Business Tech

information technology is expected to play an important part in the global economic recovery, according to a new survey released Wednesday.

Some 72 percent of business and information technology executives say their "organizations place greater value on the IT function today than they did before the economic crisis" and that they "view IT as an important part of their economic recovery efforts," according to Accenture's Global Survey on IT Investments.

This is not an unfamiliar sentiment and is one we've heard from United States CIO Vivek Kundra as he's attempted to use IT to kick start a variety of programs on the federal level that will set the pace for innovative new uses of technology across the globe.

The results of the Accenture survey are similar to last week's Goldman Sachs cautiously optimistic survey results that suggested IT spending would trend upward in 2010 and normalize to pre-recession levels with the majority of countries represented planning to increase investment selectively next year.

2010 IT spending

(Credit: Accenture)

It's getting harder to focus on the vision of cloud computing these days. While there are still plenty of critical and complex problems to solve, and many, many implications of this disruptive operations model that have yet to be understood, the truth is that we've entered a new phase in the evolution of cloud adoption. Real work now exceeds theory when it comes to both new online content and work produced.

This kind of snuck up on me, but it shouldn't have. I myself witnessed many of the early events that greased the skids for real cloud success: the introduction of revolutionary products from Salesforce.com and Amazon Web Services; great blogs that discussed practical applications of early cloud environments, followed by books that explained step-by-step what should be considered in application architectures destined for the cloud.

The rapid adoption of "software as a service"-style offerings from the likes of Salesforce.com, Google, Zoho, and a wide variety of others in both the consumer and business markets belied new computing options delivered at Internet scale.

However, what really made me aware of the changing cloud buzz is what's happening in the software development space. I was shaken awake by Microsoft's brilliant launch of its Azure cloud service. I loved almost everything about how Ray Ozzie and crew positioned and discussed Azure's services to its target market: developers of the next generation of business applications.

The recent (re)unveiling at Microsoft's Professional Developers Conference in Los Angeles included an impressive array of services, customer testimonials, and partner announcements. If it had stopped at that, I would have assumed it was just "Mister Softy's" massive marketing machine in action.

However, I began following the "#azure" tag on Twitter from that day forward, and I've been blown away by the amount of content being generated by developers for developers. For example, this step-by-step guide to installing SQL Server on Azure. Or, how about this list of sessions from PDC from a variety of vendor and customer presenters, covering topics ranging from development basics to "making sense out of ambient data".

But it's not just Microsoft. Other cloud platform and infrastructure service vendors are building significant volume. Ruby on Rails platform service vendor Heroku reportedly hosts more than 40,000 applications now. At their Dreamforce conference in San Francisco, Salesforce.com mentioned they had approximately 135,000 applications running on their Force.com platform. (Of course, the number of these respective applications that are generating revenue or even used on a regular basis was not disclosed. Still, these numbers are impressive.)

Amazon Web Services has seen tens of billions of objects stored in its S3 environment (64 billion as of August 2009), and reportedly has several hundred thousand instances running at any given time. Google App Engine doesn't seem to do much marketing, but anecdotal evidence suggests there is a large body of Web application developers running on both the Java and Python instances.

Development and test services, such as SkyTap and Soasta, are thriving. The cloud model really works well for the dynamic resource usage model of software engineering. In fact, it works so well that IBM is putting some real muscle into the game.

There is other evidence that cloud is seeping into mainstream IT thought. This year's Gartner Data Center conference has a "virtual track" dedicated to cloud computing and its impact on the data center. Several vendor conferences leaned heavily on cloud computing in the last year. Professional associations are getting into the act by considering the impact of the cloud on their respective best practices and standards.

There is growing evidence that new and existing independent software vendors and consultancies are finding the cloud to be fertile ground. Of course, that could be a double-edged sword, as some firms will try to use the cloud as leverage to pry their way into otherwise closed doors. However, real projects do exist, and there are signs that that opportunity is growing.

If you are wondering if cloud computing is a fad, the evidence to the contrary is all around you. I heartily recommend that you really listen to what is being said, understand how the cloud is being used, and seriously evaluate how this disruptive model will change your projects, your organization, and even your career. Clearly, there are many technologists who already have.

Cloud computing is luring more businesses with its promise of minimal maintenance and low costs. But are companies putting their data at risk?

A new, free report released Friday by the European Network and Information Security Agency (ENISA) outlines the benefits and potential pitfalls of cloud computing. Based on an ongoing survey, the 123-page report, "Cloud Computing: Benefits, Risks and Recommendations for Information Security" (PDF), also offers recommendations to businesses on how to minimize the risks of entrusing their data to a cloud provider.

The benefits of cloud computing as described by ENISA are clear. Business content and services are always available. Companies can reduce costs by not overspending on the capacity of their own data centers. They can also scale up or down, depending on the services they use, and pay for those services only as needed. Internal IT is freed up by not having to implement or maintain certain hardware or software.

As more businesses hop onto the cloud, IDC expects worldwide spending on cloud services to hit $17.4 billion, revving up to $44.2 billion by 2013.

But cloud computing poses certain key risks.

"The picture we got back from the survey was clear," Giles Hogben, editor of the ENISA report, said in a statement. "The business case for cloud computing is obvious--it's computing on tap, available instantly, commitment-free and on-demand. But the number one issue holding many people back is security--how can I know if it's safe to trust the cloud provider with my data and in some cases my entire business infrastructure?"

Though cloud-service providers promise 24-by-7 availability, their data centers can go down. Security is out of the hands of the customer, who must place trust in the service provider. Customers become dependent on a single provider and may face challenges if data and services need to be migrated to a different provider. By entrusting data to the cloud, companies could face risks and challenges from regulatory audits. Further, some cloud providers may not fully and properly delete data even if a customer requests it.

In its report, ENISA outlines measures companies can take when dealing with cloud-service providers.

Companies must perform risk assessments, comparing the potential risks of storing data in the cloud with keeping files in an internal data center. Companies must also compare different cloud providers to narrow the list and then obtain service-level assurances from selected providers. Further, customers should clearly specify which services and tasks will be handled by internal IT and which by the cloud provider.

The report includes a checklist and detailed questions that customers can use when shopping for a cloud provider.

With the right provider, data can be safe and secure in the cloud. In fact, security with a cloud provider can be even more robust, flexible, and quicker to implement than when done internally. ENISA Executive Director Udo Helmbrecht noted in a statement: "The scale and flexibility of cloud computing gives the providers a security edge. For example, providers can instantly call on extra defensive resources like filtering and re-routing. They can also roll out new security patches more efficiently and keep more comprehensive evidence for diagnostics."

The Federal Aviation Administration says a glitch in its computer system that caused widespread flight cancellations and delays nationwide Thursday has been fixed.

The FAA confirmed to CBS News that its main flight processing system is now back up and running, CBS News correspondent Nancy Cordes reports.

The problem was with the FAA's system that collects airlines' flight plans. It was the second time in 15 months that a glitch in the flight plan system caused delays.

The agency still requires some time to reboot its residual systems, but FAA officials told Cordes that flights should get back to normal fairly quickly.

Read more of "Computer Glitch Slows U.S. Air Travel" at CBSNews.com.

Intel on Monday disclosed a version of its Xeon processor line optimized for supercomputers and announced a partnership with NEC to develop future supercomputers.

At Supercomputing 2009 in Portland, Ore., Intel unveiled a future version of its "Nehalem-EX" processor optimized for supercomputers. The six-core chip will run at higher speeds than eight-core versions of the Nehalem-EX processors and will offer advantages for supercomputer specific tasks, Intel said in a statement. Intel also refers to supercomputing as high-performance computing, or HPC.

The chip architecture will offer greater memory speeds and capacity and will allow customers to build single computers or "nodes" with up to 256 such processors, according to Intel. This will be available next year, Intel said.

Intel said Monday that four out of every five supercomputers on the Top500 list published Monday are powered by Intel processors.

Intel also announced that it is partnering with Japan's NEC--that country's largest supercomputer vendor--to jointly develop technologies "that will push the boundaries of supercomputing performance," according to a joint statement.

NEC will use the technologies in future supercomputers based on the Intel Xeon processor and other technologies such as AVX (Advanced Vector Extensions), an extension to Intel's x86 instruction set architecture.

AVX will be used with Intel's upcoming Sandy Bridge microarchitecture due in 2011, according to Intel.

"With NEC further innovating on Intel Xeon processor-based systems, Intel is poised to bring Intel Xeon processor performance to an even wider supercomputing audience, " said Richard Dracott, general manager of Intel's High Performance Computing Group, in a statement.

Fumihiko Hisamitsu, general manager of HPC Division at NEC, said: "NEC's substantial experience in the development of vector processing systems...is a natural fit for taking Intel architecture further into new markets."

A vector processor design can perform operations on multiple data elements simultaneously. Intel Xeon chips are good at scalar processing, which handles one data item at a time.

The initial focus of the collaboration will be the development of technology to boost the memory speed and scalability--the latter refers to expanding a system to increase performance or capacity. "Such enhancements are intended to benefit systems targeting not only the very high end of the scientific computing market segment, but also to benefit smaller HPC installations," the two companies said.

NEC will also continue to sell its existing SX vector processor-based products. NEC, for example, currently markets the SX-9 supercomputer.

Cloud computing providers have a difficult marketing challenge, in my opinion. Think about it--no matter what service model or deployment model a provider is delivering, they must differentiate their service while meeting the "commodity" needs of as many customers as possible. It would seem these businesses are stuck between providing least common denominator service capabilities and being accused of intentional customer lock-in.

(Credit: Jake Shepherd/Flickr)

From a customer perspective, it is equally challenging when one is "looking for servers and storage" and must choose between a bunch of services that essentially run Linux or Windows and store your files. How does one choose? How do the cloud providers set themselves apart in the customers' eyes?

Unfortunately, I've been inundated of late by an increasing number of cloud service announcements that lack any sense of differentiation. Hosting providers are announcing "on-demand server capacity billed on a pay-as-you-go basis." Platform vendors are simply announcing what language they support, and how much they charge for services. Software-as-a-Service vendors have the easiest job to differentiate service, as they can do so based on functionality alone if they wish, but even there some vendors struggle to differentiate themselves by anything other than the fact they run as a cloud service.

This has to change. Forrester's James Staten is telling us that clients are getting "cloud weary." I believe a lot of this has to do with the ridiculousness of "cloudwashing" that we've seen for some products and services, and the relative monotony of pitches for things are arguably cloud services, especially in the IaaS space.

Below is a list of five key categories of competitive differentiation for cloud computing. It is not a complete list, nor do I think all vendors would look at this question in the same way. However, if you are looking to acquire cloud services, these are the elements I think you start with as you evaluate any service, be it SaaS, PaaS, or IaaS. If you are selling these services, consider this an outline for your next requirements document.

1. Ease of operations. Yeah, I could have kept things simple and just said "ease of use," but "use" in the cloud computing service sense is much more than how humans interact with the system. For instance, how does a company with hundreds of applications in the cloud strewn across a dozen or more vendors monitor and manage those applications to manageable service levels?

   And yes, phenomenal user interfaces will set some providers apart from others, but it will be the "behind the scenes" interfaces--such as APIs, publish and subscribe event streams, transparency and auditability systems, etc.--that will make the most significant differences between providers.

   Will many of the aspects of "ease of operations" be standardized? Sure. The Open Cloud Computing Interface (OCCI) is an example of an attempt to deal with a large part of this challenge. However, differentiation will still be possible through extensions, quality of features and--yes--some custom interfaces.

2. Configurability. One of the things about today's best-known cloud computing environments is that they are essentially infrastructure and software architecture frameworks that dictate a lot about the application architectures that can be built on them. For example, the Amazon Web Services Elastic Compute Cloud (EC2) allows each server to be on one widely shared network. No separation of management traffic from DMZ traffic here (at least not explicitly from the point of view of the OS).

   No, application architects are instead forced to consider how they would build and operate their application in the infrastructure architecture given them. Good books have been written with this in mind, but ultimately the complexity of the problems we wish to solve with information technology will dictate the amount of configurability we require from our infrastructure systems--even if they are delivered as a service by a third party.

   The low-hanging fruit here for IaaS vendors are things like network architectures, data storage options, server options and so on. Also useful here are services that enhance the infrastructure, like security systems, message queueing, and storage tiering.

3. Performance. One public relations contact I got recently was quite interesting. A hosting company sent me an email indicating that they have an increasing number of customers coming to them from AWS, and finding that their applications actually perform better in the former than the latter. I haven't confirmed the truth of that claim, but it is an interesting claim nonetheless.

   Processing speed, memory speed, storage access, read and write speeds, latency, bandwidth--these are all things that are tunable by the cloud provider, either through technology acquisition, or through superior engineering and operations expertise. And, as with servers and storage, the fastest speeds per dollar spent will generally win.

   I would not be surprised if we saw a cloud performance war, similar to the RDBMS benchmark wars, especially in the IaaS category (though it would make sense in the PaaS and SaaS categories as well).

4. Reliability and security. I debated combining these two elements, as they represent different aspects of the same concept. However, that core concept--risk mitigation--is at the heart of so much of the decision over whether public cloud services are better than private data centers, that I think they will often be viewed through the same lens.

   Companies will need time to demonstrate differentiation in both of these categories, but features can be introduced today to increase the transparency of both operations and security in any provider. Redundant distributed data stores, "early warning" DDoS detection events, auditability APIs; these are all features that would "open the kimono" in a controlled fashion and increase customer's ability to trust that their provider has made the protection and availability of their data and functionality a core competency.

5. Customer service. After I wrote my closing post for the "big rethink" series, Kevin Magee, COO of ZeroTouch IT, wrote a post in which he noted several additional predictions for the effect of cloud computing on IT. Most notably, he pointed out that cloud will change "[h]ow Vendor Relationship Management will become a key discipline in IT organizations." Amen, brother, and I completely agree.

   In a tongue-in-cheek post from early 2008, I noted that system administrators should "get good at waiting on hold for customer service representatives." In reality, there is truth to that, but the providers have a lot of room to craft that experience.

   One thing they can do is advance the technical leading edge in terms of customer self-service and operations transparency. (Hmm. Has anyone else noted how often 'transparancy' comes up in this discussion.) I noted some ideas about this in a previous post. Smart providers will find others.

Cloud computing is one of those truly disruptive market opportunities that makes or breaks companies. The winners will find ways to differntiate. Those that don't almost certainly can't win. So, please, no more press releases that fail to differentiate in any meaningful way.

AT&T has unveiled its latest cloud-based offering, which lets businesses grab more computing capacity when they need it.

The company announced on Monday its Synaptic Compute as a Service, designed to let IT staffers store and maintain internal applications and data via AT&T's cloud. Capacity and availability can be ramped up when needed, especially if a company's own data center resources become taxed, AT&T said.

The service is designed is to help businesses save money by not having to maintain full network capacity year-round if demand only shoots up during certain times of the year. AT&T said that businesses can seamlessly access the software and content they need, whether stored internally or out on AT&T's network cloud.

Synaptic Compute "provides a much-needed choice for IT executives who worry about over-building or under-investing in the capacity needed to handle their users' traffic demands," Roman Pacewicz, senior vice president of strategy and application services for AT&T Business Solutions, said in a statement.

AT&T plans to introduce the service before year's end. Initially, it will be available only in the U.S.

Though cloud computing has grown in popularity among enterprise customers, concerns exist about both security and reliability. AT&T said that it has built security on top of its cloud layer, so that it is fully integrated. The company also expressed confidence in its track record of reliability, both in its own data centers and in its hosting and network businesses.

Since last year, AT&T has focused more on the industry push toward cloud computing for its customers. In May, the company announced its first Synaptic Services feature--Synaptic Storage as a Service--which lets customers access data on AT&T's cloud as needed, paying only for the storage they use.

A recent survey suggests that CIOs are loosening the purse strings on IT spending. IT vendors may want to hold off their celebrations, though, because much of the spending appears to be headed for deflationary forces like cloud computing, virtualization, and their kissing cousin, open source.

An economic rebound never looked so dire.

That's unless you're an IT buyer, of course, suggests a new report from Goldman Sachs. In this week's report, titled "A Paradigm Shift for IT: The Cloud," Goldman Sachs said it expects that pent-up IT dollars will flow in the short term to building out next-generation data centers (e.g., cloud computing). But in the long term, less money is expected to find its way into fewer wallets:

After the initial build-out, Cloud Computing could drive some headwinds for the IT industry, as a result of two factors. First, we see virtualization as a deflationary technology. Second, we see IT spending consolidating in the hands of fewer buyers--the Cloud providers, hosting vendors, and large enterprises. These factors will likely dampen IT spending growth due to greater utilization and buyer pricing power.

Even short-term build-outs may prove disappointing, however, as Goldman Sachs expects large enterprises to grow existing virtualization and automation technology adoption in the rollout of private clouds, shifting slowly to an embrace of public clouds over time. The chart below gives some idea as to when cloud computing will hit its stride:

Who wins in this scenario?

According to the report, Red Hat stands to benefit from the cloud-computing craze. ("Red Hat is well positioned for the emerging Cloud Computing ecosystem, largely due to its open source background and current ubiquitous deployments in data centers, including enterprises, as well as in Cloud providers such as Amazon," the report states.)

But the real beneficiaries will be...the same old crew. "[K]ey suppliers for internal Clouds are likely to be those that have the most complete portfolio of hardware, software, and services," including IBM, Hewlett-Packard, Cisco Systems, EMC, and Oracle.

New boss...same as the old boss.

The other beneficiaries are the start-ups that provide critical components of cloud computing, with an emphasis on management tools. Here we may see open-source companies benefit, including Reductive Labs (Puppet project), Cloudera, and the two rising private cloud companies, VMOps and Eucalyptus, among others.

While open source doesn't factor heavily into this particular Goldman Sachs analysis, the firm has before called out open source's role in wringing more value out of fewer IT dollars. Open source is a primary driver of the global reset in IT spending expectations.

With less money flowing into the pockets of fewer vendors, we can expect to see both increased consolidation and fierce competition for the IT spending that remains. Those vendors that can help CIOs do more with less stand to benefit from this shift to low-cost, high-value computing.

And those that can't? Well, let's just say they may pine for the good old days of the global recession.

Microsoft released on Thursday a new position paper, "Privacy in the Cloud Computing Era: A Microsoft Perspective," that includes information about the remote storage and processing of personal information.

Privacy and security concerns continue to be a primary argument that cloud naysayers use against storing data and applications on the Internet. Big IT vendors and service providers like Microsoft and Hewlett-Packard will sooner or later be forced to take the cloud seriously or risk missing out on the whole next wave of IT consumption. And their large enterprise customers will expect them to offer cloud services with the appropriate levels of privacy and security measures in line with their business needs.

The interesting thing about this paper is that Microsoft takes surprisingly minimal responsibility for the data it will manage: