Last week I wrote about how Google and "the cloud" seem to be synonymous due to the bevy of highly visible applications available by the company that are typically free for non-business use. I wanted to explore the topic a bit further, so I had an e-chat with Gabrielle Smith, VP of Enterprise Sales at LTech, a Google Applications Premier Edition (GAPE) reseller.
Me: Cloud computing has always been a term that, in my opinion, has never had a concrete definition. Can you provide a definition?
Gabrielle: I'm stealing this from NIST who defines it in the following way:
"Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three delivery models, and four deployment models."
Me: I realize that I'm greatly simplifying it but that definition essentially says that cloud computing is the ability to run your application on a bunch of computers without having to own a bunch of computers first. This isn't an Earth-shattering concept, nor is it new. Larry Ellison proposed proposed something similar with the Network Computer in 1999 and Marc Andreessen had LoudCloud in 2001. So what makes cloud computing now, as a reality, different?
Gabrielle: I think the biggest driver today for the adoption of SaaS and cloud strategy is evolution of hardware. We have gotten to a point where the processing power of hardware and data storage capability can scale with limited disruption. Ten years ago, the same was not true.
The concept of the cloud has been around for many years, even prior to 1999, but the technology that was necessary to support its success was not available yet. In my opinion, the adoption of cloud computing is truly being driven by cost due to the struggling economy. Companies are being forced to rethink current policies and strategies. Every company is under scrutiny to be cutting costs and reducing expenditures. Leveraging the economies of scale in the cloud for basic functionality and enhanced features is a win for these companies.
Currently, this is a perfect storm of sorts. The economy is driving for lower cost options; big name providers like Amazon, Google, IBM and Microsoft have built out secure infrastructures and tested them for long periods of time; and the technology and processing power has caught up to the market demand.
Me: You mentioned Cloud Computing and SaaS there. Would you say that the two are synonymous?
Gabrielle: No. SaaS can mean various things. I have seen hosting vendors market as a SaaS organization. I think to truly consider something as cloud based it needs to be leveraging large scalable infrastructure. Although both offerings in essence provide users the ability to access applications, I think the definitions are still too loosely defined to agree they are one in the same.
Me: Does the fact that the software runs in the cloud limit what functionality it can provide since it has to run in a web browser?
Gabrielle: Quite the opposite. Software running in the cloud gives the user a greater amount of efficiency and flexibility. For example, John Smith CEO of ABC Company is traveling to India for a meeting with a large investor. His laptop crashes on the trip over. Under a traditional software model, John is out of luck and would require a new preloaded/configured machine shipped to him. Under the SaaS model, all of John's information is located on any computer that can afford him access to the internet.
From a functionality standpoint, many users are going to see increased functionality as cloud based technology allows for instantaneous upgrades to be rolled out with little disruption. Google Apps adds features to its solution roughly every 2 weeks. Since all of the information is accessed through a web browser, users also have the ability to collaborate in real time and maintain various versions of documents.
Me: What about the competitive landscape with “traditional” software companies (ISVs)? One would think that either they have to lower their prices, offer “lite” versions of their products, or try to differentiate themselves based on features and functionality in order to win deals vs. a cloud computing-based offering.
Gabrielle: I would agree with this. Niche software will most likely remain as premise based or traditional for a while still, but contextual applications like e-mail, office systems and collaboration tools will most likely all have to be available in a "lite" or cloud version in order to be competitive. The cost comparison currently for cloud based applications vs. traditional software apps is over 60% lower.
Me: Won't there be challenges doing that? For example, I’ve seen companies who already had “traditional” software consider converting to the functional equivalents in the cloud. Yet, time and time again, there seems to be a large degree of inertia due to the data migration effort, fear that some feature(s) will not be supported, etc.
Gabrielle: The decision of companies to migrate over to cloud based technology is becoming more and more the norm. Although there are still areas within most organizations where high-end functionality is necessary - finance for example that requires use of pivot tables and linked data sources - 95% of end users within an organization are fully supported by cloud based applications such as Google Apps.
In looking at the most common migration path of enterprise customers, they will leverage the cloud computing utility model for applications like e-mail and collaboration first. As they become more comfortable with the security of the cloud and what the other applications have to offer, they slowly move off traditional software.
For example, a large enterprise that is looking to leverage the cloud yet still have offline document functionality and high-end use of applications can utilize Open Office (free) and Google Apps. This gives them the cost savings thy are looking for and no loss in functionality. Many of the cloud technologies are "open" format which allows them to play nicely with all applications, premise based or otherwise. The data migration when done correctly becomes a seamless transition and then allows users to choose how they want to work and which platform suits them best for the task at hand.
Me: So this seems to be a win-win, but I can hardly believe that the benefits of cloud computing are ubiquitous. Are there areas is which cloud computing not applicable? I can imagine areas like High Performance Computing (HPC) wouldn’t benefit. Are there other, more highly visible swaths of the market place where cloud computing will not have any penetration?
Gabrielle: As cloud computing becomes more and more mature, I don't think there are any organizations that will not benefit from this to some extent. Based on the specific requirements of business, some organizations may be able to leverage the cloud more than others. For example, some more regulated areas like healthcare and finance may choose to have a split model. They would leverage cloud technology for e-mail and collaboration, but may choose to handle document storage on-site for records protection purposes.
Although many of the cloud providers today offer SAS 70 Type II compliance and multiple levels of data and privacy protection within their contracts, certain industries with more stringent requirments on data storage may opt out for the short term. In the long run, however, I feel that we will see the cloud as the wave of the technological future. It allows for low cost alternative and full fail-over as well as truly operating within the world of "business anywhere."
Me: Thanks for taking the time to help me understand this topic better.
Gabrielle: You're welcome.
Me: Cloud computing has always been a term that, in my opinion, has never had a concrete definition. Can you provide a definition?
Gabrielle: I'm stealing this from NIST who defines it in the following way:"Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three delivery models, and four deployment models."
Me: I realize that I'm greatly simplifying it but that definition essentially says that cloud computing is the ability to run your application on a bunch of computers without having to own a bunch of computers first. This isn't an Earth-shattering concept, nor is it new. Larry Ellison proposed proposed something similar with the Network Computer in 1999 and Marc Andreessen had LoudCloud in 2001. So what makes cloud computing now, as a reality, different?
Gabrielle: I think the biggest driver today for the adoption of SaaS and cloud strategy is evolution of hardware. We have gotten to a point where the processing power of hardware and data storage capability can scale with limited disruption. Ten years ago, the same was not true.
The concept of the cloud has been around for many years, even prior to 1999, but the technology that was necessary to support its success was not available yet. In my opinion, the adoption of cloud computing is truly being driven by cost due to the struggling economy. Companies are being forced to rethink current policies and strategies. Every company is under scrutiny to be cutting costs and reducing expenditures. Leveraging the economies of scale in the cloud for basic functionality and enhanced features is a win for these companies.
Currently, this is a perfect storm of sorts. The economy is driving for lower cost options; big name providers like Amazon, Google, IBM and Microsoft have built out secure infrastructures and tested them for long periods of time; and the technology and processing power has caught up to the market demand.
Me: You mentioned Cloud Computing and SaaS there. Would you say that the two are synonymous?
Gabrielle: No. SaaS can mean various things. I have seen hosting vendors market as a SaaS organization. I think to truly consider something as cloud based it needs to be leveraging large scalable infrastructure. Although both offerings in essence provide users the ability to access applications, I think the definitions are still too loosely defined to agree they are one in the same.
Me: Does the fact that the software runs in the cloud limit what functionality it can provide since it has to run in a web browser?
Gabrielle: Quite the opposite. Software running in the cloud gives the user a greater amount of efficiency and flexibility. For example, John Smith CEO of ABC Company is traveling to India for a meeting with a large investor. His laptop crashes on the trip over. Under a traditional software model, John is out of luck and would require a new preloaded/configured machine shipped to him. Under the SaaS model, all of John's information is located on any computer that can afford him access to the internet.
From a functionality standpoint, many users are going to see increased functionality as cloud based technology allows for instantaneous upgrades to be rolled out with little disruption. Google Apps adds features to its solution roughly every 2 weeks. Since all of the information is accessed through a web browser, users also have the ability to collaborate in real time and maintain various versions of documents.
Me: What about the competitive landscape with “traditional” software companies (ISVs)? One would think that either they have to lower their prices, offer “lite” versions of their products, or try to differentiate themselves based on features and functionality in order to win deals vs. a cloud computing-based offering.
Gabrielle: I would agree with this. Niche software will most likely remain as premise based or traditional for a while still, but contextual applications like e-mail, office systems and collaboration tools will most likely all have to be available in a "lite" or cloud version in order to be competitive. The cost comparison currently for cloud based applications vs. traditional software apps is over 60% lower.
Me: Won't there be challenges doing that? For example, I’ve seen companies who already had “traditional” software consider converting to the functional equivalents in the cloud. Yet, time and time again, there seems to be a large degree of inertia due to the data migration effort, fear that some feature(s) will not be supported, etc.
Gabrielle: The decision of companies to migrate over to cloud based technology is becoming more and more the norm. Although there are still areas within most organizations where high-end functionality is necessary - finance for example that requires use of pivot tables and linked data sources - 95% of end users within an organization are fully supported by cloud based applications such as Google Apps.
In looking at the most common migration path of enterprise customers, they will leverage the cloud computing utility model for applications like e-mail and collaboration first. As they become more comfortable with the security of the cloud and what the other applications have to offer, they slowly move off traditional software.
For example, a large enterprise that is looking to leverage the cloud yet still have offline document functionality and high-end use of applications can utilize Open Office (free) and Google Apps. This gives them the cost savings thy are looking for and no loss in functionality. Many of the cloud technologies are "open" format which allows them to play nicely with all applications, premise based or otherwise. The data migration when done correctly becomes a seamless transition and then allows users to choose how they want to work and which platform suits them best for the task at hand.
Me: So this seems to be a win-win, but I can hardly believe that the benefits of cloud computing are ubiquitous. Are there areas is which cloud computing not applicable? I can imagine areas like High Performance Computing (HPC) wouldn’t benefit. Are there other, more highly visible swaths of the market place where cloud computing will not have any penetration?
Gabrielle: As cloud computing becomes more and more mature, I don't think there are any organizations that will not benefit from this to some extent. Based on the specific requirements of business, some organizations may be able to leverage the cloud more than others. For example, some more regulated areas like healthcare and finance may choose to have a split model. They would leverage cloud technology for e-mail and collaboration, but may choose to handle document storage on-site for records protection purposes.
Although many of the cloud providers today offer SAS 70 Type II compliance and multiple levels of data and privacy protection within their contracts, certain industries with more stringent requirments on data storage may opt out for the short term. In the long run, however, I feel that we will see the cloud as the wave of the technological future. It allows for low cost alternative and full fail-over as well as truly operating within the world of "business anywhere."
Me: Thanks for taking the time to help me understand this topic better.
Gabrielle: You're welcome.