Editor's Note: Interested in the Cloud, make sure you tune into ebizQ's upcoming Cloud QCamp right here.
Listen to my podcast with Jeff Kaplan, the Founder and Managing Director of THINKstrategies. Jeff is also the Founder of Software-as-a-Service Showplace and frequent contributor to the ebizQ Forum, and in this podcast we discuss cloud computing: where it's at, where it's going, and what it must do to keep growing.
Listen to or download the 9:29 minute podcast below:
PS: Now, I think as all of our readers are quite aware, cloud computing is getting a lot of attention right now. Where do you think the market and industry is at and where are we headed for both the New Year and the new decade?
JK: Well, in part, it all depends on how you want to define it. But overall, I think we have to say that cloud computing is still very embryonic but growing and evolving quite rapidly and becoming very pervasive throughout the industry because it's touching a variety of parts of both large-scale enterprises as well as small and mid-size businesses.
What does the cloud computing industry have to do to keep this momentum going?
Well, first of all, I think it does have to define itself a little bit better. I think the best definition that we've seen is the one that breaks cloud computing into three identifiable parts. The first being the most advanced or mature segment in the market which is the Software-as-a-Service component where we're talking about applications, mostly business application, that are being delivered via the web in the pay-as-you-fashion and are available to again organizations of all sizes across nearly every industry. That business is about a decade old now and has gained a certain level of maturity that it is also becoming much more mainstream.
The second piece of the cloud-computing puzzle is something that's referred to as Platform-as-a-Service, which is a set of development environments provided by a variety of vendor. Kind of a one stop shop development also via the web where organizations both size these as well as enterprises can in fact build their own apps, and either host them in the clouds, that is via the web or in a hosted environment, or in fact deploy them behind their own firewalls, and have them continuously updated via that Platform-as-a-Service offering.
But the one that really helped to break this cloud-computing world open and in fact, popularize it some across the business community is this idea of Infrastructures-as-a-Service, which has been pioneered by of all people, Amazon. And here is where the actual promise of SaaS and PaaS have really gotten to the full meaning of on-demand. And by that, I mean the fullest extent possible of being elastic. So not only can you acquire functionality in this case Infrastructures-as-a-Service computing power on-demand, but you can turn it off almost as equally as quickly.
So in the case of Software-as-a-Service, well we call it pay-as-you-go. You usually pay for a full year subscription. And for Platform-as-a-Service its very often has a long duration to it as well. But in the Infrastructures-as-a-Service world, you can actually pay by the MIP and pay by the hour and that elasticity that rapid elasticity that ability to in fact self provision this computing power is really what's gotten the world excited about the power of cloud computing.
Conversely, where are some of your biggest concerns for the dangers for cloud computing coming up as the market evolves?
Well, the fact of the matter is as I indicated initially, this is still a very embryonic movement and it's still something of a Wild West show. And by that, I mean, while these services are becoming more and more stable, and more and more secure. They're still are a fair number of outages and they still is concern about security although there hasn't been any infringement or infraction as far as that's concerned. But because it's still a relatively new business, of course, IT and business decision makers are justified in having some concerns around security and reliability as well as compliance and governance.
The good news though is that the vendors starting with the largest of them like companies like Amazon are quickly attempting to respond to those concerns with service level agreements, reporting capabilities and portals as well as ensuring the encryption of their services. But it's important nonetheless for the IT or business decision maker to do some due diligence about the services they're considering to ensure that they do meet the standards that they need to get the job done.
I'm glad you brought that up because what are some of the keys to success for the IT and business makers when actually considering cloud computing alternatives?
Well, the wonderful thing about this marketplace as I indicated is the on-demand nature of it and the fact that you can try it in small bites. In fact, in some cases you can try it before you even buy. This is a best practice that actually was perfected in the Software-as-a-Service portion of this marketplace and has begun to permeate other aspects so in the Platform-as-a-Service and now Infrastructures-as-a-Service areas as well.
Many of us have probably experienced that ourselves. Nowadays, if you buy a laptop or a PC, very often the vendor is giving away a storage service to go along with that to give you a taste of what that service is all about in hopes that you will convert to being a paying customer who can acquire additional functionality by virtue of that subscription service.
The same thing holds true with a variety of these cloud services. If it died by pure trial and then buy type of arrangement, at the very least is an opportunity to subscribe to these services in small increments, test them out in a test environment, see how they work, how they fit so your needs and then scale them accordingly. There's also the opportunity to use them to augment your internal resources to help you respond to spikes and demand for your services.
So in each of those ways, there are opportunities to incrementally experiments and evaluate these capabilities while mitigating your risk and minimizing the upfront investment along the way.
Interesting. Now to switch over to the vendor side, what are some of the keys to survival and success for a cloud-computing vendor?
Well, obviously, the first one is to have the right functionality that meets the customers. But more importantly than that, as I indicated it's all about being able to deliver it rapidly and in a flexible fashion, and to do it in an automated way so that it reduces the amount of human intervention that's required or as some people like to say makes it as frictionless a transaction as possible.
Now that's not only important because customers increasingly expect to be able to acquire both technology and applications on-demand and no one's better at trying to deliver that than Apple through its iPhone with the kinds of apps that are now readily available there. But that the standard has been set there also has to commoditize the marketplace. And someone once said that the web is a wonder thing, it does have this tendency to have a reverse alchemy capability, meaning the idea of alchemy is you take lead and you turn into gold.
Well unfortunately, in many ways everything that the web touches it turns gold into lead, and commoditizes, and sucks some of the intrinsic value out of it in terms of its pricing value. And therefore, if I'm a vendor, I have to be thinking about not only having competitive functionality, and competitive delivery capabilities, but be able to back that up with the right kind of automated provisioning processes and support at a price that's competitive as well, all those adding up to some very, very serious challenges long-term for many of these companies.
So that's why we at Think Strategies firmly believe that while we're seeing a proliferation of players evolve today much like during the dot-com era. Inevitability, we're going to see a shake out sometime in the future that users need to be cognizant of and therefore they need to make the right choices only on functional terms but in looking at the financial viability of the vendors as well.