Fully Clouded by 2012?

Arthur Cole

A few weeks ago when I blogged about the end of IT as we know it, I predicted that virtualization and cloud computing would bring an end to IT infrastructure at small and mid-sized organizations, who would outsource these resources to regional dedicated data centers. And I still expect this change to roll out over the next 10 years or so.

But now it seems my view is starting to represent the slow boat in this matter. Gartner just issued a report that predicts that more than 20 percent of enterprises will have no IT infrastructure at all as early as 2012. To see such a rapid changeover in such a short time would be nothing short of incredible, which leads me to think that Gartner is looking at more than just the confluence of the cloud and virtualization.

And indeed, as you drill down into Gartner's analysis, it's clear that the company sees a massive shift of IT resources from in-house infrastructure to third-party infrastructure-as-a-service providers on the cloud. But that would still leave a fairly sophisticated infrastructure responsible for getting data from the cloud and onto employee desktops, no? Well, not if more and more employees start using their own devices -- home-based desktops, laptops, SmartPhones, take your pick -- as their primary means of collaboration, which appears to be happening more rapidly than cloud infrastructure is being provisioned.

All of this portends major changes across the IT spectrum, Gartner says. Enterprise IT budgets will shift from general-purpose computing to more strategic or goal-oriented projects. IT vendors will be tapped to migrate legacy resources onto the cloud. IT staff will need retraining in the new hardware/software distribution environment -- and the list goes on.

This signals a rather chaotic start to the new decade, if the company's timeline proves to be correct. And on that score, I think Gartner has overreached a bit. As EbizQ blogger Phil Wainewright pointed out, there are still many questions surrounding the cloud's efficacy as an enterprise solution. High-profile service interruptions, increasing network latencies and security concerns still relegate the cloud to a test-bed or non-critical application environment in the eyes of many IT managers. It seems highly doubtful that many organizations will feel so comfortable with the cloud in two years that they will entrust their very livelihoods to it.

In this business, though, we should never say never. If the transition to full cloud infrastructure is going to happen that fast, then those currently working in IT should prepare themselves for a pretty wild ride.

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Jan 17, 2010 6:42 PM Wireless Gaming Keyboard Wireless Gaming Keyboard  says:

Lets just wait and see what comes next, keep us posted.

Jan 18, 2010 11:13 AM Travasaurus Travasaurus  says:

All I know is that my guys aren't giving up their Cat 6 cables, Cisco routers, Dell Vostro Desktops and Windows Servers anytime soon.

It's all about "local" and they want to keep it that way...

Jan 19, 2010 10:26 AM Daniel S. Gurrola II Daniel S. Gurrola II  says:

I have been reading about "the cloud" being the next big push since the "overseas outsourcing" topic has lost momentum.

Gartner, while respected, is not for everyone. 20%? by 2012? "...no IT Infrastructure at all..." I'm going to keep my eye on this and keep an open mind, but I really doubt it.

Before Cloud Computing was Outsourcing and before outsourcing was JIT this and JIT that (JIT = Just In Time). Well JIT is still alive and well and driving our businesses as we know it. We only purchase what we need and when we need it and for as long as we intend to need it. This does not just apply to capital expenses, but human and cash expenses as well. We all feel the pressure these days of needing to do more with less.

In my opinion, for cloud computing to succeed the phone company (telecomm) needs to shape up. From city infrastructures to solid and knowledgeable sales representatives of telecommunications providers.

With that said, I cannot imagine any small to medium business having the wherewithal to properly investigate and implement a fully redundant and survivable path to the cloud. Newer developments in savvy cities implement dual paths from the phone company's equipment rooms (Central Office) to the premise. This is still not common. Wireless technologies have latency issues, but can be acceptable for shorter outages. That "last mile" is where most outages happen and must be resistant to outages. The outages that simply kill the daily operations of a JIT world.

2 years? 20%? move all servers, routers and switches and possibly the desktop (VDI or employee equipment) to a managed platform as well as possibly give up ownership of Information? Maybe, but only if this 20% solely uses mainstream applications and does not have serious bandwidth requirements and does not care where their information is at any given moment.

Someone in these small to medium businesses is already strapped with analyzing what they need to do to survive as it is. These same folks are going to do a due diligence TCO/ROI or they are going to drink the Kool-Aid. I say unlock the bathrooms because more than a few will drink and then need to evacuate the Kool-Aid.

I am sure it will come one day soon-ish. For now...I'll just keep my eye on it and listen to my company's needs and goals. If and when it fits it will become a part of our infrastructure after careful analysis of the product(s), our business requirements, security and compliance.

Daniel S. Gurrola II

Jan 20, 2010 9:02 AM Brian Kuhn Brian Kuhn  says:

Wow, this article is directly aligned with my thinking and worrying.  I run an IT services group in a large school district and we're seeing the shifts occur.  I would argue it's more likely 5-10 years out (see my blog post here: http://shift2future.blogspot.com/2010/01/future-of-it-services-part-2.html).  I think the points of convergence will be: (1) inexpensive and more bandwidth, (2) cheap to free PODs (personally owned devices), and (3) rich user experiences in the browser - check out Sumo Paint for example.  My blog talks about 3 clouds...  for free, for fee, and ours.  I think that's the likely state in 5-10 years.  Perhaps by 10 years the "ours" may disappear...

Jan 20, 2010 9:28 AM Steve Henty Steve Henty  says: in response to Brian Kuhn

I agree, there's going to be a major shift to the cloud. Although I doubt that we'll we'll be totally free of our infrastructure, I imagine it'll be a mix, depending on a number of factors. All this of course will need managing. But, I'm wondering if there's an argument, in some cases, for loosening our grip even further on the security of our applications. What if we were to hand over the authentication process to the social networks? I wonder if it wouldn't, paradoxically, alleviate some of the fears surrounding cloud computing. I published a blog post on this a few days ago:  http://www.henty.es/2010/01/15/the-missing-piece/

Jan 20, 2010 11:00 AM Dan Graham Dan Graham  says:

This a great and timely post, Arthur, and I certainly agree with your conclusion that 'it leads me to think that Gartner is looking at more than just the confluence of the cloud and virtualization.'   Having come from the Gartner Data Center Conference last month, the watchword from all the Gartner analysts was "get into virtualization now, but don't rush into public clouds."   I think if you add up web hosting, outsourcing, private clouds, and public clouds, then maybe 20% of enterprises will have no on-premises IT infrastructure.  But you will have to count the legions of small and medium business enterprises to get to 20%.  It makes more sense for small and mid-sized companies to outsource or use Software-as-a-Service clouds than for the Global 3000.   

One thing unique about clouds versus the other tectonic shifts in the IT market is that 80-90% of the cloud technologies already exist and have been maturing for years.  When you look at virtualization, broadband, outsourced hosting, web services, chargeback, etc., it's the intersection of these that is called "cloud" plus a few new things as well.   So unlike the internet or dot.com booms, clouds have quite a bit of undercurrent momentum.  But as you point out, the predictions seem to be a little over the top right now.

That being said, putting your data/data warehouse in the cloud requires some serious consideration.  Security continues to be the #1 worry in every cloud survey by Forrester, IDC, and Gartner. The public cloud vendors are working hard on this, but some won't even let your auditors inspect the site and their procedures. Some vendors are good guys, others will get you fired.  So while I am bullish on public clouds, be careful.

As the cloud vendors mature so will we all.  My company, Teradata, recently released the Teradata Enterprise Analytic Cloud composed of three IaaS solutions (public and private cloud) and a SaaS partnership. Right now, internal private clouds are probably the best bet for secure high performance data marts and warehouses. In terms of performance, however, it's still difficult to beat the flexibility and service levels a strong IT operations staff can achieve with a central enterprise data warehouse.

Dan Graham

Teradata Corporation

Program Director Active Data Warehousing

Jan 22, 2010 4:23 PM KLC KLC  says:

Arthur, you have hit the nail on the head, especially in your second to last paragraph, saying "High-profile service interruptions, increasing network latencies and security concerns still relegate the cloud to a test-bed or non-critical application environment in the eyes of many IT managers." The outages, especially, demonstrate a complete lack of enterprise-class maturity on the part of vendors like Google, Amazon, Microsoft, Rackspace, Salesforce.com, etc. As an example, the December BING outage was caused by a mid-week, mid-day change without an adequate backout plan. Ever heard of Change Management?  The repeated facilities issues pointed out abnormal single-points-of-failure that are not typcially found in enterprise-class data centers.

I do believe that an evolved version of Cloud Computing will eventually lead to some demise of internal IT data centers. My vision is of a network of regional megacenters interconnected with the last remaining enterprise data centers that provide compute and storage resources to all. It is analogous to today's power grid where data centers sell excess capacity back to the grid.  Obviously, a yet to be invented level of security would have to be invented before this is realistic.

This decade will definitely be exciting, but I'm not sure Gartner has the right playbook.


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