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85 Cloud Computing Vendors Shaping the Emerging Cloud

By James Maguire, Jeff Vance and Cynthia Harvey
August 25, 2009

ALSO SEE: Cloud Computing Vendors Helped by Recession

Go directly to the list of cloud computing vendors.

The era of cloud computing is dawning amid great fanfare, supported by mountains of cash and reams of hype. Whether this change is positive is debatable – very real concerns plague cloud computing – but the tech industry has decided: the cloud is king.

Just as the hulking mainframes of the 1960s were replaced by client server systems in the 1980s, the in-house datacenter is now shifting toward an externally-based model. Vendors of every size are maneuvering, targeting this new market. They know their future rests on their ability to grab a piece of this emerging paradigm before it’s fully established.

Far more than the general public realizes, this once-in-a-generation shift is radically altering the technology business. In the process it’s also altering everything from healthcare to education to retail. Even the U.S. government, never an early adopter, just unveiled plans to start offering cloud computing services to federal agencies.

But wait. What exactly is cloud computing?

In the gold rush, many general IT vendors are becoming cloud computing vendors – or at least touting their products as such. In the same way that the lowly pretzel, once merely a salty snack, is now "low cholesterol," these days every new app is Specially Designed for the Cloud.

At times, it seems all tech vendors are cloud computing vendors.

In the hubbub, the term cloud computing is an ever expanding buzzword. There are private clouds and public clouds and hybrid clouds. Some people use “cloud” as a synonym for virtualization – while others clearly disagree with this use. So who’s right?

In lieu of an ultimate authority, let’s use research firm Gartner’s definition. It’s a good one:

“…a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a service to external customers using Internet technologies.”

Translated into human-speak: We’ll access our software over the Web, instead of on our hard drive.

Your software might sit on a server in New York or New Delhi or New Haven, Connecticut. Or – hang on to your jetpack – maybe that app combines services from apps that reside in New York and New Delhi, with an add-on from a New Haven provider. Beam me up, Scotty.

Forget for a moment how complicated this all is. The fantabulous level of mind-bogglingly sophisticated infrastructure support. The monitoring, the firewall issues, the rent vs. buy debates, the many snafus of remote software.

Instead, think about how the cloud upsets the status quo. In years past, only deep-pocketed companies had muscular datacenters. This offered huge competitive advantages. Now a fledgling start-up or an entrepreneur with an idea can rent one as needed. The cloud levels the playing field remarkably.

This is precisely what cloud pioneer Amazon EC2 offers, renting hefty server power to small-fry outfits (and some not so small-fry). Just as the Internet enables any 12-year-old to appear grown up, a rented cloud-based infrastructure gives any dreamer with a few dollars a Fortune 500-style datacenter.

Big boys, be afraid. And SMBs, rejoice.

cloud computing spend, cloud computing vendors
Worldwide cloud computing spend by type, 2012 forecast (source: IDC)

This doesn’t mean the little guys will run the cloud show. Not even kind of. Cloud Computing’s Big Five – IBM, Microsoft, Amazon, Salesforce and Google – each has an hyper-aggressive eye on the prize.

Microsoft, with its Azure cloud initiative, is quietly investing massively in leviathan datacenters across the country to host its cloud offering (imagine, a software firm pouring big bucks into physical machinery). IBM’s cloud push benefits greatly from the company’s global stance and deep focus on services. Google’s cloud strategy is supremely well positioned, with a well-tuned international server network and its Web-based Chrome OS. Some industry wags deride Amazon as the utility cloud provider whose offering isn’t differentiated enough, yet it keeps growing. Plucky, self-promoting Salesforce – with its cloud platform – is perennial acquisition bait, with the leading rumored suitors Google and Oracle (why not EMC – they snapped up VMware?)

Cloud Vendor Backlash Due Any Quarter (the Dirty Secret)

Despite the hype, the cloud is earning plenty of Bronx cheers. A report in April from McKinsey & Company set off a firestorm among the chattering classes. Titled Clearing the Air on Cloud Computing, it opined that while the cloud is good for SMBs, large companies are better served keeping operations in-house. The cloud, which McKinsey – gasp! – called over-hyped, could actually be more expensive for big firms. Particularly when you factor in lost tax deductions for in-house equipment depreciation.

Plenty of cloud computing vendors attacked the report. Some said it neglected the pace of cloud innovation. Others noted that competition would push down prices. But the volume of debate revealed that its criticism surely hit a nerve.

Yet questions over the cloud’s financial advantages are only part of its challenge. Clearly, cloud computing has a dirty little secret the vendors don’t talk about much: security.

As security guru Bruce Schneier notes, with the cloud “You have to trust your outsourcer completely.”

When a company works with an external cloud vendor, that external firm, too, often relies on outsourced support. A cloud vendor may itself be outsourcing some (or a lot) of its own operations. Which means you, the unsuspecting cloud client, may be relying on an entire pyramid of vendors, whose alliances and sense of fair play (or lack thereof) can shift by the nanosecond.

Consequently, the idea of ”cloud computing security” is something of an oxymoron.

One of these months you’ll read headlines about a big fat disaster. Cloud provider A goes down, which – whoops – brings down cloud providers B, C, and D. Data is lost, customers flee. But surprise: management at companies C and D had never heard of company A – until its implosion means they can’t update client records for ten days.

Still, the bad news won’t kill the cloud. We can’t ever go back to enclosed datacenters. The cloud is simply easier, faster and more flexible. We hear about big plane crashes and keep flying, and we’ll learn about massive data disasters and keep using the cloud. You can pine for the good old days when everything sat on your friendly local server, but that era is rapidly passing away.

Cloud Computing Winners and Losers

Among the losers: Anyone who’s tied to a particular operating system. Future humans will look back and chuckle about the OS flame wars, the squabbles over Windows, Linux and Mac. When everything is delivered over the Net as a service, the platform OS ceases to matter. As long as the software can, say, crunch numbers or track inventory, it can be any OS.

Oh sure, the first generation of cloud vendors will still make noises about the OS. Customers will reflexively gravitate to familiar platforms. But long term, an employee accessing a remote service only cares about how well it works, not who made it.

Another loser: in-house IT support staff. When a big chunk of the IT infrastructure resides out-of-house, that tribe of uber-techies, the server room folks who’ve never liked the suits, won’t be needed. Or less of them will be needed.

In theory the exiled IT staff will find work among the growing crop of third party cloud providers. But the problem is that remote datacenters will get ever more efficient and virtualization technology will allow fewer and fewer staffers to run them.

(The staffers' best hope is that the coming cloud world will be so horribly complicated – and it will be – that they’ll still be very needed. In fact they may be needed more than ever. However, the cloud will turn the IT talent competition into even more of a global marketplace than it is now. It you’re not able to go head to head with pros from India, Malaysia and Poland, you better go teach science at the local high school.)

Perhaps the biggest winner: security providers. The last few years have seen the rise of the IT security pro, with hackers getting smarter and networks more complex. And the cloud’s crazy spaghetti patch of connections, with spigots everywhere, is a hacker’s heaven. The resulting confusion will turn security folks into the new royalty. Mothers, tell your babies to get IT security training. They’ll be employed for life.

The other winner: compliance experts. Who’s responsible for your data when it resides remotely? Who’s reviewing all the thick contracts with a fine-tooth comb to ensure your data is properly monitored? (or that there’s someone to sue if it isn’t?) Bring on the lawyers and the regulators.

On a brighter note, probably the cloud's biggest winner – at least in its infancy – will be entrepreneurs and vendors. Freed from the enclosed confines of the in-house data center, cloud computing offers a blooming garden of open opportunities. Everything is being reshaped, from network architecture to application delivery. The entrenched vendors can’t control every profit opportunity. There's room for plenty of interlopers.

Which brings us to our list of 85 cloud vendors. Each is getting in early, when vast swaths of clients have yet to even consider the cloud, much less pick a vendor. Yet many won’t survive. The emerging cloud is too complicated, with too many turns in the road before it’s established. Particularly for the small, under-funded firms, navigating so much rapid change (and greater client demands) will be too much.

Be aware that this list of cloud computing vendors:

• Isn’t necessarily the “greatest” or the “top” cloud companies. Indeed, some are giants and some are start-ups without a single client. But as a cohort they provide a real-time snapshot of an important emerging trend.

• Although this list is numbered 1 through 85, the numbers are merely a helpful guide. Having a low or high number is not indicative of any ranking.

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