Cloud on the Top of the Hype Curve

I know there's a lot of talk out there about the Cloud and how hyped it is.  It's true.  If you look at Gartner's latest Hype cycle on Emerging technologies, you can see where they place it: literally at the top of the cycle. 

But that's OK - A lot of hype means a lot of awareness. As a vendor this adds wind in our sails and as a customer it makes it easy to find the content that will help make informed decisions.  In fact, last I checked, the term 'Cloud Computing' was yielding over 34 million hits on Google.  Sounds like lots of information for folks who want to learn more.

Another popular topic about Cloud is how long will it take to become a significant movement.  Well, if you believe the leading, trusted analysts in the space like Frank Gens from IDC (I know I do), he already puts the Cloud market -- and let's be specific -- this is the market for External Cloud services (not 'private cloud' spending) at $15.6 billion as of 2009.  That's a big Total Addressable Market.  Far bigger than many segments of IT as we know it today.   And the growth rate is expected to be 27% annually between now and 2014, with some areas such as Cloud Storage racing ahead at a 37% compound annual growth rate. 

Let's look at just Cloud Storage.  According to those same IDC numbers, it's already 9% of the market, and at the current growth rate, that would make it about $1.8bil this year.  That's almost as large as the entire SAN storage networking market, and growing far faster.  Projecting forward, by 2014 Cloud Storage spending will exceed $7 bil.  And by that time external Cloud spending will account for 10% of the IT budget. 

So some are saying Cloud is over-hyped.  Some, that it's under-hyped.  I'd say it's about right for where it is in its maturity.  The perception for some is that Cloud is just for deep file archiving, Test/Dev and limited web-based development.  In reality, early adoptors are already running 60-70% of their business apps in the cloud.  We're seeing the Government laying the groundwork for serious investments in Cloud-based services through programs such as FedRAMP.  And enterprises are swarming shows like VMworld to understand the art-of-the possible, and continue to build upon their internal 'cloud' efforts to be able to extend them towards carrier and service provider clouds.

So long as Cloud vendors continue to deliver capex and opex savings, improved efficiencies, decent quality and security, and fast time-to-solution, then the growth will continue, with or without the hype.

Cloud Storage Optimization market

A new product category is shaping up in direct response to a new customer need.  As seen in recent stories like "What's keeping Data Storage Out of the Cloud?", companies want to use new Cloud Storage services from providers such as IBM, but they are concerned about the security, availability and cost of the required network connection.  Enter Cloud Storage Optimization.

To bridge this network gap customers face a number of sub-optimal alternatives:

1. Don't worry about it -- probably the most popular approach, which only works if you don't care about your job, or the value of the data going across the wire is so low that it's not a big deal if it takes forever for the transit, or it's hacked, or both.
2. Lease a private connection -- this is an option for 'too big to fail banks' or other major organizations where cost isn't an issue.  But for most companies, the incremental cost of the circuit eliminates the economic savings of the Cloud service.
3. Use a generic WAN optimization box -- Not a great solution as these are software-based appliances designed for lower-bandwidth branch-office connections and a broad mix of transactional data.  The Cloud Storage connection is really a SAN-like 'channel' which will be very data intensive, and will benefit from hardware-based compression and offload processing.  And similar to the private circuit, the cost of the WAN optimization appliance that supports the higher throughput needed for the Cloud storage will cost you more than your annual Cloud storage bill.

What we're seeing in response is an initial first step towards closing this market gap: a new category of Cloud Storage Optimization solutions, or Cloud Storage Gateways.  Representative companies include Cirtas, Twinstrata, Nasuni and StorSimple.  These are all start-ups who seem to be quickly gaining awareness and traction with companies and Cloud Service Providers.

The anatomy of a Cloud Storage Gateway is made of software that either resides within an x86 server (i.e. an appliance) or completely as software that can be deployed within a VM.  They typically are asymmetric (i.e. single-device) solutions often positioned as a NAS filer.  Typical capabilities include NAS-to-Cloud API emulation, WAN Optimization, Caching, In-transit Encryption and Data management features such as snapshots.  As software-based solutions they are flexible, and meant to be affordable and targeted to a more mid-market customer.  Similarly they are intended for not-overly-demanding throughput needs, as there is no purpose-built processor offload. 

For mid-market companies looking to add a Cloud tier of archival or similar offline data storage, these are products to consider.  For enterprises or companies who want to leverage Cloud storage as a nearstore alternative, you will want to wait for next-gen 'Cloud Networking' products built for high-throughput, hardware-assisted optimization, symmetric caching/network de-dupe capabilities, and that integrate with your existing network management framework.

Thank goodness for Twitter

Not sure about you but life is moving pretty fast these days.  And though I have a deep-seated bias against blogs as a medium for serious, thoughtful communication, versus let's say a written letter or a conversation.  Yet, most of the time I can't even muster the time required for a half-way decent blog entry.  

Enter Twitter.  140 characters provide an adequate if staccato means to share an update, a heads up on an event, an interesting Cloud article or just a passing thought.

So if you aren't finding many postings here, then be sure to look for me on Twitter. I'm @mhardi01, and am often posting #cloud related tweets.

Best Practices for Choosing an External Cloud Vendor

The idea of Cloud is catching fire.  One vendor recently shared that half of their customers are considering external Cloud storage providers. (As this was from a backup software vendor, I'm not sure this is such good news for them). 

The good news for you is that every IT vendor out there is delivering products or services to meet this growing Cloud interest. And the bad news is... every IT vendor out there is delivering products or services to meet this growing Cloud interest. Many are the same products that were last year's "Green IT" solutions. Some are enterprise-class utility computing products aimed at your data center. Some are public web-based services for SMBs.

I've been working now for some time on new External Cloud product efforts, and am seeing the potential confusion just in this one area of Cloud computing. So I thought I'd share a few tips I've picked up that may help you as you are considering new projects in "the Cloud".

1. Like any outsourcing decision, start with projects and applications that are not mission-critical or performance-sensitive.
2. Spend time to develop an architecture to address the linear scalability, parallel processing and distributed data aspects of cloud computing.
3. Understand how your management, monitoring and policies will accommodate external storage and compute resources especially in terms of security, availability, utilization and compliance.
4. Compare Cloud subscription costs with your burdened total costs of ownership -- Cloud should deliver savings for short-time horizon projects, where specialized admin staffing would otherwise be needed, and where large fixed investments may not be fully utilized.
5. Stick to annual contracts especially as Infrastructure as a service will become commoditized over time.
6. Expect that only a few leading ecosystems will emerge once the hype passes – choose your vendors carefully looking for a track record, customer references, a documented SLA and top quality infrastructure.

Good luck with your projects, and feel free to share what you're learning in the Cloud.