Private Clouds Are A Fix, Not The Future

by Jim Berkowitz on January 13, 2010

Here are several excerpts from an insightful article by Alistair Croll, principal analyst at Bitcurrent, Private Clouds Are A Fix, Not The Future:

Over the last few months, there’s been growing discussion over private and hybrid clouds. At first blush, a “private cloud” sounds like an oxymoron, particularly if you subscribe to Amazon CTO Werner Vogels’ definition of cloud computing:

“a style of computing where you have massively scalable IT-related capabilities that are available as a service, over the Internet, to multiple customers.”

There’s a massive difference between clouds as a business model–outsourced, third-party computing on demand–and clouds as a set of technologies (virtualization, automation, and so on). Vendors who blur the distinction between the two in order to jump on a bandwagon make me mad.  We had a vigorous debate on the subject at Interop New York, and I’m sure it will be front and center at Cloud Connect in March.

For a long time, IT was inefficient. Companies scaled their computing vertically–that is, they bought bigger machines, rather than changing the way applications worked so they could handle more users with more, smaller machines. IT could be lazy–there were simply no alternatives. The IT organization had a monopoly on computing.

While (disruptive technologies like Virtualization and Service-oriented architecture – SOA) were available for a long time, IT wasn’t quick to adopt them. Just ask anyone selling SOA software how hard it was to find buyers. These were good ideas, but IT had no real pressure to embrace them. So in many companies, these things got lip service, but didn’t get deployed.

Then along came cloud computing–in the true business sense of the word. It changed expectations in the rest of the company. The CEO called the CIO into his office and said, “Why does it take us nine months to deploy a new version of our CRM when the VP of sales tells me he can have a new CRM from Salesforce.com running in a week?” And it wasn’t just SaaS; as testing, QA, and R&D started playing with Amazon’s EC2, that changed the expectations.

But it doesn’t make internal IT a cloud. Because of this, enterprise cloud computing is a temporary, transient thing that’s just a stepping stone to clouds-as-a-business-model.

Plenty of consulting firms are offering to re-tool enterprise IT with cloud-like technologies, promising reduced costs and faster IT deployments. “Let us define the architecture, then run it for you, and everything will be just fine,” they promise. And for the next five years, it will be. That’s because the savings from virtualization, automation, and other technologies will get the CEO to leave the CIO alone for a while.

Cloud operators, meanwhile, are getting much, much more efficient in other ways. They’re negotiating with cities for electrical pricing. Filing patents on boats that can sail the seas, cooling themselves with seawater. Building data centers near dams. Writing their own operations software. Building custom switches.

They can do these things because, unlike enterprise IT, making IT efficient is their core business. An enterprise CIO might do internal charge-backs because it helps with end-of-year accounting. But a cloud provider does it because otherwise they don’t get paid, which is a much stronger reason to do it right.

Trust is the last excuse to hug your servers. And it, too, will go away.

So here’s my big prediction for cloud computing:

For the next three or four years, enterprises will deploy private and hybrid clouds, putting millions into the coffers of consulting companies and business process outsourcers. There will be great savings, and rejoicing.

Within a few years, however, the true cloud operators will have an unavoidable cost advantage because it’s all they worry about. They’ll also be closer to consumers (because they have POPs everywhere and partnerships with content delivery systems), and connecting with consumers and partners will become an increasingly essential part of any enterprise IT strategy.

Computing legislation will catch up, and we’ll find better ways of auditing and inspecting systems we don’t own that will satisfy regulators. Government adoption of cloud computing, ubiquitous access to data, and the consumerization of IT will drive this.

As a result, in three to five years, there will be a second big enterprise IT migration from private to public infrastructures.

Don’t believe everything you hear about private clouds. Just because you’ve finally fixed IT doesn’t make you a long-term cloud computing provider. Plan accordingly.

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