Thursday, April 23, 2009

Cloud Computing: From Custom-build via COTS to SaaS

A decade or two ago, we built all of our applications ourselves (well, except some generic products like WordPerfect). Common practice in most organizations nowadays is to first look for Commercial of the Shelf Software (COTS) before building an own solution.

But the weather is getting "cloudy" these days, and a storm is ahead.

With the maturity of the Internet a third branch is emerging on the decision-tree. Is the solution available as SaaS? Yes, do it. If not, is the solution available as COTS? Yes, do it. If not, build it yourself. And after you've built it, deploy it in the cloud.

The facts

Oracle has acquired SUN to get into the data center business. Microsoft and Google and others invest huge amounts of money to build data centers all over the world. Amazon offers virtual desktops (EC2) at a few cents per hour -and you only pay when you are logged in. Linxter offers an ESB in the cloud, Microsoft calls it the Internet Service Bus. Microsoft also offers Windows-in-the-cloud (Azure). Google offers rich email services to companies with (an ever growing) 7 GB storage at the price of one and a half cup of coffee a month. Salesforce offers business functionality at rates interesting enough to be taken seriously, no investments needed. Since the early days of the Internet suppliers offer storage in the cloud and their prices are decreasing. BPM is offered in the cloud to click together you business processes based on SaaS and your own local applications and services, using a Service Bus in the cloud and/or your own to route the messages around.

Virtualization to share resources not at an enterprise level, but at a global level decreases costs with a magnitude beyond any imagination. Pay-as-you-go and fast-scale models will make any investment and so any business case in your organization superfluous.

Identity services based on OpenID authenticate users in the cloud. In combination with secure federated provisioning services and legal certifications of cloud services providers, adequate levels of security are guaranteed.

In the short term emotions ("This is not secure enough for us... We have different needs then other companies... It's not flexible...") will be the main speed limiter, but eventually rationalism will win: do things ourselves in-house against huge costs, let things do dedicated for us by a provider in the cloud against high costs, or make use of multi-tenant and virtualized solutions with globally shared resources at extremely low costs.

Now is the time for organizations to establish a vision and policies and be prepared. Retink the role of the IT-department because things will change, soon, fast and overwhelming. If you as an IT-department don't, the business units will. Because most of what the enterprise's IT-department offers will be offered in the cloud as well, very fast, very scalable, very cheap, and instantly available to everyone. No company-WAN is needed; a cheap ADSL- or cable-access point will sufice to connect the business unit's LAN to the cloud. Be prepared!!


Mark Griffin said...

Good stuff, this part - "
In the short term emotions ("This is not secure enough for us... We have different needs then other companies... It's not flexible...") will be the main speed limiter, but eventually rationalism will win: do things ourselves in-house against huge costs"

is the real kicker in my mind. It's going to take some time to win over the masses. Early adopters will jump in for sure but the mainstream, correct about the emotion part, will take time.

Sold on SaaS said...

Wonderful article. The IT department has slowly started experiencing decreasing relevance in organizations. From creators of solutions, to implementors and maintainers, to only technology decision makers. maybe not even that in the future, as software service providers increasingly start talking in business language.

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Madison said...

Informative post on Cloud Computing. Cloud Computing Technology is really the best one. I got a good chance to gather information's about the Cloud Computing and its services through Cloudslam09 conference which is the 1st annual and virtual event covering latest innovations and trends of Cloud Computing. I am very much proud to be in the part of the conference.

Robert Werz said...

Over the past few months, Amazon has greatly improved their EC2 virtual desktop, including better and more secure connections, in effect, making the data transfer more secure.

It's easy to see that more and more companies will invest in this technology because of its affordable rates and flexibility. And as Mark Griffin pointed out, those short-term emotions will eventually diminish.