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Top Business and Technology Questions in Cloud Computing

Originally published July 15, 2009

Cloud computing is quickly evolving and spreading like a storm, leaving IT organizations, business units, end users and the vendors with many critical questions about business drivers as well as the business and technology requirements for defining and executing the right strategy in the fast evolving cloud computing storm.

Top CIO concerns with cloud computing include:

  • Security

  • Performance

  • Availability

  • Integration

  • Customization
This article will discuss the key business drivers, benefits and challenges, as well as the technical challenges and requirements for cloud computing within and beyond the enterprise.

Figure Legend:
  • SaaS = Software as a Service
  • PaaS = Platform as a Service
  • IaaS = Infrastructure/Integration as a Service
Figure 1: Cloud Computing Business Drivers and Technology Requirements.

What is Cloud Computing?

I recall a few years ago that I would have to click umpteen buttons and wait several minutes to search my laptop for a file. Then along came the World Wide Web, and I could effectively search the entire Web’s billions of documents and find relevant information in a fraction of a second and free of cost. This resembles the enterprise cloud computing situation today. More importantly, cloud computing represents an opportunity for enterprises today.

Plagued with costly legacy and custom applications, enterprises are beginning to consider leveraging the new breed of Google/Amazon-like cloud computing infrastructure such as systems, storage, middleware and business applications (i.e., software as a service) at a fraction of the capital expenditure costs and a fraction of the time required to design and deploy enterprise applications.

A More Formal Definition

Cloud computing is an emerging style of computing where massively scalable virtual computing resources and applications are provided as a service over the Internet to multiple external customers. It incorporates computing infrastructure as a service (IaaS) and business application software as a service (SaaS), as well as other emerging technologies with the common theme of reliance on the Internet for virtually delivering computing and business application services.  

Wikipedia describes cloud computing as follows:

Cloud computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure in the "cloud" that supports them.

Public and Private Clouds: Public clouds or external clouds refer to cloud computing in the traditional mainstream sense, whereby resources are dynamically provisioned on a fine-grained, self-service basis over the Internet, via web applications/web services, from an off-site third-party provider who shares resources and bills on a fine-grained utility computing basis. Private clouds or internal clouds are newly coined words that some vendors have recently used to describe offerings that emulate cloud computing on private networks.

By enabling the enterprises to quickly and cost effectively evaluate, adopt and deploy the best infrastructure and business applications, cloud computing has the potential to dramatically increase business agility and improve the operational performance of the companies, thereby creating competitive advantage.

Business Drivers for Cloud Computing

SaaS applications for customer relationship management (CRM), sales and marketing automation, online advertisement and customer service are already being used by many large and small enterprises and the adoption is rapidly growing.  

There are several key business drivers for cloud computing including cost reduction, usage-based billing, fast deployment, capacity on demand and ease of maintenance of cloud-based solutions.

Since both cloud computing infrastructure and application services are sold as a service, the upfront capital costs are minimal in exchange for increased ongoing variable costs. The conversion of fixed capital expenditure (CapEx) costs to variable operating expense (OpEx) costs creates significant and immediate cost savings and significantly affects IT budgets.

We are at the beginning stages of a new wave of SaaS enterprise applications. As these applications become more mature, many organizations will bypass IT and directly sign up for cloud-based services.

There is also the business need for increased productivity by leveraging the latest web-based tools and technologies for web-based sales and marketing, web analytics, advertising, customer support, instant messaging, blogging and social networking applications like Facebook and LinkedIn to sell products online, support customers and create customer communities. Most of these services exist outside the enterprise and only as web services; therefore, they require integration of the enterprise applications with the public clouds.

Top Challenges on the Way to the Clouds

Although smaller data warehouses and data marts are already being offered as a web service, data intensive enterprise applications with very large data sets (tens of terabytes) and large daily data refresh rates (terabytes) are more fit for private clouds.

As an example, a typical data warehouse stores many terabytes and sometimes many petabytes of highly sensitive enterprise data. The challenges with moving large data warehouses to the cloud are huge. These challenges include data security issues, daily data cleansing and refresh of the warehouse with hundreds of terabytes of operational data from enterprise resource planning (ERP), customer resource management (CRM) and web applications.

In contrast, some enterprise applications such as email, web analytics and search do not require daily transfer of massive data to these systems and thus are more fit for transition to cloud services. Typically, enterprise and customer data constantly trickles into these applications; therefore, they do not require significant network bandwidth. 

Business Considerations for Cloud Computing

There are many important business requirements for both cloud infrastructure and applications. These requirements include total cost of ownership (TCO) and return on investment (ROI) for the cloud, risk mitigation especially for cloud application security, business application performance and availability, and application customization and flexibility.

In addition, there are issues dealing with single source vendor lock-in, multi-tenancy with other web service enterprise customers and the associated security issues as well as issues dealing with accurate billing, customization, integration and interoperability of the cloud with the existing enterprise infrastructure and applications.

"Security is one of the core competencies of the cloud provider."  (Jason Staten, Forrester)

Technology Requirements for Cloud Computing

There are many key technology requirements for cloud computing including cloud security, scalability, performance, network bandwidth and throughput, availability, redundancy, support for standards, the need for customization, transparency, data and application integration, interoperability of the enterprise applications with the public clouds and the need for an end-to-end architecture to fully and securely integrate enterprise applications with the public cloud infrastructure and services.

Top technology challenges for cloud computing include security, interoperability, availability, scalability, bandwidth, flexibility and service level agreements (SLAs).

The upcoming issues of the BeyeNETWORK CloudTalk Newsletter will feature articles and expert interviews with thought leaders and credible experts in the field including customers and leading cloud infrastructure (systems, software) providers. Relevant events and other pertinent resources will also be included.

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  • Cyrus GolkarCyrus Golkar
    Cyrus Golkar is an information technology executive with a unique combination of entrepreneurial, business and technical expertise, and more than 20 years of experience in enterprise software, database, analytics, web services and cloud computing.

    Previously, Cyrus led Sun Microsystems (now Oracle) $2 billion database, business intelligence and data warehousing business for 9 years, recommended the acquisition of and investment in database companies, and led the development of Sun's data warehouse appliance.
    He is also the co-founder of several companies, including 3Bubbles
    (acquired) with the creators of Jabber, the open standard for web-based instant messaging.

    At Siemens/Pyramid, Cyrus was recognized by the CEO for the creation of "Smart Warehouse" an industry leading data warehousing business that generated $200 million in annual revenue. He also held leadership and technical positions at Open Text and GE.

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