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Cloud Connect: Grappling With Economics

The adoption of cloud computing by enterprises is no longer considered an experiment, but debates still rage over terminology and costs.
Cloud computing is not a new technology, but a new model of delivering computing to end users, said IBM's Ric Telford, VP of cloud services, and IBM customers now believe that it will increase corporate agility and collaboration between employees and between the company and its customers.

The adoption of cloud computing by enterprises is no longer considered an experiment with a new technology. Rather, it's rapidly coming to be viewed as a continuation of the adoption of consumer computing patterns by IT.

"Cloud computing is inspired by consumer Internet services. Facebook has eclipsed Google as the number one site on the Internet," Telford said in the keynote address on day two of the Cloud Connect conference.

IBM operates what it considers a cloud data center in Research Triangle Park in North Carolina, its model "green" data center, which it will use to support its cloud initiatives, including offering Rational software development services. But so far, availability is limited as it prepares to ramp up, he said. The center runs IBM virtual machine images and in the future, will run other vendors' VMs.

Companies are finding numerous workloads that are appropriate for cloud computing. "A huge portion of IT is dedicated to development and test," Telford said. IBM tends to mention software development and testing as its first example.

In some cases, half the servers in a company are devoted to software development and testing, but they're idle 90% of the time. The cloud is also good for data storage, running desktop applications, collaboration apps, and analytics, he added.

Five years from now, hybrid clouds will be the norm. Open standards are required to enable mobility of applications between the on-premises and the public cloud, or between different cloud suppliers.

Relying on the cloud can reduce the labor cost of "cloud economics" and cloud technologies are real. Clients can achieve significant return on investment by adopting them," he concluded.

William Louth, CTO of startup JInspired, told the crowd that cloud services need finer-grained metering. JInspired, based in the UK and the Netherlands, produces software that probes, monitors, and meters services in the cloud.

Today, a bill from Amazon Web Services and other cloud providers looks a lot like a monthly utility bill; there's a total for the services used. What's needed, said Louth, is an application-by-application breakdown of how much each one uses CPU, disk, and network services.

In the future, the family washing machine will include a meter that tells the household the price of the power available to run the unit. Family members can then decide on whether they need the wash done or can wait for a time in the middle of the night when power is cheapest. Cloud services need to be provided the same way to gain the efficiencies implicit in the multi-tenant cloud model, he said.