Cloud clout: Who are the real powers in the cloud?

Cloud computing looks like it will reshape the IT landscape, but which vendors are the real powerhouses behind that change. We pick out the Big Five — plus one to watch

It is hardly surprising that vendors of every hue want a piece of cloud computing. Investment in cloud services is set to grow at a compound annual rate of 27 percent, rising from $16.2bn in 2008 to $42bn in 2012, according to research firm IDC.

That growth translates into an almost threefold jump in usage and will lead to cloud computing accounting for nine percent of total customer expenditure by 2012, compared with only four percent last year. IDC reckons the adoption of cloud is increasing more than five times faster than the traditional on-premise IT and in three years will account for 25 percent of the industry's year-on-year growth. Uptake will be fastest among small to medium-sized businesses and in developing countries.

So in a market where every supplier with even the humblest of services is now claiming to be in the cloud game, who are the five biggest market influencers — the cloud vendors with clout?

CLOUD'S BIG FIVE: Amazon

Amazon is one of the early pioneers of cloud computing. After the dot-com bust, the vendor revamped the datacentres behind its e-commerce operation and decided to recoup the investment by selling its internal web-based services to third-party developers.

The launch of the Elastic Compute Cloud (EC2) under the Amazon Web Services banner in August 2006 was one of the first times the term 'cloud' had been attached to a commercially available, pay-as-you-go online service, although the term itself had been used generically to refer to the internet for at least a decade. The vendor is still considered to be a leader in cloud computing and its moves are watched closely by the rest of the market.

How long has Amazon operated in cloud computing?
Amazon Web Services launched its first cloud service, the Simple Storage Service (S3), in March 2006.

What cloud services does it provide and what is the pricing model?
Amazon Web Services is aimed at developers and has 49,000 registered individuals. It offers the following services:

  • EC2 provides developers with access to server capacity as required, enabling them to use either a pre-configured Amazon Machine Image or to create their own, containing their applications, libraries, data and configuration settings. Pricing is on a per-instance, per-hour basis for server capacity and per-GB, per-month for storage. Charges are also made for accessing data held in that storage and for transferring data between Amazon services in different regions.
  • S3 enables users to store and retrieve data. Pricing is on a per-GB, per-month basis. Fees are also charged for accessing and removing data.
  • Simple Queue Services (SQS) enable customers to move data between the different distributed components of their workflow-based applications without losing messages and without each component having to be constantly available. Charges are made for messages sent, for data transfer in and out of SQS and for SQS requests.
  • SimpleDB is in beta and enables users to undertake indexing and querying of data held in S3 and EC2. No charge for the first 25 machine hours, 1GB of data transfer and 1GB of storage, but there are per-month charges for subsequent additional use.
  • CloudFront is in beta and enables developers to distribute content and files stored in S3 to end users. Charging is based on GB of data transferred per month.
  • Flexible Payments Service provides developers with a means of making and accepting payments on their website for the sale of goods or services. Fees are charged per transaction depending on size of transaction and payment method.

What back-end cloud infrastructure does Amazon have in place?
Amazon declined to provide any details.

What service-level agreements (SLAs) or security controls does it provide?
SLAs are available for S3 and EC2. With S3, customers are provided with service credits if their monthly uptime falls below 99.9 percent in a given billing cycle. With EC2, service credits are provided if availability falls below 99.95 percent within a rolling 12-month period.

The company follows a three-tier security model focusing on physical security, which includes the location of its datacentres; operational security, which means that only a limited number of staff have access to datacentre facilities; and programmatic security.

Programmatic security involves customers being provided with control of their own virtual instances at a root level, with Amazon not delving "into what you do inside them" as "a matter of policy", according to a spokeswoman.

The vendor is also working towards compliance with the American Institute of Certified Public Accountants Statement on Auditing Standards (SAS) 70 Type 2 standard. This standard looks at organisations' objectives and activities in relation to controls in areas such as IT and financial reporting.

What procedures does Amazon operate if customers should decide to switch vendors or bring services back in-house?
Amazon told ZDNet UK that developers are not "locked in to a particular programming model, language or operating system".

How does it position itself in terms of cloud computing?
The Amazon spokeswoman said: "We've been at this for three years now. The platform of infrastructure services that Amazon Web Services offers are based on Amazon's own back-end technology infrastructure that we've spent over a decade building into one of the world's most reliable, scalable and cost-efficient web infrastructures.

"Flexibility is key. Our customers tell us that they want the flexibility to build their applications in the way they want to — and they don't want to be locked into a particular programming model, language or operating system."

CLOUD'S BIG FIVE: Google

Search giant Google is one of the early pioneers of cloud computing. Although the company was early to market with its Google Apps online personal productivity applications, which were launched in 2004, at the time it described the offerings as software-as-a-service (SaaS).

The company did not start using the term 'cloud computing' for another couple of years, but is nonetheless considered something of a poster child for the service delivery model. It is at the very least one of the concept's biggest advocates as its advertising-based business model is predicated on it.

How long has Google operated in cloud computing?
The company was set up in 1998, but introduced its first cloud service beyond its online search tool on 1 April, 2004.

What cloud services does it provide and what is the pricing model?
Examples of web-based services delivered using a cloud-computing infrastructure are Search and Gmail, which are both advertising-based and free to users.

Google's SaaS products are known as the Google Apps suite of personal productivity applications. The suite comes in three versions and is used by more than one million customers.

Then there is Standard Edition, which is advertising-based and includes email, calendaring and word processing. There is a 50-user limit for small businesses, after which they must upgrade to Premier Edition, which also includes applications and services such as email security and archiving and telephone support. It costs $50 per user account, per year. Education Edition provides Premier Edition services to not-for-profit and educational establishments for free.

In May 2008, Google launched the development and deployment platform App Engine, which is aimed at developers building consumer applications. It is in limited preview release or beta, but a full business version is due to follow.

What back-end cloud infrastructure does Google have in place?
Google declined to provide details on the number of its datacentres or their locations, but said its cloud services were located around the world and delivered from the same facilities as its online search tool.

What service-level agreements (SLAs) or security controls does Google provide?
Google Apps Premier Edition comes with a 99.9 percent uptime SLA. The company's datacentres comply with the American Institute of Certified Public Accountant's Statement on Auditing Standards (SAS) 70 Type 2 standard.

What procedures does Google operate if customers should decide to switch vendors or bring services back in-house?
Google includes proprietary application programming interface level tools in its products to enable customers to pull data from existing systems and to extract it if they wish to migrate elsewhere. It also supports industry standards such as Internet Message Access Protocol (Imap) for email message retrieval and document formats such as OpenOffice and Microsoft Word.

How does it position itself in terms of cloud computing?
Dave Armstrong, Google's director of enterprise for Europe, the Middle East and Africa, says: "Google originated in the cloud. It's where we were born so we have that heritage and carry it through in everything we do. Having started with search, we've got the infrastructure today to solve our users' problems. But the fact that we were born online means that we don't lock people in and we have the business model to underpin our activities and make them sustainable."

CLOUD'S BIG FIVE: HP

HP has been a relatively low-key advocate of the cloud concept, but nonetheless the company is influential because of its presence in the datacentre and its strength at board level via its acquisition of EDS in August 2008. For the moment, the supplier is positioning itself more as a provider of enabling technology for the cloud than a cloud services provider, but it will undoubtedly follow the money as the market evolves.

How long has HP operated in the cloud space?
Its first service delivered using a cloud computing-based infrastructure was launched in 2004.

What cloud services does it provide and what is the pricing model?
HP's web-based services delivered using a cloud-computing infrastructure include its pay-as-you-go Snapfish, which provides digital photo printing services, and MagCloud, a self-publishing service to enable individuals or small businesses to print their own books and magazines. It costs $0.20 per page, plus shipping.

HP Labs is working with Intel and Yahoo to provide researchers and academics with a test bed. The aim is to enable academic institutions to test out application requirements in a cloud environment to understand the character of workloads and how they behave. HP Labs will use the findings to see whether existing technology stacks are good enough for future requirements and work out how best to develop its cloud infrastructure.

What back-end cloud infrastructure does HP have in place?
The vendor does not have specific cloud datacentres, but uses capacity in its own and EDS facilities across the world.

How does it position itself in terms of cloud computing?
Ian Brooks, HP's head of innovation and sustainable computing for the UK and Ireland, says: "Consumers and smaller companies are looking at services being provided through the public cloud and we've had offerings in that area for a while. Enterprises with complex business models, however, want the value that cloud can offer, but are not willing to go down the public internet path. So they're looking at helping them to develop flexible, easy-to-deploy architectures internally.

"We provide the underpinning technology and can either build them a 'private' cloud or offer it on a more intranet-style basis with overflow compute capabilities as well. We can also provide the enabling technology and build the infrastructure for public cloud providers as well as overflow compute capabilities too. But the cloud is a moving market so we'll move with it and see where it needs to go."

CLOUD'S BIG FIVE: IBM

IBM has been pitching the utility-computing, computing on-demand message for at least seven years as a means of selling more systems and services. Consequently, the company has been happy to latch onto the cloud concept as an extension of existing activities. The vendor — perhaps afraid of being left behind and having to play catch-up as it did when the world moved to client-server — is adopting the new service-delivery model wholeheartedly across its business. Given IBM's general market strength, it is always one to watch, not least because of the credibility it provides when it enters new sectors.

How long has it operated in the cloud space?
IBM entered the cloud market in 2004 when it introduced Deep Computing on Demand (CoD) for supercomputer users.

What cloud services does it provide and what is the pricing model?
The CoD service evolved out of Deep CoD about 18 months ago to provide customers with access to more generic raw computing power. Users pay an annual membership fee for a VPN connection to IBM's datacentre and the ability to store their software stack on a home-node management server.

They then submit a request for extra computing power via the CoD portal when they require it and this is billed on the basis of per-processor time. Storage capacity is priced per GB, per week. The service has between 50 and 100 customers and is run from three datacentres: one in New York, one on the west coast of the US and the other just outside Dublin.

Other CoD-based services include offering customers a catalogue of pre-loaded software, such as the WebSphere application server on a CoD-based compute node, so that they can chose from a menu and use it immediately rather than having to load it themselves in advance. IBM would also manage and maintain the service rather than users needing to do so.

IBM's information protection services provide users with data backup, recovery and archiving services, on a pay-as-you-go per gigabyte basis. The service is supplied jointly by 10 IBM datacentres and another 67 belonging to partners of the vendor's 2008 Arsenal Digital Solutions acquisition. It has about 3,000 customers.

The vendor's SaaS products include LotusLive collaboration applications, which are paid for by the hour for online meetings, events and webinars and by the amount of storage used for emails. This service is provided from two IBM datacentres.

What back-end cloud infrastructure does it have in place?
On top of existing datacentres, Rick Telford, IBM's vice president of cloud services, says that to handle local data-privacy laws, the company is prepared to build new facilities in countries that stipulate data must reside within national boundaries.

"We're going to build cloud-delivery centres with countries' data privacy laws in mind. I don't know if we'll have to build one in every country — it will be based on market demand. But if needs be, we'll build one or work through our partners," he says.

What service-level agreements (SLAs) or security controls does IBM provide?
Each cloud service has its own set of terms and conditions and, according to Telford, the vendor provides the enterprise SLAs "that CIOs and large enterprises are accustomed to" for all of them.

The company's datacentres also comply with the American Institute of Certified Public Accountant's Statement on Auditing Standards (SAS) 70 Type 2 standard.

What procedures exist should customers decide to switch vendors or bring services in-house?
"Our approach is to use standards-based application programming interfaces where they exist. Where they don't, we'll help to drive those sets of cloud standards that make sense for our customers," Telford says.

Examples of cloud standards include the creation of a web-services interface to provide a standard way of requesting cloud services from all vendors and a file-service interface to ensure that cloud services appear as simply another file system to users.

How does it position itself in terms of cloud computing?
Telford says: "We believe that there'll be a hybrid model of IT delivery, but for the next five years, most of the workloads that are delivered by IT today will be delivered in the same way. But only about 20 percent of typical workloads in any datacentre are mission-critical. The rest are commercial, off-the-shelf or not mission-critical, and it's that 80 percent that we want to look at delivering more cost-effectively.

"So there are two other options: public cloud services, delivered over the internet, and private clouds. As the public cloud delivery model becomes more important to customers, we'll continue to add to our portfolio in areas where there's a need or demand. With the third model, however, we'll help customers to transform parts of their datacentre to take advantage of the cloud delivery model without having to worry about going outside the firewall. This makes sense for workloads where compliance is an issue, for example."

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CLOUD'S BIG FIVE: Salesforce.com

Salesforce.com has long been the prime exponent of SaaS, and has more recently taken a leaf out of Microsoft's book by attempting to grow an application ecosystem through the launch of its platform-as-a-service products in a bid to broaden its appeal. It has retained the advantage afforded by being among the first to market and remains a leader rather than a follower in this largest segment of the cloud market.

How long has it operated in cloud computing?
The company opened for business in 1999 as a dedicated SaaS provider.

What cloud services does it provide and what is the pricing model?
The vendor has two cloud-based offerings. First are CRM applications, which include salesforce automation, service and support, and marketing. The firm's AppExchange also enables subscribing customers to use third-party packages that are pre-integrated with its own. The applications business has about 50,000 customer organisations today, paying per-user, per-month.

The firm also offers Force.com, which is a development and deployment environment that enables programmers and software vendors to assemble components to create applications and then run them in the cloud. There are about 55,000 organisations using it today, paying per-user, per-month.

What back-end cloud infrastructure does Salesforce.com have in place?
The company declined to provide details beyond saying it has 'multiple' US datacentres supporting 10 billion server transactions every quarter.

What service-level agreements (SLAs) or security controls does Salesforce.com provide?
According to Andy Jacques, senior vice president of Northern Europe, Middle East and Africa: "The biggest SLA is confidence and because all of our customers run on the same multi-tenant platform, they know that the service is guaranteed in the same way for all of them. There's no contract that can hold greater weight than that, but we do get into conversations on a case-by-case basis".

The company's datacentres comply with the ISO27001 information assurance standard and the American Institute of Certified Public Accountant's Statement on Auditing Standards (SAS) 70 Type 2 standard.

What procedures does Salesforce.com operate should customers decide to switch vendors or bring services back in-house?
Customer data is extracted from the vendor's databases using standards such as Comma Separated Value (CSV) files. The data is then shipped to them using a variety of methods such as CDs sent through the post or via an internet download.

How does it position itself in terms of cloud computing?
Jacques says: "We're the leading software-as-a-service provider and were the first to market. We've been operating in this space since 1999 and are coming up to our 10th anniversary. So all we've ever done is cloud and if you look at our core message and the spirit of the company, it's all about taking away the infrastructure burden to allow customers to focus on running their business and driving innovation."

ONE TO WATCH: Microsoft

Microsoft has consistently been late with all things relating to the internet and its move to the cloud is no exception. But Microsoft being Microsoft, such delays are unlikely to dent its influence over its all-important application development community or the broader value-added reseller channel, to which it invariably manages to sell its world view.

The vendor will be one to watch when it enters the market in the second half of 2009 — even though it faces attacks from all sides, and from Google, Amazon and Salesforce.com in particular.

How long has it operated in cloud computing?
Microsoft plans to launch its Azure Services Platform in the second half of 2009.

What cloud services does it provide and what is the pricing model?
The Azure Services Platform is targeted at developers, software vendors and systems integrators wanting to build web-based consumer services or line-of-business application-based services for businesses. Details will be unveiled when the service is launched, but pricing will be based on consumption and subscribers' business models. It will also include pre-payment options.

Microsoft also has non-cloud web-based services, such as the Hotmail free consumer email service with 350 million users, and the Xbox Live online gaming service with more than 17 million active accounts. Silver membership is free, but gold membership costs $49.99 per annum.

Examples of hosted rather than cloud-based SaaS include Microsoft Dynamics CRM Online. This service is only offered in the US and Canada, but has 15,500 customers who pay $44 per user per month. There is also the Business Productivity Online Standard Suite, which provides communication and collaboration tools, starting at $15 per user per month.

The vendor is in the process of moving all its SaaS products and web-based services over to the Azure Platform. The migrated SaaS offerings will be come under the Microsoft Online Services banner as they become available, as will any new third-party applications created by the company's development partners using the new environment.

What back-end cloud infrastructure does it have in place?
The supplier has datacentres in Quincy, Washington and San Antonio, Texas, but is in the process of building others in Chicago, Des Moines, Iowa and Dublin.

What service-level agreements (SLAs) or security controls does Microsoft provide?
Azure will come with SLAs and Quality of Service guarantees. Doug Hauger, Microsoft's general manager of marketing and business strategy for cloud infrastructure services, says: 'Security is a top priority." More details on both areas will be released at launch.

What procedures does it have in terms of migration should customers decide to switch vendors or bring services back in-house?
The vendor will support industry standards and protocols such as Soap, Rest and XML to make data portability as straightforward as possible for its customers, says Hauger.

How does it position itself in terms of cloud computing?
Hauger says: "What we're doing is bringing our enterprise expertise from the on-premise world to the cloud to ensure that the platform is robust. But we want to offer customers choice and flexibility in how they use our technology — whether it's on premise or run by Microsoft in our datacentres, or a mixture of the two. We have the largest installed base of software of any vendor so we're able to integrate that with cloud services in a value-added way.

"So, for example, with the Zune music player, because it's not a browser-only application, you need to install some software on your PC. You pay a monthly fee to access millions of songs in the cloud so it's scalable, but you look after your local music collection on your machine to give you a robust music-management experience. That wouldn't be possible with just a browser-based application, so our approach gives you the best of both worlds."

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