12 ways the cloud changes everything

4 IDC analysts offer their tips for how enterprises can best prepare for cloud computing

Despite fears over reliability and security, enterprises are slowly but steadily moving their applications to the cloud, and the migration is going to change those companies in profound ways.

Some 80% of new enterprise apps will be developed for the cloud in 2011, and in the past year, adoption has moved into the "early majority" phase, says Frank Gens, senior vice president and chief analyst for IDC.

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Gens was part of a four-analyst panel that discussed the promises and gotchas of the cloud Monday at the Cloud Leadership Forum conference in Santa Clara, Calif. Each IDC analyst offered his thoughts on how enterprises can prepare for what they viewed as a massively disruptive technology.

Together, they offered 12 observations:

1. The cloud is the third platform. Mainframe was the first platform, which in its heyday offered enterprises about 2,000 applications. Client/server came next, leading to the PC revolution, where the number of applications grew to the tens of thousands. Today, the cloud has enabled the work-anywhere mentality. It will create tens of millions of applications and spawn an explosion of new services, including mobile apps, social technology and analytics/big data (which gives rise to uses like smart grids and e-government), says Gens.

2. Infrastructure vendors will create a fourth leg beyond servers, storage and networks, and this leg will be known as "shared cache." The impact of server virtualization is just beginning, says Rick Villers, IDC analyst and vice president of storage systems. IT wants to rid itself of silos and move to "converged IT." Virtualization is one step in the infrastructure architecture of that process, but there will soon come a day when IT is designing for 100 virtual machines per physical server instead of today's eight to 20 VMs. When it comes to recovering data, performance, high availability and scaling, our current IT architecture won't cut it. Data centers need to have this shared cache space, faster than shared disk/storage, where VMs are kept.

3. Bring your own license. IT executives say that software enterprise agreements are a barrier to cloud adoption. The enterprise software companies that survive the transition to cloud computing will adapt their licenses so that software can be accessed from multiple locations at a single cost to users, says Robert Mahowald, IDC research vice president for SaaS and cloud services. For instance, a user may access SQL Server from on premises, from Amazon and from Windows Azure (first look), all at a single cost. The choice of open source licenses for new software will also factor into which app IT chooses when it moves from data center to hybrid to cloud. Not all enterprise vendors are onboard with the idea yet, but some, such as Microsoft, are moving in this direction. As of July 1, Microsoft's Software Assurance customers will be able to use their current license agreements to move server applications from internal data centers to cloud computing services in what Microsoft calls "license mobility."

IT professionals such as Steve Turner, director of information technology at Amherst Securities Group in Austin, Texas, applaud the concept. "New models for licensing in the cloud are a good a idea and needed. Microsoft and other companies are making that transition. Not all vendors will."

4. The business will view IT's role as the "internal app store." The role of IT will shift from building custom apps and customizing large apps toward offering users a smorgasbord of services, accessible on any device, through clouds public and private. IT will need to reorient itself around the "IT services" concept, says Dave McNally, IT executive adviser for IDC. This movement began with the SOA idea some years back, but as SOA never completely succeeded with many enterprise application vendors, the cloud will progress the idea of IT as a collection of services once again.

5. Public clouds will become more important than private clouds, says Gens. "A lot of IT executives I talk to are thinking, 'How can I deploy cloud in my comfort zone, which is in my data center?' That is looking the wrong way," he says. Instead, IT executives need to be looking at this third platform for the new qualities it offers, not simply to re-create what the business is already doing on a potentially cheaper platform.

6. Clouds are big source for big data. A small number of cloud services of the Google, Amazon or iTunes ilk are gobbling up a large chunk of the storage capacity sold -- or 9.8 exabytes of hard drive capacity, says Villars. They have begun to realize that the data stored there is valuable information about consumers. Analytics companies are sprouting up to do everything from analyzing information on Twitter, to providing custom analytics for specialty retailers, all farming the data individuals are posting to the cloud. This holds compliance implications for enterprises, but also gives IT staffs the chance to lead the charge on researching their own companies' customers and markets.

7. IT organizations will become cloud services brokers. As part of the new self-image IT will take on as the enterprise app store, IT will become the master of all cloud services agreements. Rather than business units going around IT to hire SaaS services, IT will find and bundle cloud services for business, says Mahowald. IT will also perform asset management services that manage all IT resources used by the business, in-house, hybrid and via the cloud. This will also require more interaction and monitoring of vendors beyond the annual check-in, true-up or contract negotiation. IT organizations are providing the infrastructure that needs to service the business.

8. The cloud disrupts and potentially scares off the traditional IT workforce. "If we believe change is coming, a company needs to prepare its workforce," advises McNally. "How will the cloud impact the people?" IT workers fear that the cloud will commoditize IT work, and that cloud works hand-in-hand with outsourcing. This could become a self-fulfilling prophecy. Students entering IT careers want to pursue careers where they can make a difference and may not feel that enterprise IT jobs offers that prospect. This could create a skills gap that encourages outsourcing.

9. One-third of your key vendors will become "wiki-trivia," says Gens. On the right track are vendors that are right now embracing cloud, looking to deploy their own cloud services, and modifying their license agreements to bring their customers to the cloud. Vendors holding onto the old way of doing things will become the next Wang or DEC, which failed to see, understand and adapt to the PC revolution wrought by the rise of client/server technologies. Adds Turner, "I agree with the idea that we are at a big line in the road similar to where client/server was. We need to pay attention to which vendor adopts cloud and which does not."

10. When it comes to the public cloud, vertical specialization will prevail. In the last wave, companies digitized their processes. Now, some of them see value in offering these processes as new cloud services for their industries, says Villers. He offers the example of Technicolor, which began life as a video post-production service that fixed colors and sound after a movie was edited and before it was replicated and sent to movie theaters. Because Technicolor digitized its methodology, it was able to offer cloud voice and video services.

11. You can't avoid the personal cloud. End users already are building their own personal clouds, typically accessed through mobile devices like smartphones, says Mahowald. These clouds are important to the users and the model by which they will want to receive the enterprise app store apps. With desktop virtualization, mobile applications and SaaS, IT can adapt to users' expectations. Ultimately, end users are building their personal cloud to be a mix of their business apps and their personal apps. IT can't stop that train and shouldn't try to, even for compliance reasons. Much like the PC revolution, the people most successful at this next-generation, cloud-based IT will be the ones who know how to balance the enterprises' needs with the users' work styles.

12. Cloud services foster innovation. The rapid adoption of cloud is another opportunity for the CIOs, network executives and the whole IT team to lead the business into faster, more economical IT tools. From the view of clouds in the year 2011, it looks like resistance is futile.

Julie Bort writes the Microsoft Update and Source Seeker blogs for Network World's Microsoft Subnet and Open Source Subnet community sites. Follow Bort on Twitter @Julie188.

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Copyright © 2011 IDG Communications, Inc.

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