Tag Archives: Cloud Computing

Cloud and the end of the PC era

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I was asked to comment on the question “Are we close to the end of the PC era?” at ebizQ. It was a good enough question to prompt this post.

Indeed we are – I’d say that we’re already beyond it. I think that the proliferation of web applications is the curtain call of the PC era, leading the way to the Cloud era. I consider myself an avid PC user and cherish its stand-alone autonomy, yet I already use my PC mostly to access web based applications. And without web access, much of the stand-alone value would become a moot (or should I say Stale?) point.

The PC era introduced the practice of Business Empowered IT, in which the central IT department was short-circuited by business units who needed situational solutions “now and here”. That practice is endowed to the Cloud era, but in a more mitigated manner.

After the heady drunkenness of Business Empowered IT adoption, enterprises woke up to the hangover of unmanageable application portfolios and business disruptions due to rogue code. The result was a backlash trend towards centralized IT, which made PC’s a physical extension of the computing centre.

But it did result in a role change, in which Business got the lead role in requisitioning new solutions and IT projects.

The introduction of the Cloud and SaaS brought back some of the PC era Business Empowered IT practices, as the well-known example of Salesforce.com demonstrated. But at a very different level. What we see now is actually Business Empowered Solutions (or Business Technology, as Forrester termed it), in which what really matters is the process and not the IT implementation.

That is further amplified by the rapid adoption of mobile computing, in particular smartphones and tablets. As long as you have web access, who cares about the device?

And as one would expect, in the Cloud era we see completely new business practices and enterprises, which are the embodiment of Business Technology.

Take for example eBay and its Partner Network business (ePN). This whole business revolves around web sites and applications which reference eBay offerings and catalyse sales of eBay merchants. That’s actually a business which is already derived from existing Cloud business, and which could not exist without a thriving internet economy.

The PC, or any other IT equipment, has become immaterial and a commodity.

So here we go – applause to the good old PC, and Hello Cloud.

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How will cloud computing change the IT organization?

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With the proliferation of 2011 forecasts for Cloud Computing, it might be worthwhile to take a step back and look at a longer term horizon. Clearly, Cloud Computing would significantly impact the IT organization. I am probably not the only one to expect it to push IT further away from the technical terrain to the functional one.

That trend is not new. About 30 years ago , Alvin Toffler wrote In his futurology book “The Third Wave” that most upcoming IT professionals would not do programming but rather adapt pre-programmed software to business needs. Indeed, Enterprise Architects, Solution Specialists and Business Process Experts have already substituted Programmers and System Analysts in most IT organizations (in the Enterprise). It is about time for a name change: from IT to BT (Business Technology)…

Cloud Computing brings what might be “The Forth Wave”, in which the technology itself is abstracted –replaced by increasingly complex and intertwined application services which support business processes. The technology – both the hardware infrastructure and the fine grained software functions – is being offered as a consumable commodity, often as a service. BT is about selecting and orchestrating these consumables to fit and support the business activity of the enterprise. Programming and Software Development is relegated to specialized organizations. Analogies that come to my mind are car manufacturers and garages, although their products and services are much simpler.

Banking is a major early adopter of computing, and this move to BT is very visible when one examines the personnel composition of a bank. BT has taken over many processes that were previously performed by specialized back-office employees, and many consumers prefer to use self-service BT processes rather than be waited upon. That’s Convergence – a topic that merits quite a few dedicated discussions.

So here’s my question – how would you define the profession of a banking BT employee – a Banker, or a Computing Professional?

Cloud Computing – Hype or Reality?

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Last week I spoke about this theme at the CON.ECT conference in Vienna with the same title. I found it a pretty representative sample of the present perception and market situation. Here are a few highlights.

There is a very live interest in Cloud Computing. This event managed to convince some 40 C level and Team Managers to spend most of a day learning more and getting acquainted with this topic.

Most of the effective projects are essentially hosting of traditional applications in a virtual hosting environment, driven essentially by cost savings and a measure of on-demand infrastructure features.

Google, Amazon and Microsoft were perceived by the audience as the key players in the foggy space of Cloud Computing. My presentation of effective Cloud based core applications and implementation examples, and the technical architecture required for such, raised a lot of interest and surprised many attendees. I was in turn surprised by the almost total unawareness of the architectural/technical issues related to the deployment of Cloud applications (as opposed to Cloud Infrastructure).

Another intriguing and highly demanded topic was the legal angle. Data Protection and Privacy legislation impose quite specific responsibilities and liabilities on IT operators and providers, and the multi-tier settings of data storage in the Cloud create potential liability exposures that must be assessed and dealt with before a business implements such a solution.

My conclusion – there’s still quite a lot of fog and hype surrounding Cloud Computing, and the industry must continue to educate and communicate in order to enable the potential it holds.

I’m keen to have more opinions on this.

Tips about (Cloud) Service Culture and Contingencies

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A recent discussion at the ebizQ forum is “How Should Companies Prepare for When the Cloud Goes Down?”. It triggered this post.

What do companies do when the electricity goes down or the phone is out? I am not familiar with outage statistics of the Internet at large or specific Cloud Services providers, but I venture to guess that their track record is not worse than that of the major utilities – probably even better. What is often missing is feedback from those service providers when they experience problems. I rarely saw providers that acknowledged a service interruption while that interruption took place. This is the most frustrating part – you do not know if the fault is within your sphere or if it is external.

A very recent example is Orange in Switzerland – following the announcement of iPhone 4, their web site became overloaded and registered users could not access their account – unrelated to their interest in the iPhone offering. Yet, the only message you got when trying to log on was that it cannot present you a personal iPhone offer due to the high demand – and no word about the general login problem. It took about a week until you could log-in again. I expect providers to follow the example of Salesforce.com and be transparent about their on-going service level.

Then comes the contingency aspect. Those who need constant electrical power install UPS systems. Those who need constant communications use multiple alternative networks. And those who need constant computing have DRP and facilities and processes in relation to their service tolerance. Why should using the Cloud be different?

Now let me get back to the popular apprehension about the Cloud going down – and while we’re at it what about the risk of your Cloud Provider going under? One of the most popular SaaS integration applications at Magic Software is the replication of Cloud based data – simply providing an integration link between a Cloud application (such as Salesforce.com) and a local DBMS hosted on the company premises. I consider this as some kind of life insurance policy – not too expensive, not a perfect solution, but something that would help you survive in case of the ultimate disaster.

And putting things in proportion, data is probably safer and more available at Salesforce.com systems than in most companies’ data centres…

My recommendation? Do your due diligence when choosing a Cloud service, require transparency from your Cloud provider in particular on the service state, and set up a contingency to cover your disaster tolerance.

How to survive the dark side of Cloud Computing

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The last couple of weeks were rich with meetings and discussions about SOA, RIA and Cloud, in between the Forrester IT Forum in the US and the SOA Forum in Switzerland. What strikes me is the “lemming behavior” of a lot of software vendors who decorate their offering with Cloud and XaaS feathers, oblivious of the revenue precipice that aTransition to a Cloud related revenue modelwaits them right ahead.

I have touched upon this subject in my article on RIA and Cloud Computing Apps, as well as in a blog post last year (The coming out of the hybrid SaaS model). It’s ripe for an update.

What we have seen in the last couple of years is an increasing offer of Infrastructure As A Service (IaaS) providing quite elastic on-demand pricing, and an increasing number of software vendors using such infrastructure to offer Cloud hosted applications. The evolution of IaaS technologies facilitates the deployment of traditional on-premise applications over the Cloud, and tempts their vendors to slap on those “Cloud Feathers”. What seems to be put aside are the business model implications.

What the pure SaaS vendors (such as Salesforce.com) experience is a growing pressure of SaaS users towards more granular pricing – real pay per use and not only flat subscriptions. And sooner or later we will see this becoming more and more available. The consequence is a further reduction of software usage costs for customers, and by implication lower revenue per user for the vendor. Vendors will try to compensate by looking for cost reductions – both in developing and maintaining the software and in deploying it. So how can software vendors make money and increase shareholder value in such conditions? They would have to look for more productive and cost efficient software platforms, and implement new business models that tap into the entire ecosystem for shared revenue. And they should be prepared for a very tough transition, which might become fatal.

I recently came across a comment by a Magic Software shareholder that “the licensing model is difficult to understand and costly compared to other tools many of which do not even have licensing models. (this makes MGIC less attractive to potential new developers)”. What is perceived by the commentator as a limitation is in fact one of the bright spots which gives this company a much better position in the growing Cloud market. Magic software already creates most of its revenue using a shared revenue model – tapping into its ecosystem for shared revenues with its customers and partners. It gives the company a very robust outlook and resilience to the upcoming shift in the software business model.

I’m looking forward for your opinions.

Cloud semantics and Ground-Level observations

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I am commenting every once and a while on SOA and Cloud discussions at ebizQ forums. Recently I noticed a growing sensitivity to semantics – Private vs. Public Cloud, Web vs. Cloud, Web 3.0…

This prompted me to post here a couple of recent comments I made on the Cloud Computing forum

How much “Cloud” are “Private Clouds”?

I do not think that Cloud is about semantics, but rather about practice and reality within a concept. My personal experience shows that Enterprises are indeed implementing “Cloud Architecture” solutions which are substituting fat Client-Server implementations, but mostly using the traditional business model (perpetual ownership and in-house or hosted location) – when it concerns core and customized solutions. Cloud based infrastructure and applications delivered as a service and on-demand are indeed still limited to “commodity solutions” – collaboration, CRM, etc…

I described a couple of cases in The Extended Enterprise – from vision to reality with Rich Internet Application technology, and I find a consensus with many industry analysts that these types of implementations are well part of what they observe as Cloud implementations. I do not care much about how it is named, and if people prefer to reserve “Cloud” for a more restrictive checklisted definition that’s fine with me – but what I describe above is a very tangible reality of an application architecture that leverages internet based technologies – hosting resources, communications and clients.

Is “Web” distinct from “Cloud”?

I must admit that I do not understand very well the distinction between Web and Cloud. For me, Cloud is an integral part of the Web, relating to several aspects of it – in particular architecture and ubiquitous access to hardware and software resources. So they are converged already.

I perceive the Cloud “phenomenon” as firming up the business nature of the Web on the IT side, paving the way for Enterprises to exploit the Web not only for communication related aspects (from email to ecommerce and marketing) but also for the deployment of core applications. I am presently involved in such a project that brings the notion of “play list” to a composite application for financial brokers and portfolio managers in a global financial institution, incorporating most of the “bells and whistles” of Web2.0 user experience and a hybrid Cloud and Legacy backend. That is what I consider as Convergence – but the main converging domains here are Web and traditional Enterprise IT.

In my opinion, semantics are necessary for a meaningful communication, but let’s not overdo it. And how do you see it?

Being pragmatic about Multitenancy and Cloud Computing

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I used to think that multitenancy was a key incentive for Cloud Computing. The experience of the last couple of years leads me to a different view. The Cloud makes IT more ubiquitous, but multitenancy is far from being ubiquitous – so most of the services offered in the cloud are either not multitenant or use some kind of shared-hardware scheme (virtualization). So far there seems to be more cloud computing capacity than there is a demand for it – so the improved resource usage aspect is not so important. I also see that many enterprises adopt the Cloud advantages for their own software, for example rolling out core enterprise applications as RIA’s to their extended ecosystem partners and thus streamlining the supply chain and reducing costs.

My conclusion is that multitenancy is more of a future feature that would emerge when the economy would mandate it. So my recommendation is to adopt application platforms that enable multitenancy and develop future applications as such, and in the meantime take advantage of the Cloud using pragmatic approaches.