The Future looks very Cloudy

The Future looks very Cloudy

Summary: I've just attended the one day, highly-focused executive 'Cloud Summit' conference. The Cloud—used to describe everything from internet-based computing utilities to Software as a Service — was examined and its future impact explored within the highly appropriate venue of the Silicon Valley Computer History Museum.

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computer history museumI've just attended the one day, highly-focused executive 'Cloud Summit' conference. The Cloud—used to describe everything from internet-based computing utilities to Software as a Service — was examined and its future impact explored within the highly appropriate venue of the Silicon Valley Computer History Museum.

The exhibits on the ground floor of the museum are dominated by huge underpowered old computing behemoths, while upstairs in the main conference hall attempts were made to parse the implications of next generation utility computing.

The conference is targeted for executive decision makers, so I was looking forward to hearing strategic and tactical discussion around the pluses and minuses of cloud and SaaS from those in the trenches.

A quick straw poll of attendees in the caffeine breaks proved the economy was top of mind, and the financial upheaval of the last couple of weeks appears to have reset IT management minds grappling with budget constraints to look to the cloud with renewed openness. As 'reduction in force' reports from around the SaaS industry start to appear - an inevitable resetting of resources to weather the attrition of recession and conserve funding - the silver lining is that cloud hosting and associated SaaS apps are arguably in a stronger position than ever based on their ability to deliver a scalable subscription based service that are a better fit for budgets that are being given increasingly short haircuts.

My quote of the day was from Jeffrey Koser, author of 'Selling to Zebras' in the 'Selling the Cloud to Wall Street and Main Street' session who said "The number one reason executives don't buy software solutions is because they don't believe their staff will be able to operate it". This along with recession induced fear and apathy appear to be the biggest competitors to adoption in an environment hungry for cost effective solutions.

Focusing on people and their processes is a far more effective way of selling software as a solution to tactical problems than offering a software package as a cure-all panacea.

Thomas E. Hogan 'Senior Vice President Hewlett Packard Software' had kicked things off earlier with a strong presentation: the 80/20% mix of consumer to business software is gradually shifting with business taking advantage of the immense innovation of the last few years in the consumer space. Tom cited some amazing statistics: 87 billion emails are sent a day in a digital universe that currently doubles every eighteen months, with net attached devices doubling in number every two years.

65% of IT budget goes to operations, and it costs 100 times more to fix problems post software deployment vs at the tactical planning stage. Hogan was clear that HP is very committed to cloud as part of a hybrid approach to service delivery for the enterprise.

To take advantage of this disruptive new paradigm, Hogan recommended taking inventory of your service attributes, build a short and long term service channel strategy to enable a flexible/scalable IT infrastructure for on-premise services.

A common topic in multiple sessions was the concept of private and/or hosted clouds (an example of a private cloud would be GE's Support Central collaboration environment, which has an internal cloud hosting its various tools and technologies).

Switching gears, John Maddison, VP of Core Technology Solutions at Trend Micro, treated us to Halloween scare stories of criminal usage of the cloud. Security is a subject which strikes fear into the hearts of many an IT executive and is a major barrier to cloud adoption.

In fact John pointed out that existing losses - 60 billion in the US alone - require increasingly huge bandwidth for preventive criminal pattern detection downloads from Trend, and that the cloud is a much more manageable solution to mitigate security risk. Upload and download of over 50,000 criminal patterns is a pricey proposition to physical servers: the $6 billion security market - dominated by Trend, mcAfee and Symantec - all comes down to execution which is easier and less expensive to their clients using the cloud.

The separate issue of protecting company IP and conforming to regulation and compliance such as Sarbanes Oxley came up on the 'Understanding Enterprise Requirements for the Cloud' panel. IT executives can go to jail if their compliance strategy is inadequate, so clarity and options in the event of failure are critical to successful uptake.

In the context of the Computer History Museum it seems inevitable that despite the many planning hurdles still to be overcome the budget attractions of cloud and SaaS will likely render some costly enterprise IT department hosted and run systems obsolete.

Topics: Software, CXO, Cloud, Emerging Tech, IT Employment

About

Oliver Marks leads the Global Digital Enterprise Team at HP, having previously provided seasoned independent consulting guidance to companies on effective planning of business strategy, tactics, technology decisions, roll out and enduring use models that make best use of modern collaborative and social networking tools to achieve their business goals.

These are Oliver's views and not those of his employer HP.

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3 comments
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  • More Short Term Thinking To fix Short Term Thinking, Thanks!

    The current financial crisis was caused by unrestricted greed and everyone looking to make the most money at any future cost. As long as the books were good today, who cared what happened tomorrow.

    This knee jerk adoption of cloud based computing based on it's low price tag is just more of the same type of thinking. The long term effect will be just the same as the long term effects of bad long range financial planning. The tax-payers/end users get to pay the bill. When my company has to go out of business because a third party cloud computing host goes off line for a week, I am going to be truly upset. Why would any sane manager give all of their corporate data to a third party person who can't guarantee what they will do with that data?????

    The a huge problem with corporations is they still haven't figured out that IT departments are not economic losses. In many cases they support the entire business model and allow the organization as a whole to be profitable. Outsourcing your IT sounds good as a short term solution but what do you do when your entire business goes into bankruptcy because the folks at Google decided it was "Play in the Sand Box with Colored Balls Week". Your customers are screaming that their services are down and your answer to them is, "Well there is nothing we can do until our vendor fixes the problem." The answer to that is "Cancel my account I am going to take my money and business to a more reliable company."
    Also, do corporate manager really think it is a good idea to put their business plans, financial data, strategies in the hands of third parties???? Hello I am from the USA Government, I would like to subpoena the records and data for company A. No need to contact Company A when we have our case built we will definitely contact them." Every single company that has ever handled data for other users has voluntarily given it to any government that has requested it. Think about that.
    mr1972
  • The economy could accelerate the move to the cloud. When money is no object

    the status quo usually wins, as it is the safe position for the managers. The cloud will win out over time, as it greatly reduces the cost of software delivery, and the same time adding many advantages.
    DonnieBoy
    • What about Data Ownership?

      I have heard so many people compare "The Cloud" to other types of outsourcing. "We already outsource our manufacturing, why not outsource the IT that supports it? After all we trust vendors to do one thing why not trust them to do something else."

      The quick and simple answer is that outsourcing usually uses legal contracts where each entity has clearly spelled out rights and obligations. In other words, an American company that outsources it's manufacturing does not automatically loose it's IP rights to it's products. The American company still owns their own products and if one Chinese company fails for some reason, the American company is free to contract with another company.

      NOT SO WITH CLOUD COMPUTING!!!!!
      You are not simply outsourcing a service, you are giving up your IP rights!!!!!
      READ THE END USERS LICENSING AGREEMENTS!!!!!!!!
      THEY ALL HAVE CLAUSES THAT ALLOW THE VENDOR TO CHANGE ANY AGREEMENT, AT ANY TIME, FOR ANY REASON. MOST ALSO HAVE CLAUSES WERE THEY CLAIM OWNERSHIP OF ANY AND ALL DATA THEY HANDLE!!!!!!!

      This is very different from how normal outsourcing is handled.

      So far I have seen many companies rush to jump on the cloud but what happens when the vendor steals the product and legally gets away with it????
      mr1972