Pipeline Publishing, Volume 5, Issue 3

	This Month's Issue:
	Unlocking the Power of Web 2.0

Cloud Control

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Clouds ROCK!

Or as one young developer on the Cloud Computing Googlegroup said, "Clouds RAWK!" There are many reasons why a new technological concept takes off. One of the most important is capturing the interest of the upcoming generation of technologists and developers who will adopt it and use it. The uptake of application server technology by 'generation X' developers, carried it to the now dominant paradigm of computing. Is Cloud Computing the paradigm of 'generation Y'?

But the older business people with checkbooks are also interested. Bill Snyder in his blog: "Cloud computing, a concept that can be as airy as its name suggests, is piquing the interest of forward-looking IT execs and attracting sizable investments from players like IBM, Amazon, Akamai, Sun, EMC and Salesforce.com. Sure there's a big helping of hype and plenty of reasons to be skeptical, but a growing number of startups -- and a still small number of enterprises -- are moving applications and infrastructure into a third party-provided cloud." But for executives to shell out capital investment there must be an industry pain point that needs a product. For each of these "sizeable investments" someone prepared a business case. Bill Snyder, again: "What's driving Cloud Computing? Out-of-control costs for power, personnel and hardware, plus a shortage of space in datacenters and a desire to speed up and simplify network deployment and management."

Significant bellwether businesses are using capital to build clouds. This means clouds have moved beyond a toe in the water, and beyond hype. But these current business drivers toward elastic usage are currently narrow early-stage drivers. The example of valuable business utility that everyone cites is a major publisher using a cloud grid to scan their archives of a hundred years of old articles and OCR/PDF them for internet viewing – completing this in the course of two of days. (Would have been one day but a coding mistake caused them to re-run everything the next day).

But for customers to stick around, for this to be the next big wave, there must be more than occasional use. And there must be some overwhelming new value if this is to become a paradigm shifting disruptive technology. Otherwise it is just greater efficiency, an upward rise in the slope in the curve of incremental value.

So is Cloud Computing the future of a significant part of business computing? Robert Stinnett, in email on

There is still much debate on just what this cloud architecture is – perhaps because the word comes from Marketing rather than IT.

cloud-computing@googlegroups.com, writes: "Cloud Computing is a radical change … that is changing how we look at IT. I often like to ask two questions, 'What could happen if we tried it?' and 'What do we have to lose by trying it?' Cloud Computing, in our opinion, is going to reshape many IT functions and economics will be the driver behind it. The workplace is changing and so many people do not realize it. We are in a global economy. It's going to be a fun ride...." Do you agree with Robert, and these others, that Cloud Computing is coming and it will be a huge wave of change? Or, as his hyperbole suggests, is he over-hyping it?

Under the Clouds of War

Outsourcing is not a new business story. Remember the rise of UPS and FedEx. Shipping did not provide a way of differentiating companies, just an avenue for goods to market that was cheaper and more convenient for merchants than running their own transport fleets. Is Cloud Computing just an old business story making use of new technologies? Outsourcing succeeds best when there is little core differentiation provided to a business by that which is becoming outsourced. When a company can use something for competitive advantage, they keep it inside the company under close and watchful management. So tasks placed into Cloud Computing either must not be critical to the business, or if critical, there must be several outsourcing providers that can pick up the service at a moments notice. Just like the outsourcing of shipping that UPS and FedEx provide.

With this argument, conversion of internal applications to SaaS in a cloud will occur for software that does not lend itself to (a) customization or specialization at the deployed company and (b) where no particular competitive advantage exists. This is called a "context practice": it delivers business activities that are mostly internal to the company, such as HR services and payroll. So, if the business practice is context and non-mission-critical, then always put it in the cloud; outsourcing then allows the redirection of maintenance effort into to competitive differentiators. Salesforce.com is the flagship example of this.

When an internal group fights having its activity outsourced, it tends to introduce a fairly predictable set of arguments. These

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