Their mission statement sort of sums it up nicely what they are trying to do.

“To produce the ubiquitous OpenSource Cloud Computing platform that will meet the needs of public and private clouds regardless of size, by being simple to implement and massively scalable.“

As the two (currently identified) deliverables of this initiative they will deliver a OpenStack Compute and OpenStack Storage for companies to provision and manage large private cloud and storage clusters respectively and being generally available by October 2010.

This seems like a amalgamation of Rackspace’s Cloud Files filesystem that it has already been providing to its current customers and NASA’s Nebula Cloud that has been designed to managed large datasets.

Rackspace has been the primary provocateur behind this initiative. Novel as this idea is and I sincerely hope that the industry for once comes together to define a common standard that all of them can stand behind. That said, I think the true motivation behind it might be driven by some of the posture of other bigwigs in the Cloud.

1. Primary among them would be the increasing acceptance of Amazon EC2, S3 APIs as a de-facto standard, in the absence of one. CEO of Eucalyptus, the first open source cloud vendor, Marten Mikos mentioned as much in his recent panel talk in Structure 2010.
2. The coalition of Cisco, EMC and VMWare, coming up with their Vblock infrastructure building blocks. This coalition is causing more corner office meetings in Armonk, Palo Alto and Redwood Shores.
3. Microsoft Azure getting ever so closer in the review mirror – as I alluded to in my earlier post.

Rackspace has been primarily a public Infrastructure-as-a-Service (IaaS) cloud provider with over 80K+ customers (according to their website) and second only to Amazon Cloud Services.

The pure-play Infrastructure-as-a-Service (IaaS) have run into some roadblocks with security and compliance concerns. Consequently the Private/Hybrid Cloud rhetoric has gained lot of momentum. Rackspace, and so also Amazon, has had to come up with a Private – Dedicated Cloud offering for enterprises that are holding back from crossing the Public Cloud bridge. Without the large enterprises moving to the Cloud, keeping up the current rate of growth is impossible. Private Clouds, while allaying the fear to a certain extent, leads to diminishing returns in the economies of scale, cloud vendors seek to establish.

The Infrastructure-as-a-Service (IaaS) vendors have also been venturing to move up the stack and build vertically integrated stacks. For e.g. Joyent a pure play IaaS player until recently has started building out its platform to support application development on top of their infrastructure.

Back to the OpenStack initiative. As a optimistic technologist, I would love for this OpenStack group to succeed atleast in forging standards for Clouds.  For that to happen they should bring under their umbrella some of the good work being done by Apache DeltaCloud, DMTF, Cloud Security Alliance et al, in driving standards for interoperability, portability and security of clouds. Given that Rackspace is a big VMWare partner (lead in the DMTF process), it should not be difficult to fold the DMTF initiative into this OpenStack process. Also bringing Red Hat, a big Open Source vendor, and a DeltaCloud supporter into the fold, would not hurt the chances.

Currently, the OpenStack is just starting with Cloud Storage and Cloud Compute. Given that this is a open source framework which seemingly will have many more vendors pledging their support would do well to include additional things like

1. APIs to support metering, chargeback for thirdparty billing services.
2. Support industry vertical clouds (healthcare, insurance, retail) and the related compliance mandates.
3. Support standards based Identity Management (OpenID, OAAuth)

Given that HP, Oracle, Google, SAP, IBM, Microsoft, Amazon, VMWare, Salesforce.com have not pledged their allegiance (or not) about this initiative – the success of it is anything but guaranteed at this point.

My personal take:

1. If the cloud computing, as it is, has caused enough of unknowns to companies, thereby holding them back from embracing it – making it open source just makes it  worse. It still does not resolve the current concerns around security, portability unless the big players come together on standards. CIOs now have to add a few more layers of due-diligence to make an educated decision.
2. I don’t think by just being Open Source suddenly delivers any significant value to customers that are looking at Cloud Computing. At best it might appeal to the so-called “Private Cloud” pursuers.  But then again, we are talking about IT organizations trying to do their own Cloud thing. I am yet to believe that many companies are capable of creating/managing their own private cloud infrastructure.
3. Also if Rackspace, Intel, Dell (all B players in Cloud so far) are combating competition, just making something open source does not make it a game changer without more established players pledge their support.

After being a me-too announcement of a Cloud Computing platform, Microsoft Azure, comprising of both Infrastructure-as-a-Service and Platform-as-a-Service, has seriously changed gears in the recent months. While always being a proponent of the Private/Hybrid Cloud movement, Microsoft has signed partnerships with large software companies and service providers  as shown by their recent announcements

• Infor, 3rd largest business applications company with 70,000 customers across 100 countries,  committing to standardize its cloud offerings on Microsoft Azure
• Ebay, announcing today, that is going to fit its data center with Microsoft Azure appliance
• Dell, HP, Fujitsu to provide Azure Cloud in the data centers they manage.

If I am Amazon.com, Rackspace and also Salesforce.com to an extent, I would be starting to take Microsoft seriously.

Amazon, Rackspace and GoGrid are pure-play Infrastructure-as-a-Service providers. While pure-play infrastructure is appealing initially for its platform agnostic nature, it still requires that customers to do a lot of work. They have to build and maintain their own platform or lease a platform from another platform-as-a-service provider. An application company or an IT organization cannot continue to shoulder the burden of managing disparate service providers, their SLAs and keep getting ping-ponged for solving an issue. In my opinion, eventually these platforms will converge, atleast the infrastructure and platforms. Amazon, Rackspace, GoGrid will have to either acquire one or more platforms and move up the stack to provide a complete platform. SaaSGrid, Engine Yard and LongJump seem like good acquisition candidates for Cloud Infrastructure providers as they move up the stack to platforms across .NET, Ruby on Rails and Java.

Salesforce.com has a different challenge. They have a proprietary platform with a non-industry standard database which creates challenges for companies that build their products on them – as I alluded to in my Platform-as-a-Service post. Also the fact that they might compete on the product side with some of the companies that build product on their platform is  something companies would be vary of. Their recent announcement of the partnership with VMWare addresses the proprietary platform constraint, but we’ll have to wait and see how successful it will be.

So given this, Microsoft, with the cloud cover off its platform, consisting of Tools/SDK for application development, Windows Azure the compute platform, SQL Azure database, AppFabric for Business Process, Identity Management and now Azure Appliance along with the ability to create Hybrid cloud platforms seems ready to rumble. The fact that they will also have support for bare metal VM shortly will open it up for non-microsoft based application as well.

Amongst all the hundreds of products Microsoft has, no two products fit in so well with the Cloud as Microsoft BizTalk and Microsoft Identity & Access Management (most widely known as Microsoft Active Directory). Both BizTalk and Active Directory have been unquestionable leaders in their respective space in solving the complex problem of Data Integration and Identity Management respectively. With the world of software becoming more of a niche solution SaaS/ Cloud Services market, if anything, those very  problems of Data Integration and Identity Management has exacerbated. While other products Microsoft is trying to adapt to the world of Cloud are rapidly transitioning, these two, I feel, can really put Microsoft right in the thick of the Cloud movement and make them a critical cloud player.

Microsoft BizTalk started in the early days of B2B data interchange movement  in the late 90s when XML was becoming the de-facto standard for sharing data. BizTalk became the torchbearer for SOAP (Simple Object Access Protocol) and helped companies with complex data integration involving ERP, Manufacturing, Warehouse Management and Financials. The offering evolved over time to include a robust process orchestration framework and support for a large set of standards like EDI, SWIFT, Rosettanet. It could do all those over HTTP/HTTPS without needing expensive proprietary networks and do so across heterogeneous technologies. Look at the SaaS/Cloud landscape now. Almost every solution adoption essentially includes data integration to other SaaS/Cloud applications or on-premise solutions. With Microsoft not extending its  pre-Cloud leadership into cloud small vendors like Boomi, Cast Iron Systems have been able to get some traction in the large data integration market. The IBM acquisition of Cast Iron further illustrates the critical nature data integration has assumed in the new Cloud-based scheme of things.

Microsoft Active Directory on the other hand has been synonymous with the whole Identity Management/Directory Services space – much like Band-Aid has been for adhesive bandages. Regulatory Mandates like SOX, PCI-DSS, Segregation of Duties have made Identity Management an imperative. Majority of the Global 5000 companies have Active Directory deployed to govern their Access and Identity Management across their global enterprise. With the ability to define Sites, Trees (cluster of sites) and Forests (cluster of trees) to model large hierarchical organizations into domains, sub-domains and assign and manage access policies. Although they started with Windows based networks, they eventually expanded to support Unix based platforms as well. Active Directory has prominently figured as a prime candidate in any/all Identity Management technology RFPs. In most cases, it has not been a question of if it was a good fit, it was more a question of if it affordable? Incidentally, that is one of the fundamental premise of most Cloud based offerings – taking solutions that were until now only affordable by large companies and making them available to small and medium businesses by leveraging economies of scale. With increasing number of Cloud based vendors supporting SAML/SPML based authentication/provisioning and allowing companies to centralize their authentication, extending their corporate Identity Management solution to incorporate Cloud based offerings. Without Microsoft eager to step in has allowed smaller companies like Symplified, Ping Identity, Conformity to position themselves as the leaders in this critical market.

So Microsoft – here is a market that is begging to be served and yours to lose. While you still have work to do to make your to Azure Platform, Business Applications, Office Suite widely adopted in Cloud, BizTalk and Active Directory are the need of the hour and are ready to go. So waste no more time – let them free and watch them soar in Cloud.

In my discussion with Sinclair Schuller, the CEO of Apprenda, a couple of weeks ago, it became clear that they were going to do everything at their end to move the needle in terms of getting increased SaaS adoption. He strongly felt that this would encourage the ISV community looking to build SaaS applications to take the plunge. I think it is a great strategy accelerate the adoption of this platform and validate their offering.

SaaSGrid over the last year has continuously demonstrated their agility in making the necessary course corrections to their strategy inline with the evolution of the nascent Cloud Computing world.They started out as a pure-play SaaS Platform-as-a-Service for .NET applications. They then went on to add robust multi-tenancy capability, usage tracking and billing to the core platform. ISVs could then just focus on their core competency – i.e., building their product and serving their customers. To accommodate the varying needs across ISVs they expanded the delivery to model to include a platform-to-go. In doing so they have essentially made their platform agnostic to the underlying Infrastructure provider and affording their clients the ability to switch infrastructure providers (Amazon EC2, Rackspace or even Azure) without having to change their code. And for those that are not yet ready or have constraints using Public Cloud, they could take the same platform and build a SaaS application run it in their Private Cloud until such time.

The goal behind releasing SaaSGrid Express, as Schuller tells me, is to allow small companies start building their product, do private betas and start generating revenue with no overhead of platform licensing costs. And then when they think they are ready to support a large customer base they can transition to the flagship SaaSGrid platform.

One of the big challenges with Platform-as-a-Service offerings has been the lack of easy migration path for the existing applications to Cloud without rewriting a significant chunk of it. Vendors like SaaSGrid seem to have recognized the issue, and the consequential resistance to adoption, and are fast bridging that gap with capabilities around multi-tenancy conversion, in-built usage tracking, infrastructure vendor neutrality and providing them with ability to deploy existing on-premise in cloud.

What next?

While Apprenda has been primarily focused on ISVs in their messaging and focus, I think the whole legacy applications owned by IT organizations presents a large opportunity in the non-COTS applications world. Application Platform on the .NET side has been the sole domain of Microsoft until now. But as Microsoft continues to struggle to get meaningful traction on its Azure strategy, Apprenda would do well to take a leaf out of the books of the open source vendors like SpringSource and JBoss and build an engaging community around the platform. Starting with this community edition product announcement foster an ecosystem that will accelerate, evangelize and add to the footprint of the platform.

Download SaaSGrid Express on the Apprenda site.

Let us start with examining the raison d’etre of Open Source. Open Source made its entry with a bang with the introduction of Linux operating system. These were the days when Unix vendors and Microsoft were doing very little innovation besides suing each other and banking large license deals. Linux represented the rebellion against the proprietary operating system vendors and put the power in the hands of the masses to innovate and contribute towards a larger goal that each of them by themselves would not have been able to accomplish. The appeal of a free operating system with inexpensive support (or no support if you were brave enough to lean on the community) was just what the doctor had ordered. It was the equivalent of generics in the world of pharmaceuticals – just-as-good but at one-third the cost. The fact that Linux would work on commodity hardware amounted to double dipping for companies. Cost Reduction++.

Despite starting off as a low-end pretender to the incumbents, thanks to the rate of innovation Linux has caught up with all the high end operating systems – some would even say it is better. The success of linux opened the floodgates of open source offerings in all area like databases (MySQL, PostgreSQL), System Management Tools (Nagios, Zenoss), Content Management (Alfresco, Drupal) and even to mission critical business applications (Compiere, SugarCRM, Apache OFBiz). Not limiting itself to end products, Open Source has since moved into platforms (Apache, JBoss, LAMP, Zend) upon which ISVs or IT shops have built their products.

So far so good. Open Source was on cruise-control seemingly crossing more frontiers.

Then came the SaaS wave. SaaS posited that it was absurd for companies in the non-technology business to each spend large amounts of resources and manage their own IT infrastructure. Companies were better off focusing on their core business and leave IT Management to the experts. They also proposed hosting and managing software and letting companies use them in a subscription-based model, thereby helping companies manage their ballooning IT spend. After the initial spurn, the world seems to have come around and accepted the notion of SaaS. Armed with economies of scale through multi-tenancy, virtualization (the coincidental wide adoption of broadband), SaaS is now providing solutions ranging from edge apps like Email (Google Apps), Sales Management (Salesforce.com) to business critical applications like Financial Management (Intacct), ERP(Netsuite), Human Capital Management(SuccessFactors,Workday, Taleo), Product Lifecycle Management (Arena Solutions), Security(Symantec), Identity Management (Symplified).

With SaaS, companies/customers need to concern themselves only with the service availability and forgo the IT nightmare. No more software license, upgrades, maintenance, army of IT people, backups. All that is packaged into a single subscription fee paid on a as-used basis.

Riding on the coattails of SaaS, its brethren – Infrastructure-as-a-Service and Platform-as-a-Service are now wooing outlier custom projects onto pay-as-you-go, focus-on-your-core-business platforms. They take away the complexity in the infrastructure and technology platform giving you the similar benefits as SaaS.

What does all this mean to Open Source? Does this mean the target customer base for open source companies would soon be dwindle down to the SaaS ISVs, PaaS vendors?

The biggest challenge dealt to Open Source by SaaS would be that with Open Source, while the costs of licensing and maintenance are reduced, companies will still bear the responsibilities of building their own solutions and maintenance. This would mean that companies need to continue to spend on maintaining large IT resource pool and deal with the vagarities of complex technology integration. The entire premise of SaaS hits at this very pain.

That said, if you are a CEO of a Open Source company, you should not be immediately concerned about customer base seemingly dwindling with every gain of market share by SaaS/PaaS vendors. At the same time here are three things to think about

1. Open Source represents the single biggest large collaboration, crowd-sourcing based successful innovation models of our times. There are many other industries trying to borrow what-has-worked in Open Source and apply it to their industries. So while many open source companies are looking to cash out selling themselves to proprietary vendors (MySQL, Xen, SpringSource.. the list goes on), it serves you well to keep expanding the engagement with community and serving their interests. There will be a open source shakeout – lot of “gimmicky” open source vendors who just have a useless community edition product will wither away. The longer you can keep your innovation going, the more longer you will be viable.
2. Consider having a SaaS (or atleast a hosted subscription service) for your Open Source application. Software technologies will only be delivered through subscription in 5-10 years from now. Use this time to establish that presence while you still have a license business.
3. Join hands with other Open Source vendors and create platforms/applications that are integrated and easy to consume and maintain. This should not just be limited to technology integration but also in the areas of upgrades, support and documentation. RedHat has done a great job in integrating all their offerings into the JBoss Suite and reducing the complexity for their customers. Doing this will address both the value delivered by PaaS and the overhead requirements that customers have today in stitching together multiple open source offerings. I see a future where co-operative platforms where multiple vendors contribute to make up the platform and its ongoing success.

The idea of this is to create discussion from both the Open Source and SaaS/PaaS die-hards. Like it or not, if you look further ahead, this is head-to-head is going to happen, no way around it.

To give you good sense of what Platform-as-a-Service would mean I will start with an analogy with a relevant topic.

Say you are FremantleMedia and you are in the business of producing and hosting American Idol. Since your core business is creating and delivering an entertainment programs, building and owning an auditorium/theater probably figures last in your list. Your other choice is to rent the Kodak Theater. With your rental comes all the necessary components you need to create and deliver the show – namely the  studio, the podium, the green room, A/V system, the lighting, the chairs, the ticket booth, the tiered seating, the rest rooms, parking lot.. you get the idea. It even comes with accommodations for the different classes of audience (Think customer segments) children, aged, families, physically disabled audience. So you did what your core competency was created, delivered the program in the theater. You did not have to go through the hassle of building a theater, owning it and incurring the overhead of managing and maintaining it. The theater by itself, might have turned to the electric utility, water district, security companies for delivering the various needs you might have needed. But all that came as a package as part of renting the theater.

Platform-as-a-Service seeks to deliver a similar experience to companies using and creating web based applications, to meet their business needs.

Platform-as-a-Service (PaaS) at its core comprises of a computing platform that facilitates the development and deployment of web application without requiring companies to build, configure and maintain the infrastructure that hosts it.

A best-in-class Platform-as-a-Service must include

1. Application Development Technology Framework: A robust application development technology framework built on a technology that is widely used. Most widely used technology frameworks are built on J2EE, .NET, PHP. The framework must support the management of the entire application lifecycle of design, development, testing, delivery, change control and update of software applications.
2. Ease-of-Use: One of the key selling points of Cloud Computing is that the complexity gets masked from the clients. So PaaS should be no different. A Platform-as-a-Service should come with easy to use WYSIWIG tools with pre-built widgets, canned UI components, drag-and-drop tools and support for some standard IDEs. Eclipse, NetBeans, InteliJ to name a few. It should facilitate rapid, iterative Application Development.
3. Business Process Modeling: A strong business process modeling framework that allows you model your business process and build the application around it. Remember, the new age applications should be built using model-driven, agile methodologies to afford you the ability to quickly adapt to the rapidly changing dynamics in a global business landscape. A good platform must support robust digital and human workflow capabilities and allow for rich collaboration as part of the business transactions that would be conducted in the application.
4. Ubiquitous: Companies these days have extended workforce in the far extremes of the world and they operate round the clock. The platform of choice should be accessible and available (at acceptable service levels).
5. Scalable: Businesses are dynamic and the workforce is elastic with all the M&As, divestitures. The platform should be smart enough to leverage the elastic capacity from the underlying infrastructure, when put under stress of  volume data and/or user load. In addition, it should also address the needs around State Management, Persistence, Caching, Localization, Accessibility, Cross Browser support while abstracting it from the application development team.
6. Adaptive: Technologies change by the day. Mobile is increasingly becoming platform to deliver atomic services. A best-in-class PaaS should provide ability to develop an application and deliver it on multiple run time platforms besides web. Mobile and Rich Client capabilities are becoming increasingly the norm.
7. Secure: Should I say more? The more things we push on the internet the more we offer to the hackers. To effectively combat the threats, the platform should address things like Cross-site scripting, SQL Injection, Denial of Service, Encryption of traffic and make it ingrained into the application development. Additionally the platform must support  single sign-0n capabilities for you to be integrate with your other on-premise applications or any cloud applications.
8. Inclusive: The platform should provide the ability to include/embed/integrate other applications built on the same platform or others. In fact, support for integrating to third party services using REST, Web Services or any other RPCs should be built in should be a minimum requirement in evaluating Platforms.
9. Portable: Business dynamics change and there is a distinct possibility that you might want to move your application from one Infrastructure-as-a-Service provider to another that your acquirer has standardized on. The platform should be agnostic to the underlying infrastructure and allow companies to move the application to another infrastructure. This might also be the case as you scale from a smaller vendor to a larger vendor as your business goes from being a million dollar company to a billion dollar company.
10. On-board Tools: Considering that most companies transition existing applications to the platform, it is fair to assume that they would also like to bring a subset of data with them. To easily and quickly migrate data over from the legacy on-premise application to the application based on Platform, bulk import, transformation tools would be a necessary part of the toolkit that comes with the platform.

PaaS Landscape

If you look at the current landscape, you will find two sets of players – the big kahunas in  Force.com, Microsoft Azure , Google App Engine and some niche nimble successful smaller ones like LongJump, Engine Yard and SaaSGrid.

Who needs it?

The two key consumers of Platform-as-a-Service would be

1. Small ISVs/Startups who work under tight budgets and scant resources. They cannot afford to invest in a dedicated team building a platform. Since majority of them operate on a atomic idea and opportunity window, time to market is critical for them. PaaS provides them a quick way to get their product to market.
2. IT shops laden with the inventory of fragmented legacy apps (i-have-an-app-for-that?) which are band-aided together. Invariably most of those applications will be written in some outdated technologies like ColdFusion or Foxpro. The challenge companies would be facing would be dwindling knowledge about the application and not being able to retain that “special talent” who built that application and finally deciding to re-write them.

As I mentioned in my last post, specialized tasks are best done by a specialist. And that is more apt in the case of Platform-as-a-Service than others.  Building a Application Technology Platform is highly complicated stuff and is not for the regular “Joe the Geek” who hacks some early version of an open source software and creates a small bespoken app.  It takes a lot of foresight and architectural skills to create an adaptive, scalable platform and support it.

So after establishing the virtues of PaaS, let us look at some of the hurdles that are preventing a wider adoption by companies.

1. Transition: Companies have a lot of legacy applications that are currently in use.  For better or for worse, they work and help run business. There is no way to migrate them as is to a Platform without rewriting them. Any new application requires new investment. With IT budgets no longer the same as the glory days, CIOs will have tough time wiggling out a slice of the budget for a new application. Any tools that will have Rapid Application Development and data migration tools that can reduce the upfront work and cost will surely help get past this hurdle.
2. Portability: Each PaaS platform comes with a underlying IaaS platform that they have partnered with. Already finicky, companies that bet on a particular platform would definitely like their applications be portable to other Infrastructure that is either their corporate standard IaaS or internally hosted infrastructure. The PaaS platforms available today are not geared to be  a-platform-to-go. Also of critical importance is ensuring that platform based on a widely used technology. Try getting a Ruby-on-Rails programmer or architect in a offshore country. They are expensive and scant.
3. Viability: Outside of Force.com, there are not many successful PaaS platform companies that have established a track record. Coghead’s PaaSing is still fresh in memory. Google and Microsoft have announced  me-too platforms but it remains to be seen if there is enough focus on it amidst the hundreds of other things they both try to do. The rest are small vendors who will f ind it difficult to get past the corporate attorneys and their terms.
4. Credibility: While there are many vendors claiming their platform as the nirvana for all things application development in future, there are few that case studies of real critical applications being built on their platforms. Without that, a pure-play PaaS vendor will have a tough time convincing the CIOs of expanding their technology footprint to yet another platform. In the case of Salesforce.com, their success can be attributed to the fact that they are a SaaS company, that owns a key business entity in companies – i.e., customer. With that under their management, it is easy to cajole companies to build extension applications around that key entity.
5. Governance: As with all things cloud, the elephant in the room is governance. With SaaS, it is clear whose throat will get choked if things fell apart. With Platform-as-a-Service it gets a little tricky. If things fell apart, is the developer who built on the platform going to be blamed or the platform on which it is built or the third party infrastructure that it is built on going to take the blame. Here are three things that I think the would have to happen to allay those fears
   1. An independent body akin to Better Business Bureau model that grades the platforms for their reliability.
   2. Ownership of SLA by the Platform provider irrespective of who the infrastructure provider is.
   3. Disclosure of the underlying technologies used in the platform that corporate architects or third party reviewers can review to get comfortable. Under strict non-disclosure obviously.

If you are a startup

As Brian Jacobs (@brian_emcap), General Partner at Emergence Capital Partners, pointed out to me, one of the most important considerations for startups thinking of building their application on a standard Platform-as-a-Service is thinking about their eventual exit. Here are couple of things to get you thinking on that front.

1. You might limit of your chances of getting acquired based on the platform you decide to base your application on. For example: A company built on Force.com might not be appealing to a company that has its own platform like Microsoft or Google.
2. The issue of Intellectual Property might get a little challenging. You will have to sort that out before derivative work on the platform is created. How does the ownership transfer happen? Case-in-Point: If SAP acquires a company built on Force.com does it get to take the application and customers to its own platform? or more importantly can it?

In conclusion, there are is a lot of value to be derived from a platform-as-a-service but more questions need to be answered.

Now let us look at the reality. Despite all the hype and promises of cost efficiencies and barrage of me-too announcements we get daily from technology vendors purporting Cloud capabilities, all the evidence around usage of  Cloud services points to it being limited to

1. Early stage startups building edge-apps or small business focused applications. (Okay, I know there are some exceptions and they are anything but)
2. Enterprises replacing file shares with cloud based storage for redundancy, backups.
3. Enterprises conducting a proof-of-concept/R&D projects on cloud based computing power before building the real-thing in-house.

While the value of Cloud is definitely the way of future, I still do not see any real evidence of large scale customers moving their mission critical technology deployments on to the cloud based infrastructure. Not just yet.

In fact, there is no evidence that Big 4 SaaS vendors Salesforce.com, Intacct, NetSuite, SuccessFactors themselves don’t claim their services are based on commercial cloud based infrastructure. Note: I will stand corrected if someone from those companies can provide some facts.

In this three part series, I will focus on the Infrastructure-as-a-Service (IaaS)  and try and establish the needs yet to be met before a wider, large company adoption can be expected. In the follow-up posts, I will delve into PaaS and SaaS related challenges and needs.

Infrastructure-as-a-Service (IaaS), for the uninitiated, is the delivery of IT Infrastructure capacity as a service. Companies can consume ubiquitous elastic Computing Power, Storage Capacity, Network Capacity, Security, Backup, Redundancy on a usage based subscription fee.

IaaS aims to relieve companies from the burden of

• Having to make large capital investments in IT Infrastructure to build capacity and consequently move to a more predictable OPEX model in tune with your business needs.
• License, Install, Upgrade and maintain all software
• Buy, Configure, Upgrade and Maintain Hardware
• Hire and Retain teams of System Administrators, Network Engineers, Database Administrators
• Negotiate and Maintain Vendor contracts.

All these capabilities delivered by achieving unprecedented economies of scale by using commodity hardware, open source software, virtualization and continuous automation.

All the virtues listed above and then some make for a undeniable value proposition. So why all the concern and inertia in large scale adoption?

Large enterprises work in cycles that are much slower than the pace of innovation in industry. With good reasons, I might add. IT has become the backbone of running any business today and changing that in-flight is akin to changing the foundation of a house that you continue to live in. So, not withstanding all the catastrophic predictions by the so-called experts, for those not embracing the Cloud, we should carefully look at the reality.

I will use GE as a prototypical large global company with heterogeneous businesses, each with its own demands, technology and resource footprint. So if I am Gary Reiner and I am considering to move the GE IT infrastructure to Cloud based services, here are somethings I would definitely seek answers for

1. Given that I will not be moving my entire IT portfolio to a single Cloud provider, how do I keep my Cloud Deployments in sync? Are they interoperable? Can I move things from one cloud to another? Can I move a VMWare vCloud app to Amazon? Do I need to maintain multiple flavors of them if I use different cloud vendors?
2. Can I move workloads from one cloud provider to another? Or can I burst workloads from one to another to meet seasonal or periodic demands of the IT infrastructure? Think Best Buy during holidays.
3. Can I get guarantees on the performance, latency that I get from my dedicated network?
4. Do I have robust tools to manage the various cloud platforms out there? Can the same set tools work for all the cloud platforms?
5. Can I meet the governance mandates, I have around SOX, HIPAA, PCI-DSS? Can I have control on defining access policies to the data all the way to the storage?
6. The most important, can I tie the Quality of Service that I need to provide to the business, with the elasticity of the cloud. Especially, given that the cloud provider’s architecture has been built to provide a particular service and not envisioned as participating in another transaction.

Let us go through each of the points in detail

Interoperability: As with any new technology, the cloud standards are yet to mature, if at all. Each infrastructure-as-a-service vendor is pushing their own standard implementation API – AMI for Amazon, vCloud for VMWare. They do not have standards for a common API that service providers or application vendors can integrate into to access those services. Standards around security, cloud security, infrastructure protocols and data artifacts are still in the early stages in DMTF, the working body that is making an attempt to draft standards. Cloud interoperability standards that result from their work it is hoped will reduce lock-in and increase agility for cloud computing adopters taking advantage of a multi-provider, mixed cloud environment.

Portable Workloads: Given that companies have different applications that meet different needs, their capacity and scalability needs might be different too. It is fair to assume that companies would have a federation of clouds to manage different needs – much the same reason companies have multiple internal networks to compartmentalize things. The departmental lease management application, core financial application and the corporate data warehouse all might be hosted on different clouds if not different providers. If a company decides to use a hybrid model with some of those applications in house and spare capacity for them on cloud, today it is not possible to burst out workloads from one cloud to another or from an internal network to the cloud. This goes back to the lack of standards.

Network Latency:  In the new soon-to-be-all-in-cloud world we will all be accessing the applications through the good old internet. This is like saying we will all take the same freeway to work in the morning. So every time there was the Victoria Secret live broadcast on the internet we will all be log jammed on our way to the critical application we need access to finish work. This today is less of an issue since most large enterprises have dedicated networks and WAN optimization implemented.  All the SLAs provided by the IT to business and Cloud provider to the IT organizations is moot if the packets don’t travel fast enough. Another kind of Net Neutrality discussion you say?

Manageability: Most of the enterprise applications that are managed on-premise today have sophisticated tools from System Management vendors like HP, BMC, CA that allow you to manage almost all the aspects of the enterprise IT footprint. Once we move the applications to the Cloud, most of those system management tools, configured to your current environment might not work. Load Testing, Monitoring, Quality, Configuration Discovery tool vendors do not openly claim to support cloud based deployment. Most of this goes back to the fact that there no standards for Cloud APIs. Adapting the tools for each cloud provider is a R&D spend tools vendors have not committed to.

Data Governance: In the hyper optimized virtualized environments in which the Cloud platforms operate (they have to so they achieve economies of scale) data is virtualized, sharded, replicated, cached. This brings the very critical needs around data retention, protection, purging, access requirements mandated by SOX, PCI, HIPAA that large companies need to comply with. The current cloud vendors save some announcements do not openly claim they are ready to sign SLAs to agree to these needs. The Cloud platforms today do not have the quality of tools that are needed for companies to dive into the logs, access and troubleshoot.

Availability and Reliability: Unplanned outages in Amazon, Google are but rare publicly discussed occurrences of Cloud Service reliability issues. Those kinds of odd occurrences can happen even in a private network. But when you talk about multiple large customers co-locating on the same infrastructure, it raises concerns of many more of those outages. The Cloud architecture that are available today have been designed with a certain set of assumptions of how applications work. Case-in-point,  Amazon.com has no understanding how SAP Payroll system would work, neither are they interested. So not having an understanding of application workload patterns, architecture any SLA provided upfront is meaningless. Without tying the Quality-of-Service(QoS) metrics that you have in place for your customers/business and the SLAs being signed with Cloud vendor there is no way availability can be guaranteed. If you consider the scenario of multiple clouds or hybrid clouds then the integration of SLAs between all of them and tying it to QoS is practically impossible. Service credits to compensate for the lack of availability, by themselves, might not guarantee his/her job for the CIO who made the decision to move to cloud.

I know an argument could be made as to how things like portable workloads are handled today in an internal network, if at all. I admit, companies are probably not geared to handle these needs today, whilst on their own network, but then if we discount future needs then all the switch-to-cloud would bring is a like-for-like swap,  a cloud network for private network. The cost advantages that cloud brings will be offset by the loss of existing investment. So what gives?

I also hear people talking about companies not being ready to absorb sunk costs into legacy IT infrastructure as the reason behind lack of cloud adoption. To which I say – I don’t see people swapping old perfectly well-functioning cars/houses for new energy efficient ones. Maybe a cash-for- clunkers program is in order here too.

If at the end of this elaborate post, if it seemed that I am a tad bit anti-cloud, I am not. I am a die-hard fan on the cloud computing. In fact, I am one of those who thinks – IT shops have no business building custom applications, regular companies have no business building their own power generators and people like me have no business buying a cow when all I need is just milk. The world works best when specialists are left to do things they are the best equipped to do. That said, I would tread carefully and evaluate my risk before making bets on next best technology innovation since slice bread.