If there is a single question that keeps coming up in my travels and meetings it is this one! I would add here that we in the industry are not helping the situation by taking our usual course of focusing on whatever the current hot topic is, and making out that whatever we are selling is connected to it. I have spent a lot of time trying to address this topic in the context of what we can use web and cloud technology for, but very little on what it actually is! The next two posts deal with this question.
It would have been fair question to ask why client-server based IT was so hard to understand back around 1990. Indeed for those of you who remember this time, there was a similar kind of confusion. The benefit of hindsight shows that because client-server covers the entire breadth of business requirements from ERP on one side, through to various ways it can be implemented (thin or thick client, single, or n tier) on the other side. If in 1990 your experience was based on mini computers with terminals, this was a whole new concept, and you pretty well had to learn everything all over again. At the same time the confusion was increased by mini computer vendors making out that they had a role in client- server in various bizarre ways. Anyone remember the MicroVAX desktop machine that was designed to compete with PCs? And of course don’t forget that PC networks and client-servers lay behind the rethinking of business models through business process reengineering and matrix working.

Clouds cover an equal width and breadth of both technology, and equally importantly, new business requirements, so it’s a huge topic. Within the topic there can comfortably exist quite legitimately a great many different definitions that are quite acceptable and of course some pretty dodgy ones that are not really acceptable. But why use the name clouds at all?
The use of the word originates from the work to develop the capabilities and uses of Web 2.0, and its differences from existing IT both in terms of technology and its uses. The key point is that it focuses on the users and their ability to do what they want to do either singularly or in communities, without the need for specialized IT support. The technology layer is abstracted, or hidden, and as such in any diagrammatic representation need not be shown. Instead it was typically represented by a drawing of a cloud. The same principle has been used in the past for certain wide area technologies such as X25. If you take a look at the first two paragraphs and the diagram on Wikipedia you see this in more detail
clouds.jpgAt the same time as the Web 2.0 technologists were perfecting their approach to people-centric collaboration, interactions, use of search, etc, the traditional IT technologists were working to improve the flexibility and usability of existing IT resources. This was the path that led to virtualization, the ability to share computational resources, and reduce the barriers of cost and overhead of system administration. Flexibility in computational resources was in fact exactly what was needed to support the web 2.0 environment. Whereas IT was largely based on a known and limited number of users working on a known and limited number of applications -a predictable and manageable situation – web 2.0 is based on any number of users, deploying any number of services, as and when required. This occurs within a totally random dynamic demand model. In short it requires the computational resources to incorporate a layer that allocates the immediate run demands to the immediately available resources.
The result is that a debate on improving the cost and flexibility of the current in-house IT capabilities by using virtualization can be said to be a part of clouds, as much as shifting to using web based applications supplied as services from a specialist online provider. In fact it is probably best to define clouds in terms of the use case more than any other feature. There are even differences in regional emphasis on what is driving the adoption of clouds. The North American market is more heavily focused on a new wave of IT systems upgrades; the European market is more focused on the delivery of new market places and services; whilst in Asia the ability to jump past on premise IT and go straight to remote service centers suits their rapidly growing and geographically diverse region.
However there is a real shift in requirements on the business side that is driving the ‘use’ as a defining issue. IT has done its work on automating back office business processes and leveraging enterprise efficiency very well, so well that studies show the percentage of an office worker’s time spent on processes has dropped steadily. Put another way, the routine elements of operation have been identified and optimized. It’s the front office activities of dealing with customers, suppliers, partners, markets, etc. that make up the majority of the work. Traditional IT has done little to address this as its core technology and methodology of close coupled, state full (data centric), monolithic applications delivered by client server simply isn’t suitable for the user-driven flexibility that is required.
Business requirements are increasingly focused on the front office particularly improving revenues, margins, market share, adding revenue and customer management services. All of which require a change in the core technology in order to deliver to requirements where diversity around the edge of the business and its markets is what creates differentiated and real revenue value. Web 2.0 user-centric capabilities are seen as a significant part of the answer, and the technology model of flexible combinations of ‘services’, instead of monolithic applications combined with user-driven orchestration, supports this.
It’s not even just a technology and requirement match, it’s also a match on the supply side. These new web 2.0 requirements delivered through a cloud offer fast, even instantaneous, implementations with no capital cost and provisioning time, and have a direct cost attributive charge paid for by the users against consumption. This can be compared with the yearly budget and overhead-based cost recovery model of traditional back office IT, in itself a hugely important factor that is driving much of the business uptake. In fact many cloud based front office services may only have a life of a few months as business needs continually change to suit the increasingly dynamic nature of global markets.
So it is true and correct that clouds provide the technology to reduce the cost and complexity of provisioning computational capabilities within the enterprise, or to build new shared service centers operating at greater efficiency externally. But that’s not really what the fuss is about! The issue driving the use of ‘services’ is a new business model making use of new technology to enable and empower people in the front office and that’s what clouds as a revolutionary change is all about.
Note; The most widely accepted definition of clouds is the American National Institute of Standards and Technology, NIST, which states that cloud computing is made up of:

  • Five characteristics :
    On-demand self services, broad network access, resource pooling, rapid elasticity and measured services
  • Three delivery models :
    Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure- as- a- Service (IaaS)
  • Four deployment models :
    Private cloud, community cloud, public cloud and hybrid cloud