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July 14, 2008

Cloud Draws Skepticism Today, but Could Draw Billions Tomorrow

Derrick Harris

When it comes to cloud computing, there are just as many questions as there are answers. Everyone knows, for example, that clouds enable on-demand provisioning, but there is some debate as to whether cloud platforms should automate scalability. And what about security: Is the cloud as safe as some evangelists proclaim, or does it inherently — regardless of the safety measures taken — leave sensitive data at risk? We attempt to answer some of these questions in this week’s issue.

First, Dennis Barker investigates the fundamental risks of cloud computing in the first article of a two-part series. What the security experts seem to agree on is that the risks and security limitations of most current cloud offerings need to be resolved before enterprises can take a serious look at moving their primary applications to the cloud. For one, multi-tenant infrastructures expose data and applications to a greater risk of breach or lapse than do dedicated infrastructures, which tends to be a deal-breaker when millions of dollars are in question. Additionally, regulations like HIPAA and Sarbanes-Oxley place requirements on where data can be stored geographically. I can’t recall hearing of one cloud service to date that lets you choose where you data is processed and/or stored, and, quite honestly, I’m not sure if allowing users to adopt such a policy would fall in line with the don’t ask-don’t tell mandate that seems part and parcel of cloud computing.

The second part of our look at cloud security will run next week, and will focus what providers can to do make the cloud safer for all involved. As it turns out, the naysayers don’t have to get the last laugh.

These security concerns parlay into our look at the differences between more-traditional managed hosting solutions and cloud services. With virtualization allowing for on-demand provisioning of additional machines and flexible billing creeping into the hosting world, blurring the line between them almost to the point of being indistinguishable, there must be some reason why enterprise customers would choose hosting over the cloud. I spoke with providers GoGrid, Layered Technologies and Rackspace, as well as Tier 1 Research analyst Antonio Piraino, to figure out where the companies that straddle the cloud/hosting line draw their distinctions.

Wouldn’t ya know, almost to a person they pointed to the real-time, flexible and shared nature of clouds, and almost to a person they suggested that enterprises aren’t yet ready for these characteristics. To the contrary, big businesses like knowing where their data will be stored, that it will be on dedicated VMs and that another user’s crash won’t bring down their services. As long as managed hosting can provide these assurances and cloud computing cannot, it seems like businesses will be leery of moving their most sacred applications into the cloud.

However, I wouldn’t let any of this skepticism get you down on cloud computing. It’s important to note that concerns around security, compliance, availability, etc., are all based in the present, whereas cloud computing — as real as it is today for certain types of jobs — is all about the future. I’ve been perusing the Google Group on cloud computing, and just last week a member posted highlights of a Deutsche Bank investment analysis citing the momentum that cloud services, particularly SaaS, are gaining. Another member pointed to a Financial Post article discussing Merrill Lynch’s prediction of a $160-billion-plus market for cloud computing. No, the sky is not falling after all.

If you’re at all interested in Diane Greene’s departure from VMware, you’ve no doubt read your fair share of articles and blogs speculating on the whys and hows of that severance. It probably hasn’t slipped your attention, then, that new president Paul Maritz comes from majority shareholder EMC’s cloud division. With all the talk coming out of VMware about its cloud aspirations, I’d just like to throw my hat in the ring with those drawing some degree of connection between Maritz’s appointment and this talk. As with most things, though, I guess time will tell.

There are plenty of other very big announcements filling out the rest of the issue, some of which we will be delving into in the weeks to come. Among these are “Department of Defense Building a Cloud,” “Univa UD Extends UniCluster to Amazon EC2 Cloud” and “Virtualized Data Grid Provider Xeround Secures $16M.”


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