Cloud Computing: Hype Versus Reality

Five consumer and business trends will accelerate the use of cloud computing, which offers companies a simplified, centralized platform for use when needed, lowering costs and energy use. This guide will dispel the myths and show its real benefits.

Comments (3)By Willy Chiu, vice president, high-performance computing, IBM Software Group

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FRI, JULY 18, 2008CIOCloud computing may seemmore hype than realityas the technology industry is busy refining the term. However, substantive business and market trends are catapulting cloud computing to the forefront. Companies and governments areusing this emerging concept in the real world, and its uses are growing.

Basically, cloud computing is an approach to a shared IT infrastructure in which large pools of computer systems are linked together to provide IT services. Since it accesses "virtual" resources, cloud computing is not limited by the power and capabilities of local or remote computers. It is the next generation of enterprise data centers, which operate like the Internet, providing extreme scale and fast access to networked users.Cloud computing offers a simplified, centralized platform for use when needed, lowering costs and energy use. Unlikegrid computing, which distributes IT for a specific task, cloud computing is used across an entire range of activities. The platforms getting the most media attention are externally hosted services, but others are used inside companies, especially those operating globally.

Over the next three to five years, cloud computing will evolve and gain wider use as five major consumer and business trends accelerate.

1. The Web as a Participatory Worldwide Communications Media

Today the Web is used to exchange, contribute and work with information. No longer static as in earlier years, Web content is transformed every day by users around the world.Wikipedia,FacebookandYouTubeare prominent examples but are the tip of the iceberg. Social networking, streaming audio and video, and other collaborative tools are rapidly growing behind the firewalls of company intranets. Knowledge workers, especially those working in research and development, use Web applications to collaborate on work projects across the globe.

China Telecom and Sogeti, a European professional services firm, use internal cloud computing platforms to conduct online, real-time brainstorming sessions among their workers. The high-performance platform is able to collect input from 18,000 Sogeti employees, and sort and analyze it for business use.

Interactive, real-time communications, known as Web 2.0, are a major impetus for cloud computing, which meets the high-performance demands of the dynamic Web by processing massive amounts of information in a fraction of a second, using existing infrastructures.

2. The Need to Use Less Energy

The goal to reduce the energy used by IT gains traction daily as costs and concerns over carbon emissions increase. Cloud computing uses IT resources more efficiently, reducing the amount of power needed to run data centers. Excess computing power is put to use, rather than being powered on, using energy, but remaining idle. According to Info-Tech Research Group, most computer servers run full time, but are used at 10 percent to 20 percent of capacity. By pooling resources, cloud-computing platforms scale up or down, saving energy and operating costs.

3. Innovation Imperative

In a global economy,the quest to be more innovative, to get new ideas to market faster and to use technology to speed up results is a major driver of cloud computing, which offers robust computer power, at lower cost, when and wherever it is needed.

At a Wuxi, China, industrial park, tenants, mostly startup software companies, are able to access an entire IT infrastructure by plugging in their computers. The industrial park worked withIBM to create a cloud-computing center, which it hosts for its tenants. IT is part of the industrial park's infrastructure, along with heat, lights and water. For software startups, this means lower costs in developing products. They avoid buying and operating their own servers, applications or tools and pay only for the IT services they actually use. Vietnam National University recently established a cloud-computing platform to build IT skills among its workforce more quickly.

4. Quest for Simplicity

Although technology grows more sophisticated, users expect it to remain simple to use. The market success of delivering software as a service over the Internet is an example of the trend toward simplicity. It is also a precursor of cloud computing. By purchasing a service rather than buying software outright, a company uses up-to-date software without the complexities and costs of managing or upgrading it.

Cloud computing brings similar simplicity to the entire range of IT. Some cloud-computing platforms will be hosted externally and purchased as a service. This is appealing for smaller firms that have limited technical staffs. However,many companies, especially larger firms, are likely to opt for internal platforms, especially in industries, such as finance, with security and privacy issues.5. Structure Out of Chaos

The Web enables fast access to an immense quantity of information, but sorting it is a challenge. The success of search technologies, such asGoogle, attests to the need for order and structure as information expands faster than the human mind can assimilate. Google has more than 141 million visitors per month to its search site in the U.S.

Every day huge numbers of Internet users contribute data, pictures, audio and blogs to websites around the world. Without the ability to find the data users need, fast and accurately, the Web's value as a productivity tool could begin to wane.

Cloud computing is tailor-made for bringing order out of chaos. It offers the ability to integrate widely diverse kinds of information, more computing power for handling massive amounts of data, and a simpler infrastructure to manage complexity.

As an emerging technology, cloud computing will transform over time. Its real value is its ability to respond to major business and market trends that will remain in our technology landscape for years to come.

Willy Chiu is vice president of high-performance computing at theIBM Software Group.1