Flying through the cloud

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The concept behind cloud computing started off as ‘utility-based computing’, allowing a company to buy CPU cycles, storage and other IT resources. Advances in the area of virtualization and remote access (e.g. Server Based Computing ,HTML5) since then paved the road for more complex services to be delivered by using internet protocols.

Not only technicians have embraced the cloud concept. Marketeers have burned the midnight oil to translate the whole technology stack into ‘as a service’ solution (illustration 1). An overview of the cloud solutions offered.
  • RaaS: Rackspace as a Service
  • HaaS: Hardware as a Service
  • PaaS: Platform as a Service
  • IaaS: Infrastructure as a Service
  • DaaS: Desktop as a Service
  • DPaaS: Data Protection as a Service
  • MaaS: Mobility as a Service
  • STaaS: STorage as a Service
  • SaaS: Software as a Service
  • BPaaS: Business Process as a Service
  • AaaS or XaaS: Anything as a Service
For many of the mentioned solutions the marketing fluff still outweighs the underlying technology and value proposition. More mature are STaaS, PaaS and SaaS as a considerable vendor market and client base exist for those solutions. For other cloud services time and the market will tell whether they will enter the premier league or fade away.
Despite using different names, is the business model behind all cloud services the same. By standardization and boosting the utilization of its severs and floor space, a vendor of cloud services can offer lower prices. Where the average utilization of a standard datacenter is around 30%, push cloud vendors these percentages to 80% and higher.

The attractiveness of the offering is reflected by expected growth figures.  Research from International Data Corporation (IDC) indicates cloud computing for public use (e.g. GoogleApps) will grow from $582 million in 2009 to $718 million in 2014. Cloud services targeted for commercial use is expected to grow from $7.3 billion to $11.8 billion in the same time period.
The benefits of cloud computing for companies are improved flexibility and cost levels. Flexibility can be expressed in pricing structure, volume variations and service mix, but always within the boundaries inherent to the design of the cloud solution.

This means that also cloud computing does not offer a free lunch. Cloud services require companies to adhere to a strict mold and resembles in that sense the black Ford. This means that when deploying a hybrid model of cloud and company specific services, the cloud is leading. In other words, when hosting a company specific ERP solution on a Platform as a Service (PaaS) model, the application releases and support model have to be adjusted to the underlying platform. A concept considered the world up-side-down to most application professionals. The freedom to customize, cloud model and potential efficiency gains are depicted in illustration 2.


The benefits of cloud computing thus come at the cost of standardization and consequent inability of using those IT services as a strategic differentiator. As typically only a small part of the IT service portfolio can be considered of strategic importance, a considerable part of the portfolio may be suitable for a as-a-service treatment. Being able to look beyond the flashy marketing presentations is however a key requirement in order to pluck the benefits or run the risk of becoming a test bunny for your vendor.
Also this posting is part of the book I'm writing on orchestrating the IT value chain.

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