The very definition of cloud computing remains controversial. Consulting firm Accenture has crafted a useful, concise definition — the dynamic provisioning of IT capabilities (hardware, software, or services) from third parties over a network.

Cloud computing is a computing model, not a technology. In this model of computing, all the servers, networks, applications, and other elements related to datacenters are made available to IT and end users via the Internet, in a way that allows IT to buy only the type and amount of computing services that they need. The cloud model differs from traditional outsourcers in that customers don’t hand over their own IT resources to be managed. Instead they plug into the ‘cloud’ for infrastructure services, platform (operating system) services, or software services (such as SaaS apps), treating the ‘cloud’ much as they would an internal datacenter or computer providing the same functions.

What is cloud computing?

Despite comments among industry insiders and imprecise metaphors meant to explain virtualization and cloud computing to the masses, it is patently untrue that the corporate computing world is returning to the mainframe model of computing.

Today’s hardware, software and networks are cheaper, more flexible and more easily accept anything a user or datacenter manager wants to do, for one thing. Rather than making users wait days or weeks for any changes or reports, typical datacenters can easily add extra storage or computing power to accommodate an online-sales promotion, for example.

On the other hand, constrictive budgets, a bad economy, and computing hardware, that has largely outstripped the demands business applications put on it, have increased the pressure on CIOs to not only show they’re using IT dollars efficiently, but also actually do it.

Virtualization — as well as the cloud computing model within which it often runs — answer much of that need, by giving CIOs the ability to cover a week-long spike in demand by turning up the spigot on the computing power a business unit gets. A layer of virtualization software allows a bank of servers to share the available workload, and lets the CIO give a business unit 10 percent more storage capacity or compute power, rather than having to go buy completely new servers that add 10 times the required capacity.

The mainframe-like miracle is abstraction — the ability to hide the complexities of a system from the end user while providing all the power and capabilities the user requires.

The web is the largest abstraction layer in IT — hiding the complexity of a global network with hundreds of thousands of specialized servers and arcane data behind search engines and hotlinks.
In IT, ‘virtualization’ most often means server virtualization — in which one physical server acts as host to several virtual servers, each of which runs on a layer of software called a hypervisor whose job it is to parcel out storage, memory, and other computing resources while making each virtual server believe it is running by itself on a standalone computer.

Cloud computing takes that abstraction one further step. Rather than making one server appear to be several, it makes an entire datacenter’s worth of servers, networking devices, systems management, security, storage and other infrastructure, look like a single computer, or even a single screen.

The idea is to let companies buy exactly the amount of storage, computing power, security and other IT functions that they need from specialists in datacenter computing — in the same way they used to pay a telecom company to come install the number of phones they required.

Types of cloud

Web-based e-mail services from Google and Yahoo, backup services from Carbonite or MozyHome, customer-resource management applications like Salesforce.com, instant messaging and voice-over-IP services from AOL, Google, Skype, Vonage and others are all cloud-computing services, hidden behind yet another layer of abstraction to make them seem even simpler to end users who want the kind of power sophisticated computing can give them, but don’t want to know how it’s done.

There are three basic types of cloud computing:
Infrastructure as a Service: This provides grids or clusters or virtualized servers, networks, storage and systems software designed to augment or replace the functions of an entire datacenter. The highest-profile example is Amazon’s Elastic Compute Cloud (EC2) and Simple Storage Service, but IBM and other traditional IT vendors are also offering services, as is telecom-and-more provider Verizon Business.

Platform as a Service: Provides virtualized servers on which users can run existing applications or develop new ones without having to worry about maintaining the operating systems, server hardware, load balancing or computing capacity. Highest-profile examples include Microsoft’s Azure and Salesforce’s Force.com.

Software as a Service: The most widely known and widely used form of cloud computing, SaaS provides all the functions of a sophisticated traditional application, but through a Web browser, not a locally-installed application. SaaS eliminates worries about application servers, storage, application development and related, common concerns of IT. Highest-profile examples are Salesforce.com, Google’s Gmail and Apps, instant messaging from AOL, Yahoo and Google, and VoIP from Vonage and Skype.

Why cloud computing?

According to critics, there are nearly as many reasons not to want cloud computing as there are reasons to use it.

The arguments for cloud computing are simple — get sophisticated datacenter services on demand, in only the amount you need and can pay for, at service levels you set with the vendor, with capabilities you can add or subtract at will.

However, if someone else owns the computer infrastructure you rely on, you don’t have the kind of control over your data and the performance of your applications that you may need, not to mention the ability to audit or change the processes and policies under which even authorized users must work. A slew of software vendors are rushing into the market to fill this gap with management tools, but that set of products remains quite young.

According to Chris Wolf, Virtualization and Infrastructure Analyst at The Burton Group, “When you’re talking about virtualization, at least there’s some commonality in the platform, the hypervisor you’re using, if not in the hardware behind it,” Wolf says. “Cloud is not a one-size-fits-all solution. You have various flavors of SaaS, Amazon’s EC2 and other infrastructure services that are all different in how they treat data at rest (in storage) and in motion (when it’s being used in applications or communications). That’s a big problem.”

Cloud customers risk losing data by having it locked into proprietary formats, may lose control over data because tools to see who’s using it or who can view it as it moves across the network are inadequate, or may lose confidence in it because they don’t know when data has been compromised or how, Wolf says.

The Drawbacks

Clouds pose more than just legal problems; there are technical ones, too, according to Bob Laliberte, Analyst at Enterprise Strategy Group.

“We say about virtualization that it’s hard to manage an environment where your applications are playing hide and seek and your hardware is lying to you,” Laliberte says. “It’s even more with clouds. You’re having to try to manage someone else’s hardware that’s lying to you.”

There is no ‘single cloud’ involved in cloud computing, Laliberte says. All the SaaS and infrastructure-services providers use different technology and different standards, meaning every vendor relationship will be different. You can’t just tool up one application or business process for ‘the cloud’ and be ready to go.

You also can’t just move applications to the cloud and expect them to run, even with the best virtualization technology, according to James Staten, Datacenter Analyst for Forrester Research.
“To move any significant corporate processing into a cloud environment requires at least the same amount of work IT would have to do to move the same workload from its existing servers to new virtual or physical servers, including reconfiguring connections to network and storage resources,” Wolf says.

Keeping track of what happens after the workloads move often means using a completely different set of management applications that integrate imperfectly, if at all, with a company’s existing management applications, Laliberte says. IBM, HP, BMC and other datacenter systems-management vendors are adding cloud-management functions as quickly as possible in order to try to appeal to customers who have never dealt with them before, Laliberte says.

“A lot of CIOs are interested in internal clouds, but they’re leery of the performance issues and security inherent in the cloud environment,” he says.

VMware is also leaping into clouds, basing much of its technology strategy on the idea that companies should be able to virtualize all their IT assets into ‘internal clouds’ that will interoperate seamlessly with external clouds also based on VMware virtualization software.

Both that capability and customers’ willingness to go along with it are still in question, Wolf and Laliberte agree.
The best use of clouds would be to be able to move specific workloads from internal servers to a cloud provider when you expect a spike in demand, take advantage of the cloud provider’s additional capacity, move it back when the rush is over and pay only for the resources you used, Staten says.
“However, we’re a long way from being able to do that,” Staten says. CIOs on the leading edge of cloud adoption say using an external cloud can make sense, but that metrics and strict controls are even more important in a cloud environment than in a normal internal IT environment, specifically because there are so few controls inherent in cloud-computing relationships. Though the intent of cloud computing is simple, the impact and mechanisms for delivery are often far more complex. “There’s a lot more to it than people often
admit,” Staten says.

SaaS, SMBs Lead the Way

There has been so much talk about cloud computing in India that one might feel it’s the latest vogue among enterprises in India. However, if we take a closer look at the actual adoption level of cloud, one can not miss the fact that this new concept is has not really picked up in our country. Diptarup Chakraborti, Principal Research Analyst, Gartner, says, “A number of Indian enterprises have started moving their applications on to private clouds. However, I would say the potential of cloud has not been explored completely by Indian companies.”

There have been very less takers for Infrastructure as a Service as well as Platform as a Service, though SaaS would have a slightly different story to tell. A latest report from Springboard Research comes up with an interesting observation that SaaS applications have in fact begun to eat up the on-premise applications market across APEJ (Asia Pacific excluding Japan). More than 50 percent of SaaS adopters had evaluated an on-premise application before ultimately choosing a SaaS solution, the report says.

The research agency also predicts that though the market is expected to grow at 46 percent between 2008 and 2012, the growth rate ‘will naturally flatten somewhat as the market matures’.
According Chakraborti, enterprises are still reluctant to go for public clouds because of concerns related to security, availability, and manageability. “Indian organizations are not willing to move critical business applications on to public could because they feel productivity will get affected.”
However, industry analysts predict that cloud is going to pick up momentum in India, driven mainly by the needs to increase business agility and scalability. The shift towards green would also be a reason for enterprises to opt for cloud, says Chakraborti.

The western markets are a little ahead of India, as these countries are at least experimenting with the various forms of cloud. Interestingly, Indian SMBs are turning out to be more agile towards cloud and are likely to ride this new wave in the days to come. Chakraborti says that the cloud providers have realized that SMBs are ‘low hanging fruits’ and are accordingly building strategies to tap this market. “Enterprises are caught in legacy systems and are not moved easily by new concepts,” he adds, though there are conflicting observations to this.

- Radhika Nallayam

Flavors in Pricing and Specs

Depending on what you’re looking for, there is a variety of providers, even of basic application or infrastructure services, but their prices and specific offerings vary. There’s often disagreement over how to even calculate cloud-computing costs.

Amazon’s Elastic Compute Cloud (EC2), the best-known infrastructure service, prices its services per terabyte per month, decreasing the cost slightly as volume increases. Customers pick their own services, including OS, security levels, access controls and APIs, and pay by volume of usage.
On the other hand, Google’s Gmail is free for personal use and starts at about $50 per mailbox for corporate implementations with private domain names. Google’s App Engine lets customers build virtual Java or Python web applications on Google servers, and pay by the gigabyte when their capacity goes beyond the 500MB of free data and resources to serve five million page views per month.

The lesser-known Skytap provides a platform on which customers can run virtual machines and applications without building the virtual infrastructure themselves. Subscriptions start at $500 per month and increase with storage and data-transfer volumes.

VMware has moved into cloud technologies in a big way, for example, with vSphere 4. While some vendors, such as Google, disagree with VMware’s emphasis on private clouds, VMware has recently enlisted powerful partners in its bid to help customers use a mix of private cloud and public cloud technologies.

The hypervisor built into Windows Server 2008 competes directly with VMware’s virtualization software, but Azure is Microsoft’s real entry into the cloud. Still in beta, Azure provides database and platform services starting at $0.12 per hour for compute infrastructure; $0.15 per gigabyte for storage; and $0.10 per 10,000 transactions for servers. For SQL Azure, a cloud database, Microsoft is charging $9.99 for a web edition, which comprises up to a 1 gigabyte relational database; and $99.99 for a business edition, which holds up to a 10 gigabyte relational database. For .NET Services — a set of web-based developer tools for building cloud-based applications — Microsoft is charging $0.15 per 100,000 message operations, including service bus messages and access control tokens.

The Good, The Bad, And The Risky

PROS:
Quick Deployment: Add capacity or applications almost at a moment’s notice
Metered Cost: Pay-as-you-go approach for storage, processing, and applications means more efficient use of IT spending

Little or no Capital Investment: Costs don’t stay on the books for years

Little or no Maintenance Cost: Maintenance is all from a workstation or configuration screen. You never have to go touch a physical server

Lower Costs: Many customers use the same infrastructure, so the vendor is able to buy in bulk and amortize costs over more customers, potentially lowering per-unit cost to each customer
cons

Little or no Capital Investment: Services don’t depreciate over years as capital expenses do, so there could be a tax disadvantage over time

Monitoring and Maintenance Tools are not Mature: Visibility into the cloud is limited, despite recent announcements by firms that they’re modifying their datacenter management applications to provide better control over data in the cloud

Immature Standards: Groups such as the Distributed Management Task Force, the Cloud Security Alliance, and the Open Cloud Consortium are developing standards for interoperability, migration, security, and other functions, but standards at the levels corporate IT requires are still a couple of years away.

RISKS:
Data Mobility: Most SaaS or cloud vendors have some ability for customers to download and store data, but users often can’t get the data out of it in a way that’s usable in a different vendor’s software

Privacy: Most cloud contracts include clauses that promise data security and privacy. But a customer’s ability to know who’s looking at what data is limited

Service Levels: The ability to customize features to the specific needs of a business is far less than with internal datacenters

Interoperability: The highly-customized internal applications that many companies rely on most heavily are often incompatible with generic IT infrastructures available within the cloud