Business leaders and IT executives have their heads in the cloud these days — and with good reason. Rapidly evolving cloud computing platforms appear capable of delivering the kind of business benefits and technology efficiencies that organizations have been daydreaming about for years.
“Most of the IT innovation we’ve seen for the past several years seems to be converging in the cloud,” said Vince Conroy, CTO, FusionStorm. “Ideas such as Software as a Service, Web 2.0, service-oriented architectures, grid computing and utility computing are synthesized in the cloud, creating an overarching platform that represents a profound shift in how we think about computers, networks and data centers.”
Gartner analysts say cloud computing heralds an evolution of business that is “no less influential than e-business.” It is widely believed that cloud-based services will finally deliver on some of IT’s most elusive goals — aligning IT with business, decoupling services from underlying technology, data center automation and “green” computing. It is seen as a viable way to reduce capital expenditures and operational costs, thus freeing up resources and money that can be diverted to achieving core business objectives.
Cutting Costs
While formal definitions are still being debated, cloud computing fundamentally describes a computing model in which data, applications and storage are hosted in massive data centers by third-party providers and accessed remotely over the Internet via various clients and platforms. The cloud thus delivers enormous amounts of computing power and storage while offering practically limitless scalability and elasticity. Moreover, customers do not own the physical infrastructure. They leverage the efficiency and economies of scale of providers to build and deploy IT services faster and cheaper than ever before.
“The cloud shifts the focus from infrastructure implementations onto the services and capabilities that can be achieved,” said Conroy. “Although many companies will argue about how to best implement cloud services, the ultimate measure of success will be how the services are consumed and whether that creates business value.”
One of the obvious business benefits is reduced acquisition and deployment costs. Paying for service on demand requires less upfront capital and allows businesses to efficiently ramp up and power down based on current needs, as well as providing the flexibility to introduce new IT services.
“One way of describing cloud computing is to compare it to a utility,” said Jeff Spivey, trustee for the IT Governance Institute. “In the same way businesses pay for the amount of electricity, gas and water that they use, there is now the ability to pay for IT services based on how much is consumed.”
Enabling Innovation
Cloud computing fosters business innovation by enabling organizations to take on tasks or services that might be cost prohibitive if onsite hardware and software purchases were required. For example, the New York Times leveraged the computing power and scalability of a third-party cloud provider to create TimesMachine, a Flash-based archive of back issues of the paper from the 1850s to 1920s. In less than a day, the Times was able to convert 4TB of raw-image TIFF data into 1.1 million finished PDFs — at a computation cost of just $240.
Architecturally, cloud computing provides business value by masking complexity. The technology behind the user interface is essentially invisible to the user, making cloud computing very user-friendly. This means end-users can be less tech-savvy and more focused on their particular expertise and business function. What’s more, anywhere/anytime access from any device improves user mobility and enables collaboration regardless of geographic location.
Transforming the Data Center
With the ability to provide convenient, on-demand access to a shared pool of resources that can be rapidly provisioned with minimal management effort, cloud computing also presents extraordinary possibilities for data center transformation. Frequently based on decades-old technology, many of today’s data centers have become too complex, too costly and too difficult to manage. Gartner reports that more than 70 percent of Global 1,000 organizations expect that they will need to significantly modify their data center facilities by 2012.
Environmental issues have become increasingly worrisome. Power costs for data centers have skyrocketed by 800 percent since 1996. But even if power wasn’t an issue, it is becoming almost impossible to cool the data center space. Traditional cooling systems simply weren’t built for today’s high-density computing environment.
“The hidden cost of such data center pain is the loss of business innovation,” said Conroy. “The time and money being spent on server administration could be better used to promote initiatives that drive the organization forward.”
Cloud computing addresses these pain point by reducing data center real estate requirements, driving down power and cooling costs in the process. In essence, organizations transfer power, cooling and space burdens to the cloud service provider. The U.S. General Services Administration provides an illustrative case study. In the first year after moving its USA.gov Web site to the cloud, the GSA saved $1.7 million in energy and systems maintenance costs and reduced the number of servers required to run the site from 45 to three.
As with any new technology, cloud computing is not without risks and challenges. Application integration and security are the concerns most frequently cited by organizations exploring cloud adoption. Planning and preparation are essential. However, organizations that keep their feet on the ground by doing their homework, establishing a clear strategy and determining an end goal are likely to find that moving into the cloud will deliver positively dreamy results.