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Private cloud discredited, part 2

By | April 13, 2011, 3:08pm PDT

Summary: Two respected enterprise cloud pioneers have provided the evidence I’d been waiting for to declare private cloud a busted flush.

I wrote part 1 of this post last October, highlighting a Microsoft white paper that convincingly established the economic case for multi-tenant, public clouds over single-enterprise, private infrastructures. Part 2 would wait, I wrote then, for “the other shoe still waiting to drop … a complete rebuttal of all the arguments over security, reliability and control that are made to justify private cloud initiatives. The dreadful fragility and brittleness of the private cloud model has yet to be fully exposed.”

The other shoe dropped last month, and from an unexpected direction. Rather than an analyst survey or research finding, it came in a firestorm of tweets and two blog posts by a pair of respected enterprise IT folk. One of them is Adrian Cockcroft, CIO of Cloud Architect for Netflix, a passionate adopter of public cloud infrastructure. The other is Christian Reilly, who engineers global systems at a large multinational and had been a passionate advocate of private cloud on his personal blog and Twitter stream until what proved to be a revelatory visit to Netflix HQ:

“The subsequent resignation of my self imposed title of President of The Private Cloud was really nothing more than a frustrated exhalation of four years of hard work (yes, it took us that long to build our private cloud).”

Taken together, the coalface testimony of these two enterprise cloud pioneers provides the evidence I’d been waiting for to declare private cloud comprehensively discredited — not only economically but now also strategically. There will still be plenty of private cloud about, but no one will be boasting about it any more.

As both these individuals make clear, the case for private cloud is based on organizational politics, not technology. The pace of migration to the public cloud is dictated solely by the art of the humanly possible. In Cockcroft’s words, “There is no technical reason for private cloud to exist.” Or as Reilly put it, “it can bring efficiencies and value in areas where you can absolutely NOT get the stakeholder alignment and buy in that you need to deal with the $, FUD and internal politics that are barriers to public cloud.”

Cockcroft’s post systematically demolishes the arguments for public cloud:

  • Too risky? “The bigger risk for Netflix was that we wouldn’t scale and have the agility to compete.”
  • Not secure? “This is just FUD. The enterprise vendors … are sowing this fear, uncertainty and doubt in their customer base to slow down adoption of public clouds.”
  • Loss of control? “What does it cost to build a private cloud, and how long does it take, and how many consultants and top tier ITops staff do you have to hire? … allocate that money to the development organization, hire more developers and rewrite your legacy apps to run on the public cloud.”

Then he adds his killer punch:

“The train wrecks will come as ITops discover that it’s much harder and more expensive than they thought, and takes a lot longer than expected to build a private cloud. Meanwhile their developer organization won’t be waiting for them.”

But it’s Reilly who adds the devastating coup de grace for private cloud:

“Building the private cloud that is devoid of any plan or funding to make architectural changes to today’s enterprise applications does not provide us any tangible transitional advantage, nor does it position our organization to make a move to public cloud.”

In a nutshell, an enterprise that builds a private cloud will spend more, achieve less and increase its risk exposure, while progressing no further along the path towards building a cloud applications infrastructure. It’s a damning indictment of the private cloud model from two CIOs top enterprise cloud architects who have practical, hands-on experience that informs what they’re saying. Their message is that private cloud is a diversion and a distraction from the task of embracing cloud computing in the enterprise. It can only make sense as a temporary staging post in the context of a systematically planned transition to public cloud infrastructure.

[UPDATED 03:45am April 14: I have made small amendments to Christian Reilly and Adrian Cockcroft's job descriptions at their request.  Reilly also commented via Twitter that this post "doesn't really capture the spirit my blog was written in," which I completely accept. He went on: "the point of the blog was to highlight the differences in how enterprises approach cloud versus orgs who build their business on it." Read his original post.]

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Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

Disclosure

Phil Wainewright

Phil Wainewright's work as an independent consultant brings him into direct or indirect business relationships with several of the companies that he writes about, or their competitors. Phil is committed to maintaining the independent and opinionated stance that his writings are well known for and does not enter into contracts that would limit his freedom of expression in any way. However it is important in the interests of full disclosure to inform readers of those relationships so they can form their own judgement.

Read the complete list of Phil's relationships.

Biography

Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant. He founded pioneering website ASPnews.com, and later Loosely Coupled, which covered enterprise adoption of web services and SOA. As CEO of strategic consulting group Procullux Ventures, he has developed an evaluation framework to help ISVs and enterprises select cloud platforms, and advises US and European vendors on messaging, positioning and go-to-market. His newest role as an industry advocate is vice-president of EuroCloud.

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RE: Private cloud discredited, part 2
FAULKNE 13th Oct
Good day to confirm this comment I would appreciate T h e b e s t o f Z D N e t d e l i v e r e d your website very nice to everyone Yes, Oracle is the only one with shared-disk architecture, but that is there advantage. It means you can add or remove nodes and the database lives on. In a shared nothing architecture, if you lose a node, you lose the system. I'm sure Oracle appreciates EMC highlighting their advantage.I also desire to signal in your RSS feeds. Thank you as soon as once again and maintain up the great operate Awesome post! Thank you very much || thanks for nice content this is really benefit to me.
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Utter nonsense.
John Zern 13th Apr 2011
Not even worth commenting on beyond that.
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RE: Private cloud discredited, part 2
ALIRAZ@... 15th Apr 2011
@John Zern Thank you for that insightful and well developed opinion piece. Others might have enjoyed his hard work and research.
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RE: Private cloud discredited, part 2
dbschneier 14th Apr 2011
Curious to learn how companies using public Clouds can adequately address the requirements of the various regulations. And as a Netflix customer who has provided them non-public personal information (NPPI) that includes data elements governed by PCI I sort of demand they prove that I'm protected.
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What part of PCI certification ...
RationalGuy 14th Apr 2011
@dbschneier

... would necessarily be impossible to show if the infrastructure is sitting in a public cloud (please refer to specific sections of the PCI standards)?
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RE: Private cloud discredited, part 2
mhug@... 16th Apr 2011
@RationalGuy Not sure I understand your remark. Of course you know Amazon Web Services is PCI compliant (certification for PCI I obtained a few months ago)? Btw Netflix, runs on top of AWS as far as I know.
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Message has been deleted.
johnfenjackson@... Updated - 15th Apr 2011
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RE: Private cloud discredited, part 2
johnfenjackson@... 16th Apr 2011
@ZDNET censor@...

Guess my pointing out that the companies likely to own the public cloud pricing policy are not likely to pass on efficiencies to customers ... was too much to bear by the ZDNET thought police. I must write to Foremski and ask him about 'the real value of journalism'.

Perhaps the poster would care to explain how the cost of AMAZON storage or the cost of M$'$ Office 365 Plan E at $324 per year passes on economies of cloud scale to the customer?
Hi Phil,

Your "discrediting" of private clouds in this piece consists of an appeal to authority, where you serve up two CIO's who are Public Cloud enthusiasts, one of them a recent convert (or an apostate).

"The coalface testimony of these two enterprise cloud pioneers" tells me nothing new. In the case of Netflix, public clouds are perfect for some. In the case of Bechtel, some botch their private cloud implementation.

How does this discredit the fact that Private Clouds are perfect for thousands of other CIOs and organisations that prefer them for a multiplicity of reasons and implement them properly with the right tools?

The case for private cloud is not based solely on organizational politics, not technology. There are compelling technical reasons for many to choose specific private cloud solutions over public cloud offerings.

Scalability is not everything. Some, soberly and in full knowledge, trade economies of scale for features and performance.

I agree that many of the arguments against public clouds are bunk, but so are declarations that private clouds are "discredited".

By addressing - not "demolishing" - some of the objections to public clouds, Cockcroft does not discredit private clouds.

Hi "killer punch" as you label it is true but also completely irrelevant.

Cockburn predicts "train wrecks" as companies "discover that it?s much harder and more expensive than they thought, and takes a lot longer than expected to build a private cloud."

There have been companies (like Bechtel) that have found this to be true, but there are those who have had extremely successful, low cost, speedy private cloud deployments.

You cannot discredit private clouds because some people messed up their implementations.

As for O'Reilly's "devastating coup de grace" ( plenty of hyperbole today, huh!) , he merely asserts that building a private cloud without matching it with architectural changes to their applications, did not confer THEM with any advantage nor position THEM to move to the public cloud.

Is that really the coup de grace for private clouds?

So in a nutshell, you are asserting because some enterprises will botch their private cloud implementations (spend more, achieve less and increase its risk exposure) and not progress towards building a cloud applications infrastructure, that this is the story of private clouds.

We it is not.

Enterprises that build private clouds may well spend less, achieve more, lower their risks, satisfy their regulatory obligations and do so with a fully matured cloud application infrastructure deployed entirely on perfect-for-purpose private cloud platform.
As Reilly quotes Hoff: "Use the right tool for the right job and the right time and the right cost". For many, its a private cloud, for technical reasons. For others, its public cloud, for financial reasons.

I think this bogus private versus public clouds debate is the real diversion and a distraction from the task of helping the embrace of cloud computing in the enterprise.
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RE: Private cloud discredited, part 2
mmichalik 14th Apr 2011
@jondavis01 Beautiful reply Jon. Thank you for posting it.

Mike Michalik | CEO
Cirrhus9
http://www.cirrhus9.com
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RE: Private cloud discredited, part 2
OffsideInVancouver 14th Apr 2011
@jondavis01

Seconded, excellent response. I'm thinking government as the screaming example. They'll be building private clouds I assume, not just sticking their (our) data on Amazon's servers.

Reducing costs through economies of scale is a valid point, but some companies are so big they can generate their own, e.g. General Electric, Price Waterhouse Coopers, Walmart.
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brilliantly stated
GeiselS@... 14th Apr 2011
@jondavis01 Couldn't have said better myself. No different then the windows versus linux discussion...right tool for the right job at the right time.
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@jondavis01 Well put! Organisations can save huge amounts of money by not using public cloud infrastructure based on its cost models when the benefits of a multi-tenant cloud are not required or desired.

Further, internally built clouds can be a quantum leap for an organisation. We shed over 90% of our physical infrastructure to migrate it to a 'private cloud' - reduced 75% of our datacentre management costs associated with electricity and cooling - freed up space for us to grow in to again - and our private cloud costs a fraction of using the equivalent bandwidth and processing on a public cloud!

We also use a public multi-tenant cloud for hosting our externally facing applications because they have provisions around delivery that we could never match internally. This has cost us more in the short term - but the overheads of hardware and support should break it even within 12 months.

It's all about the right tool for the job!
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I agree with the viewpoint and I think that the private cloud is a tool to support this temporary stage of moving application and data into the public cloud computing. Phil is mentioning Adrian Cockcroft's (The Cloud Architect for Netflix) that talks about the "fear" of the CIO about "the unsecure public cloud". I personally think this is an excuse and this will slow down a positive evolution, though don't be suprised if a much faster adoption will hit the current expectations of the analysts (i.e Gartner).

Ofir
I Am OnDemand
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and disadvantages of the other (private), while totally ignoring the disadvantages of the public, and the advantages of the private.

You can claim anything you want at that point.
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BS
crowfly@... Updated - 14th Apr 2011
This is obviously part of a marketing campaign to feed Microsofts Cloud services products.
Anyone with an ounce of IT savvy should see right through this campaign of misinformation. It is total BS for MOST companies who already have large IT resources and budgets and lots of legacy apps. It will be another 10 years before entire apps can be rebuilt from scratch for the cloud-model for most large organizations. Then there is the problem that, if your internet goes down ever, you loose access to EVERYTHING, and your entire business come to a stop. Internet links are always going down in different areas, just ask someone who works for the ISP's.
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RE: Private cloud discredited, part 2
jeffpk Updated - 14th Apr 2011
This is a bit of a strawman.

The real issue is "cloud" type infrastructure at all.

I've built two companies on top of AWS (Rebel Money and the current Blue Fang Games) and in both cases AWS was more expensive, less reliable and more trouble then a co-lo solution. AWS style virtualization is horribly inefficient (built on top of VMs like Vmware) to begin with, and renting is always more expensive then owning. the fact of the matter is you DO lose any visibility into what your real hardware is and what it is doing-- we've had amazon instances fail multiple times from hardware failures and clocked *very* different performance from supposedly identical nodes. These were just a few of the issues encountered.

Why did we do it? Twice? It is convenient. It means you can avoid a commitment early on in a startup's life to a minimal hardware set and the time it takes to ramp up a colo situation.

But most of the rest of the cloud promises are still just promises. For anything beyond dumb web servers, the software isn't there to act like a utility and take machines on and off line automatically as needed. It takes too long, anyway, to ramp up an instance to do this on a frequency of much more then whole days


The compute cloud is still much like a real cloud... primarily vapor.
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RE: Private cloud discredited, part 2
shettinger 14th Apr 2011
Interesting article, seems crazy that twitter posts are able to be used as evidence to support an argument. The phrase "taking it out of context" comes to mind, with 140 characters no context is allowed so we just have speculations. I see this cloud movement as something only for big business to cut costs on data storage. In a small business if you have a single server os you can do everything the cloud offers. 2tb drives are under $100, I just dont see how a small business would benefit from the move. Granted I will note I am much more of a self reliant person, and would much rather have the job of keeping care of my own data than hand it over to a cloud and trust in their privacy measures however sound they may be. But much less of a chance someone tries to get my data stored on my personal servers than someone stealing data from a massive cloud full of all sorts of information. I would argue that sometimes we push these ideas once the technology exists and then we think about if we should have. What happened to thinking before acting?
An office PC costs $500 and lasts for 3-5 years. This is less than a fraction of the salary of the person operating that PC. A PC under a desk does not limit the creativity of the person at the desk. I doubt the same can be said about a cloud. One single spark of creativity may bring more income to a company than the cost of all its PCs and servers combined. So, no cloud benefits are seen from the client side.

Are there any benefits of moving the servers to the cloud that plain outsourcing does not provide? Theoretically, yes - they can react better to a sudden peak load. However, a SETI at home type of software can react even better.

Since the idea of a cloud is both absurd and popular, I guess cloud will develop into a very efficient money milking buzzword shortly. As for the topic of the article, I just do not care what kind of cloud will be more profitable to explain to clients.
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RE: Private cloud discredited, part 2
Techknowledgie 14th Apr 2011
@gak@... "Will develop"? The currently trendy usage of "cloud" was a "money milking buzzword" from day one. Take just about any advertisement from 1996 about "The Web" and replace "The Web" with "The Cloud" and bingo - recycled buzz for thousands of marketing dweebs who couldn't tell you the difference between a switch and a toaster.
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Time will prove that.
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Public vs private cloud
helenforwork 14th Apr 2011
In the world of negotiations, this is called putting someone into a double bind. You can use this technique to secure someone's agreement on a point that might otherwise be contentious. Don't want to argue cloud vs. no cloud? Presume cloud, and just negotiate which TYPE of cloud. For example, consider, "Would you like milk or sugar with your coffee?". Both push the coffee that the vendor gets a high margin on, and de-emphasize other options that might be a better fit for a customer, like imported teas.

Don't be fooled.

As gak points out, vendors are working hard to sell cloud to the masses, because they all see the unending revenue stream that heads their way once a client adopts the cloud. It's a good fit for some, BUT NOT ALL.

What I find funny is that mid-sized local service and retail businesses whose business is exclusively local (think local markets) are all excited about the buzzword, when cloud doesn't offer them much, and locks them in to a tremendous annual expense structure.

Cloud is good when:
1. You can make do without much of a systems staff, and dedicate that money instead toward your cloud provider. This is a viable option for small businesses who might be able to afford a developer, or an occasional consultant, but not the overhead of a systems dept. Think: outsourcing your customer service system to salesforce.com.
2. The people who need access to your information are spread all over the world. Cloud's ability to replicate to servers in geographic proximity to your site visitors can improve response time and reliability. Think: Microsoft's hosted Office products. If you had a popular app like MS Word that you wanted to share with the world, while keeping your code off their machines, cloud would help.
3. Your site has wildly varying demand characteristics, such that 330 days a year you might have almost no activity, but 35 days a year, it gets busy. Think: retail businesses that do 80% of their sales during the Christmas period.
4. You're a startup with a hunch that your good idea might catch on fast, and you want to be able to rapidly scale to meet demand (this is a variation on case 3). Think: Early days of sites like Twitter, LinkedIn, etc. (probably none of which used cloud, but cloud would help them rapidly scale up as they caught on).
5. You have an app that relies on speedy access to some cloud-based service and can subscribe to the same cloud in order to minimize communication time between your app and the cloud app on which it depends. (I dunno, maybe you're doing something fancy with a google doc, and need to reduce network latency between accesses to it?)

If you have a predictable low level of demand, and your traffic largely consists of local sales people showing customers how they can check their small fleet maintenance records on your auto shop's site, or customers scheduling their local grocery deliveries, etc., you probably don't need cloud. You may use a virtual hosting service (some might argue this is cloud, but it's been around forever, so I don't consider it such), or run your own server in-house if you're large enough to have a good network link (or speed and reliability of your site is less critical than saving money, in which case your server might be an old Intel Linux box sitting in a corner somewhere).
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Get Real ZDNet
GeiselS@... 14th Apr 2011
This article is horrible. Has anyone experienced a company that has had a network outage or a problem with their ISP? I tell you all hell breaks loose. Does this mean public clouds should be equated to fools gold? Not at all...it just means you need to consider all options and generally with all technologies, hybrid heterogenious solutions end up being the best. Can we get some real journalists back in the world or are we now simply accepting anyone that blogs is a journalist? UGH.
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One of the worse articles on the National Enquirer of the Internet.

There are hunderds and hundreds of people who have and are building private clouds today. Clustered servers with virtualized OS' and share storage with shared networking, memory and compute resources. This is the definition of what a private cloud is and this describes the majority of intranet's today.

What a terrible article....
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It seems this post was quite contentious and caused a fair amount of fray in the social media. Perhaps that was the objective. And due, to a large extent, to the title. The views expressed are valid, but two cases do not really constitute comprehensive evidence. And just because there are convincing cases for public cloud does not in the least imply that all applications of private cloud are discredited.

At many recent conferences, and in the technical media, cloud is often pitted as private VS public. This is a view that I, for one, have been discouraging. There are applications, use cases, and economic justifications for both, and one size or shape does not fit all. Going back to read Reilly's original post, on which part of this one was based, I find the following sensible quote (attributed to Hoff): "Use the right tool for the right job and the right time and the right cost." That applies to a lot of cases, and certainly to this one.
- stpowers (@CloudsAreGo)
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RE: Private cloud discredited, part 2
John238 Updated - 15th Apr 2011
My company has a private cloud, though I do not believe it is really called that by the home office, and they have had one for some time now.

Everything is available to me via IE or some browser. If I need customer documents, electronic copies of actual docs, I log into the home office servers. If I need to view production numbers, home office servers again. If I need to compile a list of customers that should be visited, based on a hundred or so different parameters, home office servers. If I need to send emails to others in the company, or anywhere, home office email system on the home office servers. If I need to send mass mailings to customers in the area, to customers of my sales force, to customers in the region, etc.. . . , mailings based on a hundred or so selectable parameters, home office servers. If I need to compile documents, home office servers (mail those docs, home office server). Store documents, home office server.

Training, download hundreds of classes, videos, audio training files, classroom training programs, etc . . and the ability to have people complete regulatory testing on, you guessed it, home office servers. To-do list, home office server. Calendar and schedule, home office server. Contact list, home office server. If I need regulatory documents, regulatory manuals, etc. . . home office servers. The list could go on and on and on. You would not believe everything that is on those servers and available at the touch of a button on my computer or smart phone and this summer, on any tablet that can surf the web.

As tech expands so will many private clouds that already exist. They may not yet be called private clouds, but that is what they are . . .or what they will morph into.
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I am so sick of the word "cloud". I wish people would start calling it what it really is.
Because two people made some negative references (and I think they're correct), you easily and biasedly switched boats using two sources. I've no use for putting any useful data at risk that way. Plaeces like Netflix, if that's what they want, fine; it's never an all or nothing situation but ... the likes of Netflix similaritiies has never made it to the discussion point before.
Too much bias switching here for my liking.
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RE: Private cloud discredited, part 2
rparker@... 15th Apr 2011
Please share the Private cloud design you are comparing against? I doubt you have one. Thought leader? Just quoting the work of others sounds like a follower to me.
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RE: Private cloud discredited, part 2
james347 16th Apr 2011
I'll wait for part 3.
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RE: Private cloud discredited, part 2
mhug@... 17th Apr 2011
It's funny to see the level of agressivity such an article can generate. IT is definitly much more a religious matter, with zealots and anathems, than calm engineering... at least that's how it looks like :-)))

My issue with the "private vs. public cloud" debate is about the world "public". Data stored in a so called "public" clouds are just as "private" and "privately" held as in any technical environment: nothing is "public" on your account... if you handle technical environments correctly I mean. Unless you consider your banking account is "public": anyone can open an account in your bank, just as anyone can open an account on AWS for instance.

In fact the debate really is: should we continue owning and managing IT as usual, or should we use IT solutions "as a service"? Because "private cloud" is really about not changing anything fundamental... I mean virtualization isn't new, is it? The debate is not about going "cloud" internally or externally: it's whether going cloud or not. It's not because you use similar technical stacks that you get similar solutions nor similar governance impacts. Similar tools used by different people in different environments never produced the same products.

So the question is not public vs. private, it's about asserting if IT solutions are delivered today to your business users at the required pace. Does IT cover all needs or does it have a huge backlog due to several out-of-track projects?

If business users' satisfaction towards IT is high in your company, why bother? Nobody else but you knows what you need.

On the other hand, if business users' satisfaction is low, thinking about changing IT's delivery habits sounds like a very reasonable thing to do, doesn't it? There are many sizes in "public" cloud offers, fitting various needs. And, yes, as with old on premise IT, it's still possible to screw up with them: US gov data on a "public" cloud still leak to wikileaks happy

Yet, the sad truth is that if business users in your company are satisfied and completely served, then your company is an exception.
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More relevant info from comments
SAASISV 18th Apr 2011
I get more relevant information from the comments regarding the topic than the article itself. The author very rarely produces quality articles. Time to remove this blog from the RSS list!
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Private public hybrid
dannymjohnson 20th Apr 2011
I like the NetDocuments model of a public/private cloud hybrid.
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Truly bizarre arguement
Pijin 5th Jun
With increased virtualization & both public & private cloud deployment, implementations of private cloud are becoming easier and faster. This is like saying PC's didn't make sense back in the early 80's. Increased utilization means more innovation = more tools = faster & easier rollout & better security. Interoperability between these clouds is key. The concept behind Boomi's technology to make apps interact I see as just the beginning of making whole system interact more intelligently & effectively.

As for being a baby-step to using more publicly offered cloud products, sure maybe it is. But it seems to me a hybrid of both of these makes complete sense. Part of this may be driven by a company's need to begin to get their mind around cloud use in general. Servers and their applications (not just data) drifting around cyberspace is a big step for many. buying something they don't really yet understand and putting their lifeblood in the hands of a 3rd party makes many CIO's nervous. I'd argue that without solid understanding it's very easy to pick the WRONG provider, and that could be much worse than the cost of setting up their own private cloud.
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What about outside the USA?
alec.wood@... 8th Aug
Subjugation to US law regardless of nationality, and the likelihood of nefarious practice by outside influences (as seen when PayPal et al dropped Wikileaks) on US companies is coming to make the cloud seem like a non-starter for non-US based companies.

The cloud is a good thing only for the cloud providers because, if wholly adopted, they will essentially own the internet, and these are corporations, not benevolent uncles
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