Is Cloud Computing at an inflection point in the UK market?

Something is very definitely happening in the Cloud.  There are too many initiatives together in the UK this month to be mere coincidence, so it's my belief that the topic might not be on the verge of going completely mainstream, but it definitely is at an inflection point and about to break out of what Gartner would call the hype cycle so that it becomes significant.  The upcoming Cloud Computing World Forum on the 22nd which I'm chairing (more of that in a later post) comes at a perfect time to help explain and demystify the topic for the UK market.  Before then I know there will be an announcement of an initiative with a distinctly European flavour, and then on the 28th the Intellect SaaS Group will be launching a white paper aimed at making the business case for SaaS for decision makers in all sizes of business.  Yesterday I was at Softworld, attending a Cloud Computing panel session and visiting all of the online accounting players gathered in one corner (or ghetto as someone described it) of the exhibition hall.  It's very difficult to avoid weather allusions at this point, but you have to admit there is a lot of it about.

During this year the Cloud Computing term has had a mixed press, with as many enthusiasts presenting it as the future of IT, as detractors who are concerned the term is being overhyped with marketers keen to capitalise on use of the label on their products wherever possible.  As always, the truth is between the two extremes.  The benefits on offer mean the Cloud needs to be seriously considered as a technology choice for anything from small businesses through to IT departments in large organizations.  However, at that Softworld Cloud panel session I mentioned, after half an hour of introductions and explanation from representatives of CODA, Mamut, salesforce.com and NetSuite, Richard Messik of Vantis asked the panel if we are going to get the message across to business people when all the audience had heard so far was jargon.  His interjection was spot on.  Richard is a big Cloud and SaaS fan - his practice has been offering online solutions to their clients for over 5 years and so he speaks from real world experience.  

So what is this Cloud term all about?  As usual with IT everything is cyclic and many of us remember bureau systems, hosting or ASP.  Way back in 1966 Canadian electrical engineer Douglas F. Parkhill wrote The Challenge of the Computer Utility, where he predicted that the computer industry would work like a public utility:

“in which many remotely located users are connected via communication links to a central computing facility.”

The Cloud term itself has been around since 1999 to describe access to resources somewhere on the Internet, but the meaning has now coalesced to cover  three broad categories of services using the power and flexibility of the Internet as their delivery mechanism.  They are:

Infrastructure as a Service (IaaS) is an evolution of traditional hosting and provides server capacity and storage.  This is utility style computing, where customers can buy the power they need as a fully out-sourced service without the IT management headaches, and with the flexibility that the resources can be quickly scaled up or down to match demand.  

Platform as a Service (PaaS) means a web hosted application development platform or framework, without the cost and complexity of buying and managing the layers of software and hardware required .  Web applications and services can be  prototyped and tested rapidly, and then scaled to a larger user community.  

Software as a Service (SaaS) is a catch all term for business applications and services provided over the web.  The term covers a range of possibilities from ERP style business applications, to collaboration and productivity tools, to plug-ins for application components like payment gateways or mapping services.  

SaaS and Cloud based applications have been available for some years with the success of salesforce.com's CRM application often mentioned as the "poster child" for the topic.  A few weeks ago V3 quoted my friend David Tebbutt of Freeform Dynamics explaining their survey of 477 organisations last year which  suggested that although 49 per cent were not yet using cloud computing, 41 per cent were using some cloud resources on a piecemeal basis, and 10% were adopting it enthusiastically.  

So here are a few more Cloud related "events".  In that article, Freeform Dynamics were launching their Cloud Computing for Dummies book, backed by Microsoft (you can request a copy via techaudience@bitepr.com).  I've already mentioned the Intellect SaaS Group, a technology trade association group formed to promote the topic to UK business.  Three months ago BASDA, the Business Application Software Developers Association, formed a Cloud SIG (Special Interest group), and they are also targeting publishing materials by the end of this year.  During this year there have been significant offerings announced by Amazon, IBM, Microsoft, VMware and many others.  All of this activity around the Cloud and SaaS topic highlights that over half of businesses and IT departments are considering it, but I am convinced there is still plenty of confusion over the basics for the average business person.

I'm afraid it's too easy for evangelists and enthusiast like me to fall in to the trap of focussing on the technology, or for the buyer to ask whether they should be considering Cloud technology.  The real issue is what are the business benefits.  There are significant benefits to be had where providers can make use of the economies of scale and sharing resources across their whole customer base so that costs are reduced for each individual customer.  Applications can be more easily and quickly deployed and the risks reduced by rapid provisioning, testing and proving of a small pilot, which is then rolled out to a larger user community.  The Cloud vendors have a completely different approach to the software life cycle, with continuous improvement rather than the timed and potentially disruptive, major software releases of the traditional vendors.    

As well as those basic benefits, there are  more potential advantages that come as a natural by-product of the Internet based approach.  Business application providers are learning from the ease of use of consumer products like Amazon, or the web 2.0 functionality and interactivity available from social networking and sharing sites like Facebook, Twitter and Flickr.  They are beginning to socialize their business applications, offering more collaboration functionality, or the ability to reach out and connect with customers, partners and suppliers over the web.  In addition, now that energy use and green IT issues are coming to the fore, the Cloud offers potential benefits for reduced consumption there too.  

There are, of course, still plenty of challenges.  With companies adopting a mixed approach, interoperability between web services and in house systems becomes important.  How safe and secure is the data, and are security, compliance and data protection being handled properly?  How easily can my company data be retrieved in a usable form to allow switching to an alternate service?   What different questions does the buyer need to consider when looking at Cloud Computing provider compared to a traditional IT supplier?  Over the coming weeks I'll be getting in to the Cloud in much more detail and trying to answer some of those questions.