IDC Conference on Cloud Computing – Madrid

May 27th, 2010 by Alfonso Olias

2010 might be the turning point for Cloud Computing, especially in Spain. The current economical situation is pushing both SMEs and large corporations to take a closer look at their businesses in order to become more competitive – maximizing their investments and reducing their expenditures. The optimization of their free cash flow is a must. As long as their technology systems keep getting obsolete, companies would need to invest heavily into IT (to purchase new infrastructure, licenses etc.) Though the reality is that companies, in an attempt to reduce their expenses, decide to keep their current infrastructure whilst increasing their costs in support and probably losing competitiveness. It is here where the Cloud addresses the issues brought on by the crisis. Organizations need real solutions to solve their problems and help improve their competitiveness.

On the 27th May we had the opportunity to attend the IDC Conference on Cloud Computing, where almost all the big players of the Cloud met sharing their vision and strategies for the Cloud.

One of the presentations that best illustrated the advantages of the Cloud was given by Codere who outsourced their IT into an external virtual private Cloud infrastructure whilst keeping control of the management. Several years ago they started evaluating virtualization and consolidation technologies in order to maximize their CapEx in IT. Spending too much money and effort in an attempt to build up their own private Cloud, they realized that they needed to refocus on their core business.  After assessing the current Cloud offering they moved to the BT Cloud. (BT enables the creation of a virtual data center in 4 hours, and even you can set service level 1 and 2.) As a  result Codere made savings of 40% compared to their in-house IT infrastructure and a payback in less than 14 months.

Cloud vendors such as IBM and HP presented their solutions as a product mix between Cloud and the traditional outsourcing model. Their targeted customers being large corporations, they are offering virtual private clouds.  The only difference was the new buzz word introduced by HP, TaaS, Test as a Service.

At The Server Labs we have been using the cloud for testing for well over a year, and with very  good results. It is a good way to assess your services without incurring in CapEx, and with shorter testing times. Just think how long takes to set up a testing environment in-house, when at the same time other public cloud vendors can provide IaaS within minutes.

Microsoft’s cloud strategy has focused on Microsoft Azure, targeting both big companies and SMEs. Apart from offering IaaS, also they are moving into SaaS with their email service and office suite.

Google presented their cloud services portfolio (SaaS with gMail etc, and PaaS based on GoogleApps). For the time being, they have still not moved into IaaS in order to compete with Amazon or Microsoft, but who knows which will be the next step of Google in the Cloud. Many traditional companies in Spain are moving to Google Apps.  The government of Extremadura presented how they are using the Cloud with Google Apps. E.g. they are offering online services such “cv reviewing”, where job seekers and the public employees meet in the cloud through Google docs to review the curriculum online and in real time, saving lot of time and  avoiding unnecessary queues. That is productivity! According to Forrester companies can save around 229% with Google Apps in comparison with traditional on-premise email solutions.

Legacy Cobol applications can be moved to the Cloud thanks to the efforts done by Microfocus, allowing  companies that have legacy applications to run them in Amazon or Microsoft Azure. This might benefit the Banks as they will not have to upgrade their mainframes.

Other companies such LILLY are using the Amazon EC2 /S3 public cloud for High Performance Computing (HPC), as we do at the European Space Agency. We had the opportunity to see a real demo. This is something to appreciate, because only BT and Terremark showed us a demo of their services. LILLY benefits from the cloud the same way we do, running experiments on demand without having to wait weeks or even months to have access to a ready to use infrastructure in their in-house Data Center.

Another interesting point at the conference was a round table discussion about the threats and potential show-stoppers of the cloud adoption. The main concerns that came up were about the cloud vendor lock in, the software licensing, data ownership, data location and LOPD (regulations about data protection of customers) security, disaster recovery etc. Before moving to a public cloud, you need to understand these concerns, the implications to your core business and, of course, ask a lawyer before you move data into the cloud.

In conclusion, we believe that though there are still many barriers and challenges to solve regarding the offer and the demand, the cloud is mature enough to provide any company using it with real advantages. Private clouds will make sense mid-term or as long as the companies have to amortize their IT infrastructure. But there is no doubt that public clouds will become the standard in the long run. One simply cannot get the economies of scale big vendors have and building up a private cloud requires a substantial investment in IT (CapEx), in addition to licenses for software, hardware, electricity, cooling, sys admins, etc.

We will talk more about this in future posts.