News

2010 a Boom Year for Cloud Computing?

• By Stephen Swoyer
• December 08, 2009

There's still a lot of hype surrounding the platform, but if recent market research is any indication, computing in the clouds could achieve a breakthrough of sorts in 2010.

Consider a new study from market watcher Aberdeen Group, which concludes that companies pursuing cloud strategies are able to realize significant savings, including a near 20 percent reduction in administrative costs, compared to non-adopters.

Aberdeen's research comes with an obvious caveat: It isn't enough to simply develop a cloud computing strategy; successful cloud adopters -- shops that reap the biggest benefits from their cloud implementations -- must also develop appropriate support resources, such as a formal cloud computing team or task force, to better manage their cloud investments.

"Discussions of cloud computing have made their way up to the boardroom just as board-level talk of outsourcing did in the 1980s and the Internet did in the 1990s," wrote analysts Bill Lesieur and Carol Baroudi in "Business Adoption of Cloud Computing," a recent Aberdeen research publication. "Beyond cloud as a transformational technology, the CFO and board level are looking at the economics of cloud, specifically converting traditional fixed capital expenditure...spending to variable operating expenditure [or opex] spending."

One salient takeaway, Lesieur and Baroudi concluded, is that successful cloud adopters continuously monitor their cloud-based assets to measure both efficiency and use. On top of this, Aberdeen noted, successful cloud implementations start from the top down (i.e., with C-level leadership). They're also ROI-driven -- or, more precisely, use ROI analysis to drive deployment decisions.

Cloud applications aren't deployed in a vacuum, either. Successful cloud adopters take end user satisfaction seriously; cloud-based apps can't have an impact, much less fulfill ROI projections, if users aren't consuming them.

There's a kind of stratification between cloud adopters, according to Aberdeen. Enterprise-class shops tend to pursue cloud computing as a consequence of existing investments in virtualization and, to a lesser extent, green IT. In this sense, cloud computing could even be described as a logical continuation of extant virtualization or energy-efficiency efforts.

One upshot of this is that enterprise IT organizations, more so than IT practices in small- and midsize (SMB) shops, have a disproportionate interest in private clouds. More than half (56 percent) of enterprise IT organizations are building their own private cloud-based infrastructures, according to Aberdeen; less than one-fifth (20 percent) of SMB shops are doing as much.

"Having become a mainstream IT infrastructure solution for a number of years, virtualization has dramatically changed datacenter operations," Lesieur and Baroudi wrote. "Cloud computing was born to further abstract the physical hardware infrastructure from the services and application layer of IT architectures."

SMB customers, on the other hand, typically start with the cloud platform-as-a-service (PaaS). These shops have either been slower to pursue in-house virtualization or energy-savings efforts or -- just as likely -- have fewer legacy resources to bring along for the ride. One upshot of this is agility. They can more easily transition to a loosely coupled PaaS cloud architecture. Nearly half (45 percent) of SMB shops cited plans to outsource some or all of their applications to PaaS cloud providers.

Similarly, SMBs are much more likely to outsource infrastructure resources to PaaS providers, too. According to Aberdeen's survey, 28 percent of SMB shops cited a willingness to do as much compared to just 15 percent of large enterprises.

"Enterprise companies have more complex IT environments with legacy applications and infrastructures while SMBs are adopting cloud applications that do not require legacy planning and transition strategies," Lesieur and Baroudi wrote.