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Into the Clouds: MIT Cloud Panel - Part 1

Private vs. Public and Internal vs. External Clouds, security concerns and more from a panel discussion at MIT.

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After Microsoft CTO Barry Briggs’s talk on cloud at MIT there was a panel discussion that included Barry, Chris Greendale (founder of Cambridge Technology Partners, and now a new venture, Cloud Technology Partners), Ellen Rubin (co-founder CloudSwitch), and David Skok (Partner at Matrix Partners). A number of interesting topics were discussed.

Internal vs. External / Private vs. Public Clouds

Some of the discussion was on the benefits of an external cloud vs. internal cloud. Clear, simple definitions of these terms are important as many discussions of public vs. private and internal vs. external clouds are mired in vagaries and complexity. I like RightScale’s definitions, paraphrased here:

  • Internal Cloud: Located in the enterprise datacenter, the customer owns the assets, which are capitalized.
  • External Cloud: Located at a service provider, charges for the service are expensed.
  • Private Cloud: A private cloud is dedicated to an organization. It is “single tenant” in that sense, but may be used by many internal tenants within the organization.
  • Public Cloud: A public cloud is shared across many organizations that don’t even know about each other.

The panel asked rhetorically, why anyone would want to build their own internal cloud when Amazon, Google, Microsoft, and scores of others have it down to a science. We began our seminal report “On Demand Now”  with the analogy of electric power: No one builds and operates their own coal-fired electrical power plant—you buy electric service. The analogy holds for the various “as-a-Service” flavors of cloud computing as well. Why would anyone build their own cloud when they can buy it as a service?

Security, Regulatory, Availability Concerns

Issues of security were discussed, but as we’ve mentioned before, the security practices in most SaaS, IaaS, and PaaS providers are better than the vast majority of corporations, as their reputation and business depend on it. Of course before putting critical data and functionality onto the cloud, buyers must do their due diligence on the security practices of the provider.

Specific industries, like Pharmaceuticals and medical devices, have major compliance requirements that can present a higher hurdle to using cloud solutions. But there are SaaS providers, like Plex Online, that are successfully serving some of these segments.  

Cloud services also tend to have considerably higher availability than the average corporate solutions. Because it is all they do, cloud providers can afford to implement redundant systems and sites with robust failover capabilities. Nevertheless, there are specific applications, like shop floor and warehouse, which cannot tolerate network outages bringing down the factory or DC. In those areas, there are fewer SaaS vendors, and they tend to insist on redundancy in network connections and service providers for each facility.

Cloud as a Software Startup Enabler

The panel asserted that cloud computing has cut the cost of funding a startup by quite a bit. No doubt cloud computing reduces upfront capital costs dramatically compared to buying and running your own datacenter. However, compared with vanilla, single-tenant hosting services (which are decidedly not cloud in our book), the difference in the upfront costs are not nearly so dramatic.  Still clouds can provide significantly more value to startups than dedicated hosting. As a startup takes off, it is often very difficult to predict how quickly demand will grow and in a hosted environment the entrepreneur is faced with the choice of “playing it safe” by buying lots of capacity (expensive route) or  waiting until the demand is about to exceed capacity before bringing more servers online (risky route).  A cloud infrastructure relieves the startup from that stark choice, allowing them to delay the procurement of more compute resources until the moment they are needed. So, in that sense, cloud services, in particular IaaS, help a lot in dealing with future demand growth uncertainty.  There are also potential savings in the attention and resources required for managing the administration and growth of the infrastructure, although that may vary by cloud provider. 

PaaS offers the additional promise of a rich set of software services and capabilities to enable more rapid development of rich applications. Of course the idea of having a rich application stack on which to build is not restricted to cloud applications, as Microsoft and others have demonstrated. But clouds do offer more rapid implementations.

In part two, we will touch on hybrid environments (Cloud + On Premises, which will be the case for the majority of enterprises for a long time to come), tools and services to manage the cloud, and APIs for the cloud.

This article is part of our ongoing Cloud Series – our effort to bring clarity to these technologies.

Read also Into the Clouds: MIT Cloud Panel - Part 2

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