive statistical analysis.

Crandell said commoditization in the cloud space is happening and is good in that it creates standards and the ability to replicate. It also can lower prices. But even at the cloud infrastructure level, differentiation is occurring, said Crandell. He cited as an example Amazon’s Availability Zones capability to protect applications from failure of a single location.

An attendee cited software licensing as an issue with cloud computing and virtualization.

“The challenge with enterprise software is a lot of enterprise software license terms are bound by hardware configurations,” said Mehmet Orun, a senior manager at a biotechnology firm that has used cloud computing.

He asked if vendor legal groups were ready to accommodate a flexible model to allowing for differing demands for software at different times, such as meeting peak demands at certain times of the year.

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