Moving to the Cloud: Adoption, Impact, and What's Next

We examine the risks, challenges, and benefits of the cloud and where the technology is headed.

Clouds -- private, public, and hybrids -- have captured IT's attention. Saving data center costs is always attractive, but the technology isn't without risks. What do you need to know before you move to the cloud, and how with the technology impact your own data center? Where is the cloud headed?

For perspective we turned to Pete Manca, CEO of Egenera, a company that specializes in helping enterprises move to the cloud.

Enterprise Strategies: We all know companies are moving to the cloud to save capital and operating expenses and relieve stress of their own data centers. What requirements are overlooked by this singular focus?

Pete Manca: One of the first things to look at when defining the cloud and knowing the requirements is understanding the characteristics of a cloud. According to NIST (National Institute of Standards and Technology), the key components of cloud computing are on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service.

Although there are many points of differentiation in clouds -- everything from ease of use/provisioning to size of the cloud from level of customer service to pricing and service level agreements (which boil down to availability and response time) -- what they all have in common is that they are built on virtual infrastructure. This can be CPU and memory resources but also the storage and networking and associated services.

One of the key things to keep in mind is that the foundation of any cloud computing stack is the Infrastructure layer, which must be architected and implemented properly to support service-level expectations. This infrastructure must be reliable, flexible, and self-healing if the cloud service is to meet service-level expectations.

What are some of the risks and challenges enterprises must be aware of when moving to the cloud?

Cloud discussions tend to focus heavily on the challenges, especially as a lot of organizations take the first step to implement cloud projects. They want to know what they are getting into. One of the major challenges we see to the many organizations moving mission-critical applications to the cloud is ensuring reliable delivery and quality of the provided service. As cloud (whether IaaS or SaaS) looks to become the next enterprise computing platform, quality of service will definitely be a huge area of focus.

Customers should only care about 1) cost of their service and 2) the level of service or performance the system is delivering from the perspective of the end user. In this way, the crucial metrics of cloud are availability, capacity, and response time. When accessing the risks, these three metrics are what is most important to consider when moving to the cloud.

What services does an enterprise need when moving to the cloud?

No matter what type of cloud environment you are considering -- whether public, hosted private, or an on-premise private cloud -- success depends on having the right technology foundation in place. Although much of the market has been focusing on the virtualization layer of the cloud, the success of any cloud implementation is built from the ground up. The infrastructure layers must be architected and implemented properly to support service-level expectations. If this layer is built on technology that is itself not inherently flexible or tolerant of failure, the cloud deployment will not achieve expectations.

What impact does moving to the cloud have on one's own data center?

The cloud has provided immeasurable opportunities for all types of organizations, but it will also have a large impact on the data center. In a recent report, Gartner predicted that by 2018, data center space requirements will be only 40 percent of what they are today. The focus of data centers will be on core services, which will continue to demand more IT resources. Also, with offloading services to the cloud, ownership and management of IT assets will shift to the provider.

The cloud affects almost every industry from health care to financial services. What industries do you see as paving the way for cloud adoption?

The cloud is definitely touching every industry. We see financial institutions using more private clouds, hospitals going more mobile, and virtual and even the government transitioning to cloud. Most recently, the U.S. General Services Administration (GSA) announced in June a new security program that will help to streamline the path for agencies moving to the cloud and accelerate adoption.

We see health care as the industry with the most growth potential. Although regulatory and security concerns have held back the industry from the adoption of public clouds, a recent report by research firm MarketsandMarkets found the overall cloud computing market in health care will grow to $5.4 billion by 2017. Even though the public cloud is hindered by electronic health record guidelines and HIPAA, we see private clouds and hybrid models in health care poised for growth.

What are you seeing in terms of adoption rates of hybrid, public, or private clouds? Are hybrid clouds the future, and why?

It's interesting because it seems everyone is talking about wanting to implement some kind of hybrid cloud, but very few customers are actually implementing this today.

The desire to do so stems from the need to utilize public clouds for testing/development and non-mission-critical applications, and private clouds for mission-critical or non-virtualized applications. The issue holding most customers back is their fear about security and the lack of some critical technology -- mostly on the networking and storage side, though the lack of bare-metal clouds is also a barrier because not all applications are virtualized.

On the networking side, there is a need for a single, secure network that flows from inside the enterprise and back. AT&T, Verizon, and others are now starting to deliver virtual private networks and physical networks that can directly connect a customer to their clouds so the cloud resources look like an extension of their networks.

Finally, regarding bare metal, the current clouds just can't deal with apps that customers don't want to virtualize. All clouds are virtual today, so either your app fits in to a virtual container or it doesn't. If not, you aren't cloud eligible. I don't believe that this should be the case and see many applications that customers would like to impart with cloud characteristics. Because of this, I believe these issues will get resolved rather quickly.

We have IaaS, PaaS, and SaaS. What's next for cloud or is this the extent of cloud services?

Not even close.We are only at the beginning of a very large explosion in "as-a-service" offerings. Like any naturally evolving market, there will be new categories, segments, and niches carved out. Some of these will be net new while others will cannibalize existing markets (perhaps even other cloud segments).

For example, in terms of net new categories, look no further then mobile. With the explosion of mobile computing being support by so many companies with BYOD initiatives, there is tremendous demand for infrastructure to develop for, support, secure, and supply services to all these devices. Organizations face a rent-versus-buy decision. As a result, new cloud segments such as Backend-as-a-Service (BaaS) are springing up.

Many of our customers are also struggling with how to cloud-enable their mission-critical applications. Many of these apps, for performance, security or even licensing reasons, aren't supported in a virtual environment. This creates an opportunity for the emergence of Metal-as-a-Service (MaaS) offerings. Although a good thing for the industry and for the customer, it does reduce the opportunity for IaaS offerings because the vast majority of these are built on the assumption that all resources will be virtualized. As the market continues to evolve, it is clear that many new cloud services will spring up to fill a certain need.

It seems that everything is now "software defined." How does Egenera fit into this trend?

As a concept, the SDDC has been floating around under different names for over a decade and is nothing new -- the vision for IT has always been laser-focused on reducing complexity and accelerating the delivery of services.

However, in the real world, the data center is a diverse and heterogeneous place. Some applications will always remain on bare metal hardware for performance, sizing, or licensing reasons. For applications well suited to virtualization, the cloud has become a kaleidoscope running many different hypervisors. To use the SDDC to provide and manage a cloud offering, you need a solution that can manage both physical and virtual along with the network and storage.

Egenera is focused on orchestrating that diverse and software-defined data center. We don't care whether infrastructure is physical, virtual, or a mix. With the PAN software suite, Egenera delivers cloud-like characteristics to virtual machines or to physical hardware. With that elasticity, we can "orchestrate" or apply policy across all data center stovepipes to ensure organizations have the means to quickly define new business services, consume IT and ultimately best match their application and IT needs with their budget and service-level requirements.

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