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The Santa Clara Cloud Expo held in November 2011 was the ninth year of the annual industry event. It is difficult to believe that cloud computing technology has been around for so long, when it is constantly written up as being an emerging technology. Of course, the early e-mail services such as Hotmail were among the first practical applications of cloud computing. The 2011 Expo, however, signals that the technology has matured and new business models are evolving that could cause major changes to the IT industry as we have known it for the past 30 years.
Segmentation in cloud computing services
One significant trend identified at the Cloud Expo is that the cloud computing industry is segmenting into three distinct classes of service providers.
Infrastructure
Infrastructure providers are those companies which host the data and application servers, provide connectivity, manage firewalls and ensure data security. The acronym IaaS, (Infrastructure as a Service), is used to describe these services. Amazon Web Services is perhaps the largest at this time, but many new companies such as Rackspace, GoGrid and others are emerging with varying business models and price points to offer multiple options.
Platform
The computing platform space has the early movers Amazon EC2 and Google but is also likely to see the entry of software giants like Microsoft and SAP. The software platform would be customized to work seamlessly with the infrastructure provided by the IaaS companies, so that the applications hosted on them perform irrespective of the architecture of the host servers. The acronym PaaS (Platform as a Service) is used to describe this segment of cloud computing.
Software applications
This is the interface to the computer user. SaaS, (Software as a Service), is also termed as on-demand software. In the past, each computer user had to buy copies of licensed software for each application and then pay annual maintenance fees for upgrades and support, even if his usage of the software suite was only occasional. A good example is the Microsoft Office software suite that resides on millions of personal computers. With SaaS, the user can access the Microsoft office on the cloud and pay a small fee for his usage.
Most business software applications such as accounting, payroll processing, customer relationship management and the like are already designed for hosting on central in-company servers. These would now be hosted on cloud servers to enable even small and medium size companies to use expensive software suites like ERP on an affordable pay-per-use model.
With the growth in usage of social media, future software suites, especially those used for interface with the non-business users will need to be designed for a chat-like interface. Already, some internet based shopping portals are designed for this format.
Changes in the computer hardware and software industries
Cloud computing is poised to bring about disruptive changes in both the computer hardware and the software industries. The personal computer industry in the past 30 years has focused on the development of faster microprocessors, faster input-output systems, greater disk and flash memory storage and such silicon related advances.
In the cloud computing environment, the PC would only need a key board and display with some data storage capability. These would make the computers simpler and cheaper and make the product more of a commodity.
The other major change is the use of mobile phones and tablet computers to perform many of the functions that personal computers have been used for. Since the penetration of mobile phones is far greater than that of personal computers, the trend is that cloud computing could accelerate the demise of personal computers in the form that we know them.
The data display from business software applications may need to be tailored to the smaller screens of the portable devices.
The software industry, ranging from the simple Office application suites to the expensive analysis and design software, have traditionally depended on selling millions of copies of the software to multiple users and to then derive annuity revenues from maintenance and upkeep. With the pay-per-use feature of cloud computing, these companies will need to rethink their business models.
Data security issues
In mid-2011, the cyber attack on Sony Entertainment Corp.’s servers caused theft of personal data of several million PlayStation subscribers. The attack was mounted from a fake account created on an Amazon cloud computing platform and not by the conventional hacking process. The perpetrators of this cyber attack have not yet been tracked. Even if found, the legal penalties may be minuscule.
Large corporate computer users have reason to be concerned with the risk of such data theft. Cyber crimes can be carried out across international borders and there is virtually no legal remedy. A single rogue employee at a service provider can cause major losses to the corporate user. This risk has to be weighed against the enormous savings in buying and maintaining the IT infrastructure. It would be interesting to see how this issue gets addressed by the cloud computing industry.
The Cloud Expo 2011 certainly signals that cloud computing is set to transform information access and usage not just at our work place but also in our personal lives.
About the author: Margaret is a blogger by profession. She loves writing on environment and technology. Beside this she is fond of books. She recently bought a 3d laptop. These days she is busy in writing an article on shu uemura.
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Dear Margaret,
Thanks for posting such an elaborative article on cloud. Good job! Just as a value add to what you have said, I would also like to mention few other facts on cloud computing and its future.
1) According to research reports from Forrester, cloud computing market is expected to grow to $241billion by 2020.
2) Cloud computing give benefits like cost savings, flexibility, and choice for computing resources. This means organizations have the option of increasing the infrastructure based on the requirement of their project without actually purchasing the systems.
3) Due to public accessibility and exposure, that are cloud’s main features, there are many questions which go unanswered most of which are related to application security over cloud.
4) Cloud testing often comes into picture when we are talking about performance or load tests against cloud-based applications. Among various reasons, the reason which makes cloud testing most difficult is the fact that the third party cloud vendor infrastructure is not available for testing its performance and security capability thus making it difficult for its customers to build trust.
5) NASSCOM’s recently launched study titled Deconstructing the Cloud- The new growth frontier for Indian IT-BPO sector has also provided deep insights into the above topic. Cloud’s impact on traditional service lines will be net positive as it opens up new productized opportunities and extending scope of current IT services. SaaS and IaaS which are observing relatively strong adoption will continue to grow- IaaS market players will attempt to overcome commoditization of underlying elements by achieving service differentiation in terms of price or quality while SaaS market could potentially see an explosion in the number of vendors catering to specific client needs. PaaS market which is still in the early stages of comprehension and adoption, could get a face-lift from SaaS development to achieve its market potential.
Regards,
Manish