The State of Cloud Computing: Getting Real in 2012

By Chris Talbot  |  Print this article Print

While the hype around cloud computing was in full swing in 2010 and businesses stuck their toes in the water in 2011, this year looks like the one where cloud computing will become real at more companies. Here's a look.

The hype around cloud computing may have really taken off in 2010 (could you even go to an airport without seeing an advertisement for the cloud?), but vendor marketing was ahead of market adoption. With concerns around security, accessibility and unexpected downtime (crashes like the one at Amazon EC3 continued to be news well into 2011), as well as the big question of whether to adopt public or private cloud infrastructures and integrate it with existing systems, businesses were cautious to adopt what was seen as a new way of doing IT. In 2011, though, there was a big uptake in cloud computing models in all sizes of companies – an uptake that is likely to continue into 2012 and beyond.

According to Jeffrey M. Kaplan, founder and managing director of THINKstrategies, there is no doubt that cloud computing took off this year in both the business and consumer markets. Consumer initiatives like Apple’s iCloud helped to popularize the idea of cloud, and big infrastructure vendors like Cisco Systems and HP (as well as many others, big and small) solidified their own solutions portfolios and certification programs to help drive more sales and deployment of private and public cloud offerings.

Although there is still confusion in the market about what exactly is cloud computing (a common trend in 2010, but less so through 2011), most companies are now in agreement that it’s a trend that’s here to stay, Kaplan said. Cloud computing offers an intriguing alternative, and early adopters showed this year that they have gained quick, tangible and measurable business benefits by moving some or all of their applications to the cloud.

"The more we hear about those success stories, the more it fuels interest and adoption of the broader array of cloud services," Kaplan said.

Many businesses are still in pilot phases when it comes to the cloud, and it’s not unheard of for individual departments to go rogue to speed up the process of getting services up and running more quickly than traditional IT departments may be capable of. Such end-users are proving the need for the cloud, and IT departments are being forced to cope with the fact that they’re not the only provider in their organizations any more.

As IT and business units come into alignment on cloud initiatives, the most popular cloud services are beginning to change. When cloud first became popularized, the top cloud services were human resources and email, said Michelle Warren, president of MW Research & Consulting. Top cloud applications are becoming harder to identify because everything has moved to the cloud. Although established businesses with plenty of traditional IT deployments may be slower to move everything to the cloud, the smaller and more agile startups are now able to run every type of business application in the cloud.

The default standard, however, is the hybrid cloud, and both Kaplan and Warren said hybrid cloud infrastructures, which integration both private, public and traditional IT systems, are the present and the future of cloud computing deployments. Much of the reason for that is the traditional IT investments that have been made over the years, but there is still some concern over putting mission-critical applications in the cloud.

"Initially, it was companies like Amazon offering the public cloud, and then there were large organizations that wanted enhanced security features, so they created private clouds. Both are useful in their various respects. Private tends to be much more expensive because they have to set up data centers and have the management software and virtualization and hypervisors," Warren said. "They have to make those decisions. It can be quite cost-prohibitive. As cloud technology advances and becomes a little bit less expensive, some companies will have a private cloud and they’ll keep some applications in the private cloud and they’ll put others out on the public cloud."

Private cloud costs are diminishing, which is making them more accessible to businesses, she said.

The consumerization of IT and the bring-your-own-device (BYOD) phenomena have also had a hand in driving the adoption of cloud computing in business organizations, Kaplan said. Mobility, in particular the adoption of tablets, is helping to drive cloud adoption, and there’s a certain amount of viral marketing starting from consumers and moving up through the ranks of their employers, who are starting to see the benefits of cloud computing.

"That more organic bottom-up process has actually helped to increase the success rate," Kaplan said.

Warren noted that there’s a strong expectation that a lot of people will be getting tablets for Christmas and that those tablets will end up in the enterprise on January 3, 2012. End-users will expect to be able to use the new toys they received from Santa to do things like check email and pull down files from the corporate servers. If all goes as expected, IT departments will require a few Aspirin early in the new year, but the cloud can make things easier.

A key question around cloud in 2010 was related to how secure the technology was. Through 2010, security concerns kept many businesses from adopting cloud, and although security concerns never really go away, the worry over cloud security has been reduced considerably. It doesn’t appear to be an inhibitor to adoption any more. Vendors and cloud service providers made it a priority and relieved many of those concerns.

"They’ve done a very good job of safeguarding people’s data, and while there may have been a case or two where there was some question of policy issues around proper protection from a usage standpoint, the cloud industry has done a good enough job that the security issue is not as acute as it once was. It’s subsided as a major concern," Kaplan said.

Naturally, any smart customer is going to ask what security is offered and what protections are in place of any cloud provider or service, but the security of the cloud in general is no longer an issue of debate, he said.

The larger debate now is what type of cloud is best and how it will tie into legacy systems and software resources, Kaplan said. The integration of cloud with existing IT investments is a top-of-mind priority now.

When the hype around cloud computing first began, it appeared that public cloud would be dominant, but as more security and advanced features were demanded, private cloud caught up. Some businesses have opted for the community cloud, which Kaplan defined as a shared cloud resource. However, the future of the cloud is expected to be a hybrid, which is a blend of traditional IT in addition to public and/or private cloud offerings. It’s the best choice for businesses, he said.

"In 99% of the cases, unless you’re a startup greenfield situation, you’re probably already going to have some systems and software in place that are relatively stable and inexpensive to keep running," Kaplan said. There’s no sense in ripping out existing, functional and cost-effective IT systems to replace with something new, whether it’s cloud or not.

Warren agreed, calling hybrid a natural migration for businesses.

"I think the future’s hybrid, for sure, because not everybody is going to want a public cloud, not everybody is going to want a private cloud," she said.

For the channel, the cloud has provided a source of opportunity as well as a point of tension between partners and vendors. There are plenty of opportunities for all elements of the channel, even in the face of possible competition and conflict with vendors (many of which made efforts to reduce or eliminate such conflicts in 2011).

"There’s a lot of debate going on right now. The channel can provide services and actual set up the database if it’s a private cloud. The channel can be involved in setting that up. And if they look to public or private, then they’re looking to managing the data, accessing and securing it so they can provide managed services," Warren said. In many cases, it’s better for businesses to outsource their cloud deployment and management to the channel because of the complexities involved (and when doesn’t IT get more complicated?).

Kaplan pointed to Cisco’s latest announcements regarding CloudVision as one illustration of what’s happening in the market and how it affects the channel. Both Cisco and HP solidified their cloud strategies and partner initiatives this year. Even Salesforce.com started talking about how it would work with the traditional channels to increase its business.

That doesn’t make channel conflicts go away, but Kaplan was optimistic that the cloud rules of engagement would become clearer in 2012. The industry is indeed changing, and it’s not only the vendors that need to change to capitalize on the new opportunities being presented. Channel partners find they have to modify their own businesses to best take advantage of the new world of the cloud.