Enterprise interest in clouds grows with new use cases and service-provider offerings

William Fellows, Antonio Piraino & Csilla Zsigri, The 451 Group

We noticed a real uptick in the enterprise appetite for cloud computing through the summer and into fall. The sheer number of organizations now testing applications in public clouds means enterprise end users that don't have some kind of cloud strategy risk falling behind the curve. The availability of a growing number of enterprise capabilities from cloud service providers, and in particular the continued buildout of Amazon Web Services with VPC, its virtual private cloud offering, has accelerated interest and momentum. Indeed, the influence of Amazon on this market cannot be underestimated: whether or not AWS is being used, organizations see Amazon as a benchmark, if not a gold standard, for the cloud.

Partly as a consequence, IT shops are seeking, if not being asked, to provide internal customers with services that mirror the cloud 'stack' of infrastructure as a service (IaaS), platform as a service (PaaS) and SaaS. Imitate, replicate and emulate – this is what end users are doing to try to achieve to the same benefits, even if they can't use clouds. They are also using the cloud to reduce project lead times; to test applications at scale; enable recovery environments to be created on demand (and therefore decrease the need to invest capital in disaster recovery); and provide integrated workspace services (e.g., mail, portal, collaboration, messaging, remote meetings). These have all been key use cases.

To this end, at recent industry conferences (and they are innumerable, in physical and virtual forms) it's clear that IaaS and PaaS are not the only things that enterprises are looking for when it comes to cloud services. Indeed, substituting heavily configured internal architecture for these environments is clearly not the most palatable thing in the world for many, at least in the short run.

Rather, applications as a service and SaaS are found to be a spear tip – internal applications that don't contain very private or security-sensitive data but are specific to business operations are often first in line to be migrated. Back-end (OLTP) databases and core processes, otherwise termed 'the crown jewels,' are not yet candidates. General Motors, AP Moller-Maersk Group and GlaxoSmithKline are good examples of companies moving in this direction. They either are, or are looking to, source workspace services from cloud providers as a broader package than individual SaaS offerings. SHL Group Limited transitioned from manual paper-and-pencil testing to online testing, which cut project testing time dramatically. It even had its IT staff paying for use of Windows Azure with credit cards, in order to run the national testing facility.

The point here – or the tip – is that without exception, these initial engagements lead to discussions about how the cloud, in other forms, could help in other ways. Moreover, it appears that experimentation with basic applications in the public cloud and 'planning' for eventual bridging of internal and public clouds is happening across most industry segments. One difference seems to be the amount of time that users think it will take for public clouds to overcome barriers to using them. Here, time frames start at a year and go out to five years, but this is well within the procurement planning cycles of large IT organizations.

Over this same period, we've seen the likes of AT&T, BT Group, Colt, Verizon Business, SunGard Availability Services, Reliance Globalcom, salesforce.com and Interxion join and push the conversation forward.

SunGard

SunGard for one – although making a strong showing of its new managed hosting services – is attempting to blur the lines between managed hosting services and cloud services. In London, taxis display the encouragement 'get your aaS into gear.'

If it lacks elasticity in its services, SunGard may have a point in its approach to the market. Enterprises are asking questions about the cloud and what cost benefits, flexibility and agility it can bring to their business. If the end result is that these elements can be delivered effectively, the enterprise will likely be satisfied by a managed service, be it cloud or not.

Colt

Traditionally a telecom supplier, Colt's Enterprise Cloud marks the beginning of its push to grow its managed service business. The time is right, it believes: a survey shows that although 56% of European CIOs are not familiar with cloud computing, of those who are, 77% have implemented or are considering implementing cloud computing services. Colt is therefore offering customers the ability to use its dedicated IT infrastructure, virtualization and cloud computing as part of a hybrid system. Colt is predominantly focused on delivering managed services to SMBs, mid-tier and large enterprises.

What's surprising about the billion-dollar company is that 80% of its business is at the lower end of this spectrum. This explains why its enterprise cloud platform starts with Colt Managed Workspace, which hits a sweet spot of appetite with access to 'on-demand' remote desktop applications including Office, SharePoint, Visio, Project, Messaging and BlackBerry.

The second phase of the Enterprise Cloud is Cloud Infrastructure Services utilizing virtualized servers on a shared or dedicated infrastructure with server-based storage and backup. Third is Colt's Managed Application Services giving customers access to shared and dedicated resources that can offer guaranteed performance via application service-level agreements. Colt bundles a networking component too. Besides its horizontal cloud services, we expect Colt will tailor offerings for finance, professional services, media and public sectors.

Verizon

Verizon Business has spent 18 months working on its cloud platform. The company says it is beginning to see the fruits of its labor across Europe, and now even more so in Asia. Its computing as a service comes with a contract that contains a variable cost component and can take three to five days to deploy, but that is mostly due to the type and size of IT environment that is being moved to the platform. Integrating legacy infrastructure with new cloud architecture is tough. This is where the carriers tend to believe that the networking component of the infrastructure they bring to the cloud will be key.

salesforce.com

Force.com's reputation has grown much lately, especially in Europe and Asia. Schumacher Group – a $300m healthcare operator – started moving to the Force.com platform in 2006, and witnessed an 87% turnover in its workforce as a consequence, with a greatly reduced number of staff required. The company also runs its own private datacenters for some 25% of its business that includes databases with private records, and some applications. It has calculated that using salesforce.com gave it an employee ratio of 1:4 (cloud to datacenter operator), and with the applications running on Force.com, the ratio was 1:3, meaning a substantially decreased need for sysadmins. Speed of delivery on the platform increased 2.5x fold.