Seeing Through the Clouds

From the opening moments of the plenary session when the audience dubbed cloud services as their top interest, the focus of this year’s TM Forum Management World Conference in Orlando was clear:  Service providers and their suppliers are moving rapidly to understand how to apply the cloud to their businesses and monetize the resultant services.

In May, at TMWorld in Nice, attendees were skeptical of cloud hype.  In Orlando, the pace of experimentation was apparent and a flurry of announcements confirmed that SPs are rapidly becoming cloud services providers.  Google and Amazon have been joined by substantial  AT&T and Verizon offerings, with more sure to announced soon.

As a result of these sorts of offerings, experiments range from using external public clouds for application dev/test and data storage to private clouds for on-demand services for the full range of internal IT needs.  And while everyone is talking about hybrid clouds that link internal and external cloud environments, a few (my company, CA among them) are actually doing that.

Nonetheless,  the accelerating hype breeds skepticism.

Providers and their potential customers are still not clear about how rapidly cloud services will become mainstream.  There is clearly an adoption cycle that reflects maturity both of the offerings and of the ability of individual users to successfully take advantage of them.  Almost everyone is still experimenting. (The single largest exception may be startup companies that have flooded to cloud computing offerings to avoid creating internal IT staffs and compute capacity, who have adopted cloud-based services such as salesforce.com or cloud-based  HR and financial services  -- enabling them to avoid “overhead costs” that divert scare capital away from product development, sales and marketing.  Extinct is the VC who will allow a young company to spend on building its own data center for development and operations.)

Even as experimentation accelerates, and before large-scale deployments actually occur, most observers as well as cloud providers agree with an emerging consensus that  the typical cloud deployment will be a hybrid model.  As cloud users build out their internal virtualized data centers and provide on-demand services for their internal users, they will rely on external clouds to cover peak demands.  Obvious examples cited in numerous presentations were:  retailers and e-tailers that need extra capacity on Black Friday and Cyber Monday at the start of the holiday shopping season.  But all IT users have such peaks – weekly, bi-weekly, monthly, quarterly, annually -- regardless of reasons.  And CFOs and CIOs are saying:  Why build for the peaks and leave much of the capacity idle or underused for the majority of the time when we can purchase what we need when we need it from external suppliers?  “Just in case” thinking about IT capacity has shifted to “just in time” models – as it has in so many other areas of business operations.

But many presenters said the peak-demand based hybrid would rapidly evolve into an on-going hybrid where more and more IT departments would rely on external cloud providers for continuing support of non-core functions, such as data conversion and storage, as well as peak-load compute power.

This will create a permanent link between internal private clouds and external public clouds, where the boundaries of the traditional IT environment are stretched and blurred, creating new and interesting challenges for the traditional IT management and security disciplines.

While security in its many facets remains a major concern, opinion appears to be moving toward a consensus that security of access to and of data in cloud environments will be “at least as good” as in private data centers.  Some find this comforting---others scary.

SPs who have rolled out various early cloud services offerings are already hearing from their initial customers that they expect to be able to use the same management and security policies and systems and ITIL processes in hybrid cloud environments as they use internally or in private clouds.  They want the same levels of visibility and control over “their resources” as they are used to in internal IT and network operations.  They expect their tried and true methods to extend seamlessly into the hybrid cloud.  It is yet to be seen if they will be more tolerant of variations in managing  “just-in-time” capacity from a public cloud.

Conversations in the hallways as well as in panels swirled around how SPs can differentiate their cloud offerings.  Two answers appear to be emerging:  Cloud services providers will specialize on what services they actually offer and will back them with demonstrable brand value; and they will differentiate the quality of the offered services by the quality of management and security they provide to their customers --- both in reporting validation of SLAs, and in actual visibility and control.  But these are very early days and the conversations are still very speculative.

A key initiative to help accelerate adoption of cloud services was announced by TMForum in Orlando.  Drawing together major technology and services providers with a core group of major enterprise customers who form the Enterprise Cloud Buyers Council, the TMForum cloud initiative also draws in other industry organizations including the DMTF and itSMF.  Founding members include AT&T,BT, Telecom Italia, and Telstra, CA, EMC, HP, IBM and Microsoft, Cisco and Nokia Siemens Networks.  The charter is to accelerate commercial availability and adoption of secure and managed cloud services.

So, while cloud hype clearly remains, it no longer dominates.  Real, demonstrable, substantial projects are underway and global companies are making significant cloud-based services available in the marketplace.  One can’t help but wonder where all this will be at the TMForum  conference in Nice in May 2010.