Cloud computing not just pie in the sky

Cloud computing not just pie in the sky

Some big players are betting the computer model will start gaining traction.

The disruptive effects of clouds on picnics and other leisure activities are well known, but if some of the biggest names in information technology are right, they'll also bring a deluge of changes to the industry over the next five years. Google,, EMC, VMware and are just some of the companies that are betting businesses will soon turn to computer services delivered from what they're calling "the cloud".

They're also hoping the shift will loosen the grip Microsoft, IBM, Oracle and SAP among others have had on an industry that's previously relied on organisations owning their own computing gear.

Cloud computing isn't new and Google chief executive Eric Schmidt is on record admitting he mistakenly tipped the idea would take the information technology industry by storm more than a decade ago.

Since then the idea has popped up in guises such as ASP (application service provider) and SAAS (software as a service), before coming back to the fore again as cloud.

Put simply, cloud computing is the delivery of computer software and services over the internet.

Proponents admit the cloud moniker is confusing and EMC vice president of technology alliances Chuck Hollis says he prefers to liken the idea to the distribution and consumption of electricity.

Individuals and businesses don't own their own power plants, he says. Instead, they simply flick on a switch when they want a little juice and then turn it off again when they're done.

For businesses that have to buy and support racks of servers and costly financial, human resources and supply chain software that can sit idle for as much as half of every day, the concept of paying only for what you use has undeniable appeal.

Leighton Holdings computer service subsidiary Infoplex is betting it is an idea that will soon prove very attractive for many businesses, but solutions manager Michael Baker also cautions that cloud computing still has a way to go.

He says providing dedicated storage services from the cloud is relatively simple, but rebuilding applications and computer systems so they can be available to a host of different organisations at different times and on demand is another matter.

"How do I start to break my application down to the point where it is elastic and can be pushed into other people's clouds for a period of time?" he asks.

"A typical example is, I might have a financial system that runs the last five days of the month and I don't want to have those kinds of resources sitting around [the rest of the time].

"To take that and push it into the cloud and have 25 machines on demand for five days of processing once a month, to physically and technically do that is very, very difficult.

"The power analogy is quite a good analogy, but the level of sophistication to accomplish that is very, very difficult."

That's not to say that cloud computing is all pie in the sky. Users of Gmail, Facebook, MySpace and have consumed cloud services for a number of years.

Customer relationship management software vendor has also done healthy businesses with thousands of Australian companies that now subscribe to enterprise software that is delivered over the web.

It's that subscription model that EMC's Hollis believes will have the most profound effect on the industry, taking away the safety net that vendors have had in knowing it was difficult for businesses to throw out equipment and start afresh with a new supplier.

"You need to be very focused on the quality of services that you're delivering because it's easy to move in and out," Hollis says. "If you're not doing the job for the customer they can pack up shop and move very, very quickly."

Infoplex's Baker says it is a model similar to the way the construction industry works, with organisations coming together to carry out projects before separating again.

He says the company also started to evolve into a cloud computing provider because of the way its initial customers in Leighton operate.

"We had to build a technology model that would allow [Leighton businesses] to loosely couple with us, access services and then move away from us if required," he explains.

"What we realised quite quickly was that to be successful with Leighton and the broader market we had to provide flexible, contained services."

Like Infoplex, has taken a punt that businesses and consumers will like the sound of that proposition with its EC2 (Elastic Cloud Compute) service, which offers storage and information processing over the internet.

However, it has also struggled in recent months with outages and Hollis notes that such issues mean that at least in the initial stages of cloud computing uptake, customers are going to have to trust that the services will be there.

That's not particularly reassuring for financial institutions and other computing intensive businesses. But the need to generate trust is one of the reasons why Google has teamed up with to try to convince businesses to use its hosted productivity applications instead of Microsoft's Office software.

Hollis says it's that need for trust that means the cloud computing industry is likely to eventually be dominated by current information industry majors such as EMC and IBM, all short-term disruption aside.

He also says the need for trust and the types of services available today mean it's likely to be a little while before the model becomes pervasive at the top end of town.

"I think the rate of uptake will be proportional to the size of the customer. For example, in the consumer sector cloud services are being consumed like crazy and small to medium sized businesses are probably just a little bit behind that," he says.

"However, there are not a lot of cloud services available for big, honking enterprises yet, but when those are available I think they will be consumed."

Fairfax Business Media

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