That’s not the kind of activity you would want anyone snooping on, so security will have to be strong. Data protection will have to meet EU requirements too. It’s good to see the UK government putting its trust in a cloud platform to meet these compliance needs (although to be honest, the performance bar has been set pretty low considering its history with losing citizen data even in the offline world).

The platform underlying gov.uk is full of cloud goodness. The EC2-hosted instances run Ubuntu Linux and the infrastructure automation is coded using Puppet. The code itself, although written in-house, has been released as open source and can be downloaded from GitHub. It’s mostly in Ruby, with MongoDB and MySQL providing the database components. Files are hosted on S3, email messaging runs on Amazon SES and Gmail, the DNS is hosted by Dyn.com. Even the website fonts are sourced from online service Fonts.com.

The messaging around this beta launch of the service suggests the UK government actually ‘gets’ the cloud. Francis Maude, government minister for the Cabinet Office, said in a statement that “IT needs to be commissioned or rented, rather than procured in huge, expensive contracts of long duration.” He’s also said that, “It’s not about cutting 10 or 20% from the cost but how to do it for 10 or 20% of the total cost.” With the UK’s record of delivering public sector IT projects that underperform for 10 to 20 times the original estimates, that’s quite a breathtaking target, but fully in line with what ought to be possible with cloud.

Sometimes, conditions in an individual data center mean that computing loads have to be moved out of that location to other data centers, either partially or completely. The Wired article (with a little help from The Register) confirms that Google uses a software utility it has devised called Spanner to do that automatically. In Google’s own words (as The Register originally reported), Spanner is a “storage and computation system that spans all our data centers [and that] automatically moves and adds replicas of data and computation based on constraints and usage patterns.” The automation is capable of initiating a virtual evacuation of a data center in seconds, without human intervention. Now that’s what I call a cloud.

When running a cloud at that kind of scale, you start looking very closely at the huge sums you’re spending on power and cooling. The Finland data center takes a creative approach to reducing its power bills (at the same time as improving its green credentials) by using naturally chilled seawater for heat exchange rather than the usual electrically powered air conditioning units. That takes out an important slug of energy costs that help make the operating costs of Google’s cloud even more economical than less highly scaled competitors, reinforcing its competitive advantage as a public cloud provider.

Of course it’s also true that what looks like a public cloud to the outside world is just as much a private cloud from Google’s perspective as any enterprise IT infrastructure — especially one that is accessed from the public Internet by customers, partners and employees. Therefore, if you really want to know how to build a private cloud, you should take a serious look at what Google is doing. Although it’s more secretive about the inner workings of its cloud than most, any rare glimpses of how it operates provide a useful insight into cloud best practice. Not everyone’s cloud will span the planet, but no cloud can be a competitive proposition unless it’s got the potential to scale massively.

Meanwhile, it’s the business case that provides the compelling argument for going cloud. Yesterday, I heard two fascinating accounts from opposite ends of the enterprise spectrum about the transformative effect of cloud in their businesses. Both were speakers at Cloud Expo Europe in London, providing more grist for the mill of my forthcoming book about the emergence of frictionless enterprise. I was attending as a speaker on behalf of cloud platform distributor Boston [see disclosure].

Banking multinational HSBC was at one end of the spectrum, demonstrating that transformation isn’t just for small, green-field enterprises. It was a delight to hear the enthusiasm and confidence of Barry Childe, head of research, innovation and delivery for the bank’s global banking and markets division. His presentation talked about how cloud allows an organisation to reduce complexity, dramatically lower costs, and provide the best IT solutions to its business units — not just in theory but based on the bank’s proven experience. “This is not vapourware, this is about delivery of end solutions,” he insisted.

While he’s not allowed to publicly cite metrics, Childe did say that the bank’s cloud projects had more than lived up to expectations, stating: “I would consider our performance as exceptional.” I wondered whether those cloud-powered IT solutions were simply a matter of helping the bank do better what it had always done, or were some of them going beyond the bank’s traditional activities? His reply to my question was emphatic: “We’re doing things we could never have dreamed about a few years ago.”

At the opposite end of the scale, startup CEO Geoff Newman described how the cloud has helped his company grow from an investment of less than £10k to become a multi-million-pound business in just two years. Recruitment Genius is what I would call a classic frictionless enterprise story, finding its niche by using the cloud to take friction out of the recruitment process — its service posts a company’s job ads to a tailored selection of online job boards, filters the responses and provides an online applicant tracking system where recruiters can sort the CVs and arrange interviews.

Behind the scenes, its use of the cloud to drive its infrastructure is equally game-changing. All staff work virtually, using Gmail, Basecamp, Dropbox and Voipfone to collaborate. The company stores its applicant CVs on AWS, saves its Java code libraries on Google Code and runs its SQL database on Azure, with all files backed up to JungleDisk. It hosts its other servers on UK cloud hoster ElasticHosts, its videos on Vimeo and achieves a distinctive web presence with online fonts from Monotype Imaging’s fonts.com. Even the programmers that develop the company’s online functionality are hired on-demand using the cloud and are paid by the hour. “We’re able to scale our workforce and our cloud computing as necessary,” said Newman.

With its lean infrastructure and operating costs, and its direct connection into online job boards and social media, Recruitment Genius is hollowing out the business model of traditional recruitment agencies — as the company says on its website, “In 2009 we realised we had smashed our own recruitment agency model, but in its place was something far more exciting and effective.”

There’s a warning there for everyone that attempts to dismiss the cloud as a fad or as just another means of delivering IT. Those who really seize its potential are creating entirely new business opportunities — not only start-ups like Recruitment Genius but also big established firms like HSBC. And those initiatives are stealing business away from others that are slower to react to what’s going on. As the cloud matures, resistance isn’t merely futile; ignore the cloud and you could find your business has bought a one-way ticket to the scrapheap.

“Traditional collaboration was very inward-looking,” CEO Alastair Mitchell told me when we met last week in Huddle’s offices overlooking London’s ‘Silicon Roundabout‘ (see pic). “Jive, Yammer, are very much of that paradigm,” he went on. “What’s driving our growth at the moment is that organizations are demanding collaboration that goes beyond the firewall — that allows the whole ecosystem to operate.”

Huddle says the 93% of its customers that use its platform to connect beyond the enterprise firewall work with an average of 25 other companies (sounds like a great demonstration of frictionless enterprise in action). The new Unlimited Enterprise edition supports collaboration across that entire business ecosystem, with the ability to freely add ‘lite’ users who can view or download content, or contribute to document comments, task whiteboards and discussions.

Unlike its more consumer-focused competitors such as Box and Dropbox (though Box in particular has recently sought to target larger enterprise accounts), Huddle already has a heavy focus on the enterprise market — implementations typically start at a hundred users and many run into thousands of seats, Mitchell told me. Its ‘True Uptime’ guarantee should enhance its appeal to that market. Whereas all cloud uptime guarantees cover unexpected failures, most explicitly exclude ‘planned’ uptime, when systems are taken down to make infrastructure improvements or upgrade to a new release. In contrast, Huddle is including these events within its meagre 0.5% downtime allowance. It is bolstering the guarantee with a money-back promise if it fails to live up to 99.5% uptime. The company is confident it can meet this tough standard, for example achieving in excess of four nines — 99.995 percent — over the past 90 days.

One of the most potent demonstrations of Huddle’s appeal to an enterprise market is in its penetration of government accounts, which make up a quarter of Huddle’s business globally. Government is a natural candidate for collaboration outside the firewall, says Mitchell: “It’s all about content. It’s extremely collaborative. It’s totally interconnected … To be able to plonk a secure extranet in front of everyone is ideal.”

Although Huddle is a firm proponent of the multi-tenant cloud model, it does offer a dedicated version of its service that runs over the private internet networks that many governments run independently of the public Internet. A first implementation for the UK government, introduced last year, “has gone absolutely crazy,” says Mitchell. Now the company is seeing demand for the same solution from the US, Australia and many European governments. “It’s delivering networked collaboration on content, in a secure environment,” explains Mitchell. But he’s careful to emphasize that this is “not a branched version of Huddle,” which would break “a fundamental tenet of multi-tenancy.”

For Huddle, multi-tenancy is not just an architectural choice, it’s part of its raison-d’étre. “The next coming of the collaboration sector really has been enabled by cloud,” Mitchell asserts. “Facebook is the prime example of that, using cloud in its purest multi-tenant form. Facebook could only have happened not just because of the Internet but also because of that ability to connect to one central, multi-tenant service.”

The other component of Huddle’s strategy is its attractiveness as a replacement for a very conventional enterprise collaboration platform. “We’re benefiting from companies moving to the cloud and taking big and clunky kit such as [Microsoft's collaboration platform] Sharepoint off their servers,” says Mitchell. “Sharepoint is near the top of most people’s hitlist — it’s so unpopular.” Huddle offers easier mobile access, simpler connection to external users and faster speed of deployment among other factors, all for a lower cost than enterprises currently spend to maintain their existing Sharepoint instances.

Although Huddle is not as generously funded or as lauded by the Silicon Valley echo chamber as some of its competitors, it has the ambition to punch above its weight and an advantage in terms of its proven enterprise credentials that it aims to leverage to maximum effect. As a Brit, perhaps I’m biased, but I think this Silicon Roundabout prodigy is one to watch.

While pondering this conundrum, I recently found some insightful perspectives in a blog post by Randy Bias. Despite our previous disagreements over the future of private cloud, I felt that in Cloud Computing Came to a Head in 2011, he has put his finger on a crucial distinction: there are two types of cloud out in the world. Or, as I’ve put it in the title of this post, the cloud is forked.

How has this happened? It’s because people take a while to digest the full extent of what it means to go cloud. Bias’ post is very helpful in this respect, because he describes the various phases his own thinking has gone through over the past few years, seeing cloud first as being all about IT automation, then as virtual machines in virtual data centers, and then finally — and most radically — as “a new kind of IT.”

That final leap is where the fork has opened up. As Bias observed, “I could see that most everyone involved in the cloud computing space was spending time trying to retrofit the notion of ‘cloud computing’ to their existing business models and technology.” This type of behavior is, frankly, a frequent phenomenon with emerging technologies. I think of it as ‘horseless carriage syndrome‘ — the propensity to interpret a new technology using familiar concepts from the existing world, rather than seeing it in its full, native potential. In the SaaS world, it leads to what I long ago called SoSaaS — Same old Software, as a Service.

In the cloud environment, the ‘retrofitting’ that Bias alludes to results in private cloud projects whose main focus is on lowering operating costs and perhaps integrating better to some public cloud resources, but otherwise carrying on much as before. In the past, I’ve warned against this approach, and Bias notes that many such projects end up not only unable to deliver the benefits of cloud computing, they don’t even achieve a proper return on investment. Nevertheless, this is the type of cloud strategy that many of the established enterprise vendors and systems integrators will recommend. It’s very commonly adopted by organisations that find it more palatable than the disruptive move to ‘web-scale cloud’ that Bias argues is preferable because of the “business agility and top-line revenue growth” it enables. But he concedes that this form of cloud is poorly understood by all but a few practitioners.

So, as Bias concludes, we have ended up with two ways to implement cloud in the enterprise: “clouds built using existing ‘enterprise computing’ techniques and those using emergent ‘cloud computing’ technologies and thinking.” The cloud is forked, and while one path, though well-trodden, seems fundamentally flawed, the other remains a more challenging work-in-progress. A fork, then, that embodies the horns of a dilemma for enterprise decision makers. The path with less risk offers negative rewards, while the path with most potential rewards embodies far more risk.

See also:

• Every private cloud has a public face
• Three little clouds and the big bad world
• Every SaaS provider runs a private cloud

Such in-depth and professional journalistic research is so rare in today’s instant-gratification world of Techmeme-fueled technology reporting that Business Insider found it hard to grok exactly what was happening: “In a weird twist of events, the hole was actually found by Infoworld, a news site that covers the tech industry …”

Wow, a news site actually researching its own stories — how weird is that? Apparently that is such an old-fashioned concept that today’s tech bloggers find it outlandish, so inured they are to their role as echo chambers for other people’s press releases, product launches and rumor mills. But then of course, as we all know, enterprise software is utterly boring and today’s media has far more entertaining matters to concern itself with. Who cares that a multi-billion dollar software company has been covering up a product flaw that could bring mission-critical processes at major corporations to a sudden, shuddering halt?

Of course this is in fact a hugely significant story and although the majority of tech coverage today is simply asleep at the switch when it comes to the really important topics, fortunately the team at InfoWorld had the courage and the patience to invest in ferreting out the truth of this story.

It’s extraordinary to look back at the predictions I made at the turn of the year to see just how far we’ve come. With hindsight, it seems self-evident that mobile and social would become core to enterprise software strategies, and yet a year ago, it was still a novelty to suggest either. The need to serve itinerant clients and tap into social information and activity streams has only served to reinforce the need for highly connected, cloud-centric computing stacks that are transforming the nature of enterprise software. It’s all part of what I’m now calling the move from fixed to frictionless enterprise — the cloud in its widest sense is becoming a platform for the evolution of new, highly interactive, hyper-connected business models.

Many enterprises struggle with this new need to operate in a connected world, and so it’s no surprise there have been many instances of cloud failure during the year. I predicted that many of these failures would be down to enterprises implementing the cloud badly, and there have certainly been few better illustrations of how not to run a cloud service than the example set by Sony. What has become obvious in the course of the year is that every enterprise has to be a public cloud provider in its dealings with customers, partners and employees (and indeed that Every SaaS provider runs a private cloud). If an enterprise is not prepared to rely on third-party infrastructure, then it has to invest in the skills and resources to do it well for itself.

There was a time when people used the term private cloud to describe IT infrastructure that follows cloud principles but is isolated from connections to the public Web. I believe that idea has been thoroughly discredited by now. As we learned earlier this year when it became known that RSA’s security keys were thought to have been compromised, the security of what’s inside your firewall is dependent on what goes on inside other people’s firewalls. We are all interdependent, and it’s not an option to cut yourself off entirely, because how then are you going to do business? The world is connected and burrowing through those connections comes software, as Marc Andreessen succinctly puts it, eating the world. If you’re not connected, you’re history.

As we move forward into 2012, that recognition of the pervasive nature of cloud technologies will engender a more mature attitude to cloud in the enterprise, one that aims to harness and manage both private and public cloud resources within a hybrid environment that leverages the best strengths of both. Cloud is no longer something ethereal and remote, but instead it touches and envelops every existing IT asset. Cloud has landed and must interact effectively with what’s on the ground — and vice-versa.

Which brings me to the one unfulfilled prediction I made last year, that ‘IT management gets wired to the cloud’. If enterprises are to adopt cloud successfully, then having reliable tools for cloud governance is essential.

Here are my ten must-read posts from the year:

• From fixed to frictionless enterprise
• Three little clouds and the big bad world
• SaaS will dominate your cloud strategy
• Time to think about cloud governance
• Enterprise software pivots to new stacks
• Every SaaS provider runs a private cloud
• Every private cloud has a public face
• Making the public cloud your own
• Why DevOps matters to business
• Seven lessons to learn from Amazon’s outage

Another vital occupation has been keeping the world turning for the rest of us today: the technologists who monitor and safeguard what’s happening in the data centers that handle all of the download purchases everyone has been making. When I was a child, there was no way to spend the book vouchers or record tokens that arrived with Christmas cards from far-flung family until the shops opened after the holidays. Today, the vouchers are electronic and the recipient can fulfil their purchase instantly via iTunes, Amazon or a hundred other online stores.

One of this season’s hottest toys, the LeapPad tablet from educational toy maker LeapFrog, will prompt thousands of game downloads from LeapFrog’s own download store, whose billing systems are operated by SaaS billing provider Vindicia. Despite huge sales of the tablet itself over the past two to three months, downloads had remained low until around ten days ago, when parents started prepping the device before wrapping it up for the big day. The biggest spike in volume will have been today, starting from around 6am, when children eagerly opened their gifts and selected the games they want to put on the tablet.

Vindicia’s CEO SVP marketing, Sanjay Sarathy, will have been sneaking occasional looks at his company dashboard to reassure himself that its customers’ systems are running smoothly [his job title has been corrected from an earlier version of this post. Vindicia's CEO is Gene Hoffman]. For them as for many others in the online industries, being online this holiday isn’t just for playing games or reading electronic editions of books and magazines. It’s also a time when the digital wheels of industry and commerce keep on turning. Many games developers, authors, publishers and online providers will go to bed better off tonight than they were when they rose this morning, without having had to lift a finger (beyond tapping a few keys to check their online revenue tally). An army of electronic servers and switches will have performed their work today, while the masters of these digital helpers have had the choice of spending the holiday at home with their families. Only if something goes wrong will they have to rouse themselves into action to get things working again as rapidly as possible.

Those silent, ethereal, digital laborers in the data centers, performing their work for no fee except the electricity and cooling needed to keep them running, are the closest we have to fulfilling that 1960s dream of a life of leisure powered by machines. But once the holidays are over, we all have to go back to work, because the there’s only so much leisure to go round. We still haven’t automated away the need to go to work to pay for our leisure-time downloads.

In these conversations, there’s never any consideration that sovereignty is often stronger if it’s pooled among 27 nations rather than defended alone; in the same way that security in the cloud is hardened when hundreds or thousands of customers share the cost of building and running it.

On the other hand, sharing your IT infrastructure — or your economic and political sovereignty — becomes a complex endeavor if you try to do it on any significant scale. While the economic advantages of pooling resources or sovereignty may seem self-evident, it’s important to fully understand and safeguard against the risks of multiple interdependencies. Europe has got into the mess it’s in now because the pact underpinning the single currency didn’t have what we in the cloud industry would call a strong enough SLA to bind the various participants. In fact, the penalties for breaking the rules were so weak that pretty much everyone ignored them. As a result, what looked like a great deal at the time has turned out disastrously now that the full extent of the risks has become woefully clear.

Success in the cloud, just as much as among the countries of the European Union, depends on fully acknowledging the concerns and risk exposures of all participants. Dogmatic insistence on preserving the ‘purity’ of one point of view or another is all very well in the early days of establishing a new and unfamiliar concept, but once it has proven itself, there is scope for accommodation and flexibility. In the case of the EU, I’m not sure that the politicians are going to be able to bury their differences, but in the cloud there are reassuring signs of reconciliation.

Two news stories in the UK this week hint at a mellowing of differences. First, there was a strikingly odd statement issued by Salesforce.com on Tuesday, welcoming the UK government’s newly published Cloud Strategy document. Odd, because back in September, the company’s CEO Marc Benioff had slated the UK’s G-Cloud project as “a big virtual machine that has not been executed well,” and called on the government to “stop hiding behind the private cloud.” This week’s statement glossed over the private cloud components that still form part of the strategy, and instead focused on congratulating the government on “embracing multi-tenant public cloud services” along with G-Cloud’s App Store-like procurement framework.

No doubt this olive branch is partly motivated by wanting to curry favor with public sector buyers, who will find Salesforce.com among G-Cloud’s approved list. But it’s also a diplomatic gambit, designed to show a willingness to praise the positive rather than emphasizing differences. As Salesforce.com increasingly seeks to build its enterprise footprint, it has to speak in terms that demonstrate it understands the issues its potential customers face as they adopt the cloud.

The second news item came from UK cloud collaboration company Huddle, announcing a tie-up with VMWare to integrate with the vendor’s Zimbra mail platform. Huddle is a pureplay cloud provider but already operates a separate instance on the UK government’s highly secure private cloud for restricted data. Huddle’s strategy firmly targets the business and enterprise market and, like its larger and better-known US rival Box.net, it is working hard to meet enterprise demands. Increasingly, that means engaging with hybrid environments that straddle private and public cloud infrastructure. There was a time when cloud pureplays would have asserted the enterprise should simply move everything to the cloud. Today, their approach is more pragmatic.

While some in the cloud world may view these steps as foolish concessions, others will see them as necessary accommodations to help enterprises navigate their way towards making better use of the cloud. Of course, there’s always a danger of giving up too much ground and ending up with a solution so compromised that it pleases no one. Understanding where to draw the line is crucial, and making sure each side realizes why those lines exist is the key to findig a lasting settlement.

I’ve been mulling all this deeply mainly because I was in Paris on Monday for the finals of this year’s EuroCloud Awards [disclosure: I'm a vice-president of EuroCloud]. There were winners from Sweden (twice), France and Luxembourg, demonstrating a wide range of cloud activity across the continent. Cloud in Europe is set to get a useful boost from plans to harmonize data protection laws across the EU, making it easier to offer cloud services cross-border. This is a good illustration of how pooling sovereignty benefits both individual citizens and businesses. Let’s hope misplaced national interests don’t scupper the initiative.

Saaspoint was founded in 2005 by the founders of salesforce.com’s European operations and has its corporate administration in rural offices near Dublin, Ireland, with headquarters in London. It is regarded as one of Europe’s leading Salesforce.com integrators (see previous coverage), although its activities are mainly limited to Ireland and the UK, where customers include well-known names such as British Gas, CitiLink and Rentokil. Its 30 permanent staff will join Appirio. CEO John Appleby will step down to an advisory role and the remaining team will report to Lori Williams, who became general manager EMEA in September after a year heading up Appirio’s US consulting teams.

SaaSpoint has been growing at a 20 percent quarter-on-quarter rate, Williams told me yesterday, and Appirio plans to accelerate that by tapping the existing pipeline along with its own prospects with existing Appirio customers and new business enquiries. Appirio also plans further acquisitions, she said, as it expands into markets such as Benelux, the Nordics and Germany.

Although late to Europe in comparison to rivals such as Bluewolf and Astadia, chief strategy officer Narinder Singh told me Appirio has picked a good time to make its entry. With economic turmoil threatening Europe, large conventional implementations are likely to be shelved, he said, opening opportunities for cloud alternatives. “We think there’s a lot of great firms in Europe we can plug into,” he said. “Now that people are running from Europe. We believe this is a time of opportunity.” Appirio has over 400 staff worldwide, mostly in the US but with teams in Japan and India too.

Appirio will have to compete with a lively local SI industry in Europe, including pureplay cloud integrators and larger incumbents such as Cap Gemini and Atos, which recently captured headlines with its CEO’s plan to abandon email internally. Williams said that Appirio’s global scope and cloud focus will give it an edge against such rivals.

“You’ve got the regional cloud SIs and then you’ve got a big gap between them and the traditional legacy SIs. They don’t necessarily have cloud experience — that’s not their focus,” explained Williams. “It’s a hard call for some of these larger customers to go to a regional provider that may only have 10 or 15 people. Our sweet spot is being able to deliver on a global level but be a pureplay cloud SI.”

Saaspoint, which has focused mainly on Salesforce.com’s core Force.com platform and Ruby development on Heroku, will have to come up to speed with Appirio’s additional areas of expertise in Workday and Google. It will also have to align with Appirio’s aggressive cloud evangelism, whose latest incarnation is the upcoming ‘Washies‘ awards, which calls out egregious examples of ‘cloudwashing’, in which vendors put the cloud computing label on traditional IT products and services. Voting in the Washies closes Dec 12. [Disclosure: Appirio is a past client.]