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Cloud Computing Guide

By Thor Olavsrud
May 11, 2010

ALSO SEE: Ten Cloud Computing Leaders

Cloud Computing: News and Additional Resources

Cloud computing is a method of provisioning computing resources, including both hardware and software, that relies on sharing those resources rather than using local servers or personal devices to handle applications.

In theory, cloud computing is a way for IT departments to increase capacity or add capabilities on the fly, without having to invest in new infrastructure, train new personnel or license new software.

In the cloud computing model, workers log into a Web-based service that hosts all the programs the users need for their jobs, from e-mail to word processing to complex Business Intelligence software. The service, and the hardware it runs on, is deployed, maintained and upgraded by another company, which generally offers service-level agreements (SLAs) to guarantee the service.

Examples of cloud computing include using Google App Engine to run your company's e-mail services, contracting with Amazon Web Services to host your infrastructure, or contracting with Salesforce.com to provision your company's customer relationship management (CRM) software.

The number of cloud computing vendors is growing rapidly, with a continual fresh crop of cloud computing start-ups. Indeed, because of the potential power and influence, the fierce struggle to dominate the cloud computing market is prompting titanic investments.

Cloud Computing

Cloud Computing Definitions
Cloud Services, contrast with Cloud Computing
Cloud Computing, contrast with Cloud Services
Cloud Computing vs. Utility Computing vs. SaaS
Cloud Computing Benefits
Cloud Computing Concerns
Cloud Computing's Five Myths
Cloud Computing: News and Additional Resources

Cloud Computing Definitions

The definition of cloud computing remains somewhat fuzzy, as it is often used to describe an array of related concepts. More than a few people are uncertain as to what separates cloud computing related concepts such as utility computing, software-as-a-service (SaaS) and virtualization.

The vagary led Larry Ellison, Oracle's chief executive officer, to famously say of cloud confusion, "The interesting thing about cloud computing is that we've redefined cloud computing to include everything that we already do. I can't think of anything that isn't cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women's fashion. Maybe I'm an idiot, but I have no idea what anyone is talking about. What is it? It's complete gibberish. It's insane. When is this idiocy going to stop?

"We'll make cloud computing announcements. I'm not going to fight this thing. But I don't understand what we would do differently in light of cloud."

That hasn't stopped analysts at research firm IDC from attempting to establish a more concrete definition. For those who continue to seek more useful terminology, IDC distinguishes between Cloud Services and Cloud Computing.

"When most people talk about "cloud computing," they usually refer to online delivery and consumption models for business and consumer services," said IDC's Frank Gens. "These services include IT services—like software-as-a-service (SaaS) and storage or server capacity as a service—but also many, many "non-IT" business and consumer services.

"Indeed, the vast majority of these online services are not, in the mind of the user, IT or "computing" at all—they are about shopping, banking, selling, collaborating, communicating, being entertained, etc. In other words, most people using these services are not "computing," they are living! These customers are not explicitly buying "cloud computing," but "cloud services" that are enabled by cloud computing environments; cloud computing is hidden underneath the business or consumer service."

So IDC's definitional framework is as follows:

  • Cloud services. Consumer and business products, services and solutions that are delivered and consumed in real time over the Internet
  • Cloud computing. An emerging IT development, deployment and delivery model enabling real-time delivery of products, services and solutions over the Internet (i.e., enabling cloud services)

In other words cloud computing is the IT environment that encompasses the stack of IT and network products that enables the development, delivery and consumption of cloud services.

Cloud Services, contrast with Cloud Computing

According to IDC, there are eight key attributes that define cloud services, as follows:

  • Offsite. The service must be location-agnostic, meaning it does not matter where the user sits when accessing the service. Generally, third parties provide these services, but this is not essential. Companies can implement the cloud model with their own organization, for use by their own employees, as an "enterprise cloud." IBM's Blue Insight cloud is a prominent example.
  • Accessed via the Internet. The service offers standards-based, universal network access. This does not preclude service providers offering security or quality-of-service value-added options.
  • Minimal/no IT skills to "implement." The service offers online, simplified specification of services requirements. It eliminates the need for lengthy implementation services for on-premise systems that support the service.
  • Provisioning. The service offers self-service requesting, near real-time deployment and dynamic and fine-grained scaling.
  • Pricing. Pricing for the service is fine-grained and usage-based, though as a convenience to some customers, providers may mask pricing granularity with long-term, fixed-price agreements.
  • User interface. Browsers and successors to browsers are used to interact with the service.
  • System interface. Web services APIs are used to interface with the service, providing a standards-based framework for accessing and integrating with and among cloud services.
  • Shared resources/common versions. System resources are shared among users, improving supplier and customer economics; there is some ability to customize "around" the shared services, via configuration options with the service, workflow/process management among services, etc.

Cloud Computing, contrast with Cloud Services

Meanwhile, cloud computing is the IT foundation for cloud services. A partial list of cloud computing attributes compiled by IDC include the following:

  • Infrastructure systems. The infrastructure consists of servers, storage, networks, etc., that can economically scale to very high volumes, preferably in a granular fashion.
  • Application software. The software provides Web-based UIs, Web services APIs, multitenant architecture and a rich variety of configuration options.
  • Application development and deployment software. The application development and deployment software supports the development, integration or runtime execution of cloud application software.
  • System and application management software. The system and application management software supports rapid self-service provisioning and configuration, usage monitoring, etc.
  • IP networks. IP networks connect end users to "the cloud" and the infrastructure components of the cloud to each other, leveraging network-embedded technologies for quality-of-service, security and optimized application delivery.
  • Pricing agreements. Pricing agreements with cloud services providers scale technology costs with their cloud services volumes/revenues.

Cloud Computing vs. Utility Computing vs. SaaS

But IDC's definitions are not universally shared. According to 3Tera Chairman Barry X Lynn, cloud computing enables users and developers to utilize services without knowledge of, expertise with, nor control over the technology infrastructure that supports them. Meanwhile, utility computing provides on-demand infrastructure with the ability to control, scale and configure that infrastructure.

SaaS, according to Lynn, is a software-enabled service that is offered on the Web on a month-to-month subscription or a pay-per-use basis, rather than having to purchase or license the software.

Under IDC's rubric, utility computing falls under the umbrella of the cloud computing definition, while SaaS falls under the umbrella of cloud services.

Cloud Computing Benefits

So what potential benefits does cloud computing offer? According to Forrester analyst Ted Schadler, there are three key benefits of cloud computing:

• First, cloud computing promises speed. IT departments don't have to go through the lengthy process of building IT infrastructure and deploying software to multitudes of computers when using cloud services. Instead, they subscribe to services and receive them.

• Second, the cloud computing provider is responsible for maintaining and upgrading the infrastructure, meaning that the customer's IT staff can focus on more important core business processes.

• Third, firms only have to pay for the resources they use. Instead of buying hardware, software and consultants to set up and run applications, businesses can pay a cloud-based provider by the user by the month.

Disaster recovery is another added benefit. Cloud providers are offsite, maintain the servers in their own data centers, fix any problems, manage disaster recovery planning and continually upgrade the software.

Other benefits of cloud computing include:

  • Scalability. IT departments can add or subtract capacity as the load dictates and companies only pay for what they use.
  • Skilled practitioners. Cloud computing vendors include stalwarts like Google, IBM, Amazon, Microsoft and Yahoo!. They can deliver virtually limitless storage and computing power.
  • Quality of service. The vendor offers 24/7 customer support and immediate response to emergency situations.

Cloud Computing Concerns

There are a number of issues surrounding cloud computing as well, including security, privacy, compliance and vendor lock-in.

Cloud computing security is an oft-cited reason for wariness toward cloud services. Skeptics argue that once your data exists out in the cloud, you are hard-pressed to ensure no one else has access to it. This issue may be causing more than a few firms to delay adoption of cloud services.

Burton Group analyst Eric Maiwald said firms considering cloud services should resolve these issues with providers before jumping in: how data is encrypted and stored, how e-discovery can be done if need be, what controls there are and whether the cloud provider has passed a SAS-70 audit.

According to a report released by the Cloud Security Alliance in March, the top threats to cloud computing include the following:

  • Abuse and nefarious use of cloud computing. Infrastructure-as-a-service (IaaS) providers offer their customers the illusion of unlimited compute, network and storage capacity -- often coupled with a "frictionless" registration process where anyone with a valid credit card can register and immediately begin using cloud services. The CSA said spammers, malicious code authors and criminals can abuse the relative anonymity behind these registration and usage models.
  • Insecure interfaces and APIs. Cloud computing providers expose a set of APIs that customers use to manage and interact with cloud services. Provisioning, management, orchestration and monitoring are all performed using these interfaces. The security and availability of general cloud services is dependent upon the security of these basic APIs. From authentication and access control to encryption and activity monitoring, the vendor must design the interfaces to protect against both accidental and malicious attempts to circumvent policy.
  • Malicious insiders. The convergence of IT services and customers under a single management domain, combined with the general lack of transparency into provider process and procedure amplifies the threat of malicious insiders within the cloud vendor.
  • Account or service hijacking. While account or service hijacking aren't new, they take on a new dimension in the cloud. If an attacker gains access to your credentials, they can eavesdrop on your activities and transactions, manipulate data, return falsified information and redirect your clients to illegitimate sites.

Cloud Computing's Five Myths

San Francisco's Golden Gate University moved to a largely cloud-based infrastructure several years ago. According to Anthony Hill, the CIO of Golden Gate University who oversaw the move to cloud, not all is as it seems when it comes to both the benefits and problems of cloud computing.

Hill said that while security is often the first concerned mentioned when it comes to cloud computing, he doesn't see it as a big concern. He told InformationWeek's Frederic Paul that he's more comfortable with his data in an Oracle data center than he is with it in his own data center. He noted that no midmarket organization could bring to bear the level of security and redundancy on its own that Oracle offers.

On the other hand, Hill said that cloud-computing champions often trumpet the ability to avoid capital expenditures (CapEx) in favor of operating expenditures (OpEx). He noted that in the real world it is sometimes advantageous to bury IT costs in the capital budget and keep it off the P & L for a few years.

Another benefit of cloud computing is the ability to offload management risk. The vendor becomes responsible for reliability, availability and so forth. However, Hill noted that companies should remember that they are exchanging management risk for vendor risk. Organizations are still vulnerable to business disruptions if the vendor experiences problems, or, worse, goes out of business.

Some cloud-computing advocates also suggest that the model provides a great deal of agility. But Hill said switching vendors is not a trivial task. In fact, Richard Stallman, outspoken founder of the Free Software Foundation, has called cloud computing a "trap" that forces people into locked, proprietary systems.

Finally, Hill said it is a myth that "tight" SLAs, which measure breach of contract by specific metrics, are the key to a successful relationship with a cloud-computing vendor. Instead, Hill suggested cloud-computing customers negotiate SLAs that allow for termination based on lack of customer satisfaction.

Cloud Computing: News and Additional Resources

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Cloud Computing and the New Network Center

CDC Makes Cloud Computing Play With TradeBeam Deal

How Cloud Computing Security Resembles the Financial Meltdown

Top Ten Reasons to Use SaaS

Cloud Computing's Environmental Question

Interop Las Vegas: It's the Cloud

SaaS Survey Reveals Real World Experience

IDC Sees Cloud Market Maturing Quickly

Ten Challenges Facing Cloud Computing

FTC Raps Weak Privacy in the Cloud, Social Media

Are SaaS/Cloud Computing Vendors Offering Questionable Contracts?

Use the Cloud to Host Your Enterprise Email

Cloud vs. In-House: Choosing an Email Solution

Cloud Security Needs Addressing

Business Intelligence Software: Cloud Burst Ahead

10 Emerging Virtualization Companies Shaking up Datacenters in 2010

Using the Cloud to Guard Against Vendor Lock-In 10 Hot Cloud Computing Startups for 2010

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Cloud Computing: What is 'Private' Cloud’?

85 Cloud Computing Vendors Shaping the Emerging Cloud

Five Cloud Computing Giants: Who Wins?