Who's Getting ROI from Cloud Computing Now

Who's Getting ROI from Cloud Computing Now

Recently the SDForum, a Silicon Valley-based technology and business incubator, hosted an all-day Cloud Computing Symposium. If the presenters at the Symposium are to be believed, cloud computing represents an infrastructure revolution, moving infrastructure use from a capital expense to an operational expense and cutting the overall cost by at least 90 percent.

Of course, one must question the validity of these assertions and, crucially, understand the assumptions and implementations of the examples to really grasp whether cloud computing can deliver on the hype. And hype is the right word. I had coffee recently with a "sell-side" financial analyst (i.e., he analyzes stocks with an eye as to whether they are appropriate investments); he told me that, in his estimation, cloud computing had already reached the silly season, with every product under the sun being branded as a cloud offering.

Nevertheless, there was evidence of tremendous payoff from cloud computing at the Symposium.

The Symposium kicked off with an overview presentation by James Staten of Forrester Research. He noted that cloud computing is today being applied very inconsistently, which is to say that startups have embraced cloud computing, particularly Amazon's EC2 and S3 services, while enterprises have not yet begun to adopt cloud computing to any extent. He did note that one place cloud computing will be adopted in enterprises is by end user organizations in an effort to bypass IT organizations seen as expensive and unresponsive.

Staten identified these four types of cloud computing users and the driving reasons for their use of the cloud:

  • Startups (cheap infrastructure, low investment)
  • Entertainment (highly scalable, temporary systems; think movie promotional campaigns)
  • Small businesses (similar motives to startups)
  • Enterprises (quick and cheap experimentation)

Interestingly, he pooh-poohed one trend forecast as being high-potential for clouds: internal clouds. Essentially, he believes that enterprises cannot create internal clouds that will be cost competitive with external clouds and therefore will ultimately fail. However, he forecast a bright future for virtual private clouds (akin to VPNs) which will carve out sections of a public cloud and provide cloud services overlaid with enterprise-appropriate security, namespace, and isolation.

So what is the big deal about clouds? Why all the excitement?

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