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Cloud Computing in Consumer & Business Sectors

It is certainly true that many people, particularly in business, would like a clear definition of cloud computing. As a report and survey from industry body CompTIA, 'Cloud computing: pulling back the curtain', says, both the industry and end user communities "crave a more authoritative, uniform definition of cloud computing to help them determine how best to exploit it from a business and technology perspective".

It too points to the definition from the National Institute of Standards and Technology (NIST), as discussed on page 7, and it is worth adding the full list of characteristics and models in the definition (see also the glossary, page 96 for explanations of most of these terms):

Essential characteristics
  1. On-demand self-service
  2. Broad network access
  3. Resource pooling
  4. Rapid elasticity
  5. Measured service
Service models
  1. Software-as-a-service (SaaS) 
  2. Platform-as-a-service (PaaS) 
  3. Infrastructure-as-a-service (laaS)
Deployment models
  1. Public cloud 
  2. Private cloud 
  3. Hybrid cloud 
  4. Community cloud 
The NIST model has the benefit of simplicity, but inevitably there are many more detailed attributes of cloud services that are confusing people, which is not surprising at this early stage of the evolution of cloud computing. But users in organizations are starting to form a consensus on what they 'strongly associate' the cloud with, says CompTIA, namely 'offsite', 'Internet centric', 'shared', 'scalable', 'software-as-a-service' and 'virtualized resource'.

What is not confusing is the sheer scale of the projections for the size of the cloud computing market, as the analysts are all agreed that, definitions aside, users will be voting with their feet and fuelling a global market worth more than £100bn by 2013 with a major component being the use of cloud software applications such as those from Google and Salesforce.com, the customer relationship management specialist. One analyst, Gartner, has predicted that 20% of all businesses will own no IT infrastructure by 2012, and will be virtually total cloud users.

That's particularly true for smaller companies and start-ups, as the kind of cloud services they can use to run operations are similar to those that have gained rapid ground in consumer markets. Sole traders, small companies and also hobbyists and casual users are all making great use of cloud platforms such as eBay, Amazon and PayPal to conduct day-to-day business with nothing more than a laptop, Internet connection and a bank account.

Cloud for consumers

And even a smartphone or tablet will do -the cloud services that will dominate in the consumer market are mobile applications, driven by the huge success of products such as Apple's iPhone and iPad, and the Android standard adopted by other handset players. News that created much interest in August 2011 was the proposed buy-up of Motorola's Mobility handset business by Google, which points in one direction only - that of a near future where huge public cloud applications such as those of Google will be seamlessly available on your smartphone wherever you go.

It is no surprise that Apple, meanwhile, planned to launch in autumn 2011 its iCloud- "cloud service done right", as the giant firm says. iCloud is a replacement for Apple's previous cloud efforts, but clearly the company now feels confident to pitch its offering badged as a cloud service ('MobileMe' was the main earlier version for productivity applications). It has now brought together all its online services productivity such as mail and contacts, the iTunes media store, online backup and storage, and access to new applications- in one cloud that services users automatically as they move around (in a so-called 'push' way).

It’s also free to Apple customers, in the same way that people can already make use of free mail and considerable amounts of storage with services such as Hotmail, Yahoo and Google. Apple which briefly became the world's largest company in August 2011- is great at engineering an almost fanatical user experience, and it rarely gets its marketing wrong these days, so the ubiquity of a personal computing and media cloud is likely to be taken for granted by many in the next few years.

What the company will have to rely on though is a large network of partners to deliver its experience, especially the mobile phone operators and their many suppliers of base station equipment, transmission technology and customer provisioning and billing systems. Experience of the mobile cloud, in particular, can be easily skippered if you can't get a signal at a vital moment, or you get a massive unexpected bill, and it's no surprise that poor customer service is now to the fore as people migrate into increasing use of mobile data and cloud services.

That mobility is the key consumer cloud area is borne out by research firm Business Insights, which predicts that mobile applications will make up almost half of the market for revenues by 2018. "Mobile applications and services are set to drive the growth of consumer cloud services, as consumers demand 'always-on' and ubiquitous access to data, entertainment and services," it says. Next, and as some may not be surprised to hear, is online gaming, followed by 'voice over IP' (i.e. Internet telephony services such as Skype), and paid music content. In terms of revenues, services such as email and online storage barely figure, as they look set to remain free or very low cost.

Cloud for business

Patterns of use for companies and organizations in the public and third sectors are also becoming apparent, with Comp TIA, for exam pie, noting that a 'sweet spot' for cloud adoption is in the medium sized company sector (say between £10m and £100m in turnover). This is because they have similar IT needs to large enterprises, but less cash for on-premise systems, and so can deploy cloud computing instead as an operational expense with a more predictable cost model.

Reducing capital expenditure and other costs is often the number one reason for moving to cloud computing, but coming in second is the desire to add new capabilities that just aren't available otherwise, and this key factor must surely rise to the top as more organizations discover just how transformational the cloud can be for business processes. Indeed, in another survey of SMEs alone, the benefit of expanding capabilities does come out ahead of cost savings.

Other factors for deploying cloud are the speed with which it can be rolled out, simplicity, subscription pricing, an end to conventional software licensing, and lower energy use. Pertinently, cutting internal IT staff, while a factor for some, is not a major reason for cloud, suggesting that these workers may be better deployed on IT activities that really help the business rather than traditional IT pursuits such as 'firefighting'.

The type of service that companies are mostly deploying are software-as-a-service (SaaS) offerings - in CompTIA's survey, of those using the cloud 69% have a SaaS product in use, 31% laaS and 22% PaaS, although the latter two may well be part of a SaaS solution in a managed service provider's data center.

Indeed, a majority of user organizations plan to source their cloud computing from a third party provider, above self-service/direct from the Internet, or direct from a technology vendor, suggesting that there is plenty of scope still for skilled IT providers that can add value, say, by packaging cloud software into private clouds for superior and more secure service.

As far as types of provider go, there are various models that include:
  1. Public cloud provider with own data center
  2. Private cloud specialist working with customers to build internal clouds
  3. Hybrid provider of private and public clouds hosted in own or third-party data center
  4. Reseller of cloud services (e.g. SaaS). 
Going it alone But of course there is nothing stopping any organization signing up direct with a cloud software player such as Salesforce. com, although it may be wise to employ a consultancy that can adapt the company's business processes to work with the cloud offering, as it will rarely be the case that it will go smoothly 'out of the box' - there will be set-up operations that need to be carried out.

As for the applications and services that companies are taking up in the cloud, there are certain offerings that are ahead of the pack, in particular storage and backup, and email (see also above from an SMB - small and medium sized business- survey). Storage is one of the most widely offered cloud services, which is not surprising given its relative simplicity and value in providing offsite peace of mind for data. Most firms will have taken up cloud storage and backup in some form in the next few years.

Email too is pretty much standard as a cloud service now, and is often coupled with value-added extras such as spam and virus management. Indeed, security services on the Internet is a class of cloud offering in its own right and one that has been a big growth area for specialist providers. Extra security measures and policies are vital when moving to public cloud services, in particular.

Other applications are less popular right now for the cloud - CRM though, as pioneered by Salesforce.com is a favorite, and others such as document management and collaboration have strong showings. Content management generally - as organizations do battle with growing disparate data mountains and increasingly mobile workforces- is clearly a winner for the cloud.