By 2012, 20 percent of businesses will own no IT assets

Several interrelated trends are driving the movement toward decreased IT hardware assets, such as virtualization, cloud-enabled services, and employees running personal desktops and notebook systems on corporate networks.

The need for computing hardware, either in a data center or on an employee’s desk, will not go away. However, if the ownership of hardware shifts to third parties, then there will be major shifts throughout every facet of the IT hardware industry.

For example, enterprise IT budgets will either be shrunk or reallocated to more-strategic projects; enterprise IT staff will either be reduced or reskilled to meet new requirements, and/or hardware distribution will have to change radically to meet the requirements of the new IT hardware buying points.

Gartner Highlights Key Predictions

Cloud computing is Internet-based computing, whereby shared servers provide resources, software, and data to computers and other devices on demand, as with the electricity grid. Cloud computing is a natural evolution of the widespread adoption of virtualization, service-oriented architecture and utility computing. Details are abstracted from consumers, who no longer have need for expertise in, or control over, the technology infrastructure “in the cloud” that supports them.

Cloud computing describes a new supplement, consumption, and delivery model for IT services based on the Internet, and it typically involves over-the-Internet provision of dynamically scalable and often virtualized resources. It is a byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet.

This frequently takes the form of web-based tools or applications that users can access and use through a web browser as if it were a program installed locally on their own computer. The National Institute of Standards and Technology (NIST) provides a somewhat more objective and specific definition here.

The term “cloud” is used as a metaphor for the Internet, based on the cloud drawing used in the past to represent the telephone network, and later to depict the Internet in computer network diagrams as an abstraction of the underlying infrastructure it represents. Typical cloud computing providers deliver common business applications online that are accessed from another Web service or software like a Web browser, while the software and data are stored on servers.

Most cloud computing infrastructures consist of services delivered through common centers and built on servers. Clouds often appear as single points of access for consumers’ computing needs. Commercial offerings are generally expected to meet quality of service (QoS) requirements of customers, and typically include service level agreements (SLAs).

The major cloud service providers include Amazon, Rackspace Cloud, Salesforce, Microsoft and Google. Some of the larger IT firms that are actively involved in cloud computing are Fujitsu, Dell, Red Hat, Hewlett Packard, IBM, VMware and NetApp.

The fundamental concept of cloud computing is that the computing is “in the cloud” i.e. that the processing (and the related data) is not in a specified, known or the same place(s). This is in opposition to where the processing takes place in one or more specific servers that are known. All the other concepts mentioned are supplementary or complementary to this concept.

Generally, cloud computing customers do not own the physical infrastructure, instead avoiding capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use. Many cloud-computing offerings employ the utility computing model, which is analogous to how traditional utility services (such as electricity) are consumed, whereas others bill on a subscription basis. Sharing “perishable and intangible” computing power among multiple tenants can improve utilization rates, as servers are not unnecessarily left idle, which can reduce costs significantly while increasing the speed of application development.

A side-effect of this approach is that overall computer usage rises dramatically, as customers do not have to engineer for peak load limits. In addition, “increased high-speed bandwidth” makes it possible to receive the same. The cloud is becoming increasingly associated with small and medium enterprises (SMEs) as in many cases they cannot justify or afford the large capital expenditure of traditional IT.

SMEs also typically have less existing infrastructure, less bureaucracy, more flexibility, and smaller capital budgets for purchasing in-house technology. Similarly, SMEs in emerging markets are typically unburdened by established legacy infrastructures, thus reducing the complexity of deploying cloud solutions.

Cloud architecture, the systems architecture of the software systems involved in the delivery of cloud computing, typically involves multiple cloud components communicating with each other over application programming interfaces, usually web services. This resembles the Unix philosophy of having multiple programs each doing one thing well and working together over universal interfaces. Complexity is controlled and the resulting systems are more manageable than their monolithic counterparts.

The two most significant components of cloud computing architecture are known as the front end and the back end. The front end is the part seen by the client, i.e. the computer user. This includes the client’s network (or computer) and the applications used to access the cloud via a user interface such as a web browser. The back end of the cloud computing architecture is the ‘cloud’ itself, comprising various computers, servers and data storage devices.

The underlying concept of cloud computing dates back to the 1960s, when John McCarthy opined that “computation may someday be organized as a public utility.” Almost all the modern-day characteristics of cloud computing (elastic provision, provided as a utility, online, illusion of infinite supply), the comparison to the electricity industry and the use of public, private, government and community forms was thoroughly explored in Douglas Parkhill’s 1966 book, The Challenge of the Computer Utility.

The actual term “cloud” borrows from telephony in that telecommunications companies, who until the 1990s primarily offered dedicated point-to-point data circuits, began offering Virtual Private Network (VPN) services with comparable quality of service but at a much lower cost.

By switching traffic to balance utilization as they saw fit, they were able to utilize their overall network bandwidth more effectively. The cloud symbol was used to denote the demarcation point between that which was the responsibility of the provider from that of the user. Cloud computing extends this boundary to cover servers as well as the network infrastructure. The first scholarly use of the term “cloud computing” was in a 1997 lecture by Ramnath Chellappa.

Amazon played a key role in the development of cloud computing by modernizing their data centers after the dot-com bubble, which, like most computer networks, were using as little as 10% of their capacity at any one time, just to leave room for occasional spikes. Having found that the new cloud architecture resulted in significant internal efficiency improvements whereby small, fast-moving “two-pizza teams” could add new features faster and more easily, Amazon initiated a new product development effort to provide cloud computing to external customers, and launched Amazon Web Service (AWS) on a utility computing basis in 2006.

In 2007, Google, IBM and a number of universities embarked on a large scale cloud computing research project. In early 2008, Eucalyptus became the first open source AWS API compatible platform for deploying private clouds.

By mid-2008, Gartner saw an opportunity for cloud computing “to shape the relationship among consumers of IT services, those who use IT services and those who sell them” and observed that “[o]rganisations are switching from company-owned hardware and software assets to per-use service-based models” so that the “projected shift to cloud computing … will result in dramatic growth in IT products in some areas and significant reductions in other areas.”


The Cloud model has been criticized by privacy advocates for the greater ease in which the companies hosting the Cloud services control, and thus, can monitor at will, lawfully or unlawfully, the communication and data stored between the user and the host company.

Instances such as the secret NSA program, working with AT&T, and Verizon, which recorded over 10 million phone calls between American citizens, causes uncertainty among privacy advocates, and the greater powers it gives to telecommunication companies to monitor user activity. While there have been efforts (such as US-EU Safe Harbor) to “harmonize” the legal environment, providers such as Amazon still cater to major markets (typically the United States and the European Union) by deploying local infrastructure and allowing customers to select “availability zones.”


In order to obtain compliance with regulations including FISMA, HIPAA and SOX in the United States, the Data Protection Directive in the EU and the credit card industry’s PCI DSS, users may have to adopt community or hybrid deployment modes which are typically more expensive and may offer restricted benefits.

This is how Google is able to “manage and meet additional government policy requirements beyond FISMA” and Rackspace Cloud are able to claim PCI compliance. Customers in the EU contracting with Cloud Providers established outside the EU/EEA have to adhere to the EU regulations on export of personal data.

Many providers also obtain SAS 70 Type II certification (e.g. Amazon,, Google and Microsoft), but this has been criticised on the grounds that the hand-picked set of goals and standards determined by the auditor and the auditee are often not disclosed and can vary widely. Providers typically make this information available on request, under non-disclosure agreement.


In March 2007, Dell applied to trademark the term “cloud computing” (U.S. Trademark 77,139,082) in the United States. The “Notice of Allowance” the company received in July 2008 was canceled in August, resulting in a formal rejection of the trademark application less than a week later. Since 2007, the number of trademark filings covering cloud computing brands, goods and services has increased at an almost exponential rate.

As companies sought to better position themselves for cloud computing branding and marketing efforts, cloud computing trademark filings increased by 483% between 2008 and 2009. In 2009, 116 cloud computing trademarks were filed, and trademark analysts predict that over 500 such marks could be filed during 2010.

Other legal cases may shape the use of cloud computing by the public sector. On October 29, 2010, Google filed a lawsuit against the U.S. Department of Interior, which opened up a bid for software that required that bidders use Microsoft’s Business Productivity Online Suite. Google sued, calling the requirement “unduly restrictive of competition.” Scholars have pointed out that, beginning in 2005, the prevalence of open standards and open source may have an impact on the way that public entities choose to select vendors.


A number of universities, vendors and government organizations are investing in research around the topic of cloud computing. Academic institutions include University of Melbourne (Australia), Georgia Tech, Yale, Wayne State, Virginia Tech, University of Wisconsin–Madison, Carnegie Mellon, MIT, Indiana University, University of Massachusetts, University of Maryland, North Carolina State University, Purdue University, University of California, University of Washington, University of Virginia, University of Utah, University of Minnesota, among others.

Joint government, academic and vendor collaborative research projects include the IBM/Google Academic Cloud Computing Initiative (ACCI). In October 2007 IBM and Google announced the multi- university project designed to enhance students’ technical knowledge to address the challenges of cloud computing. In April 2009, the National Science Foundation joined the ACCI and awarded approximately $5 million in grants to 14 academic institutions.

In July 2008, HP, Intel Corporation and Yahoo! announced the creation of a global, multi-data center, open source test bed, called Open Cirrus, designed to encourage research into all aspects of cloud computing, service and data center management. Open Cirrus partners include the NSF, the University of Illinois (UIUC), Karlsruhe Institute of Technology, the Infocomm Development Authority (IDA) of Singapore, the Electronics and Telecommunications Research Institute (ETRI) in Korea, the Malaysian Institute for Microelectronic Systems(MIMOS), and the Institute for System Programming at the Russian Academy of Sciences (ISPRAS).

In Sept. 2010, more researchers joined the HP/Intel/Yahoo Open Cirrus project for cloud computing research. The new researchers are China Mobile Research Institute (CMRI), Spain’s Supercomputing Center of Galicia (CESGA by its Spanish acronym), Georgia Tech’s Center for Experimental Research in Computer Systems (CERCS) and China Telecom.

In July 2010, HP Labs India announced a new cloud-based technology designed to simplify taking content and making it mobile-enabled, even from low-end devices. Called SiteonMobile, the new technology is designed for emerging markets where people are more likely to access the internet via mobile phones rather than computers.

In Nov. 2010, HP formally opened its Government Cloud Theatre, located at the HP Labs site in Bristol, England. The demonstration facility highlights high-security, highly flexible cloud computing based on intellectual property developed at HP Labs. The aim of the facility is to lessen fears about the security of the cloud. HP Labs Bristol is HP’s second-largest central research location and currently is responsible for researching cloud computing and security.

The IEEE Technical Committee on Services Computing in IEEE Computer Society sponsors the IEEE International Conference on Cloud Computing (CLOUD). CLOUD 2010 was held on July 5–10, 2010 in Miami, Florida.

Source:  Wiki

Related Links:

IBM, NATO Collaborate on New Cloud Computing Project

Cloud Computing Journal

The Top 50 Bloggers on Cloud Computing

“Cloud First” Video via Cloud Musings Blog (Recommended for Gov’t’ IT Industry)


Amazon, WikiLeaks and the Need for an Open Cloud

The Promise and Pitfalls of Cloud Computing

Google sues the United States for pro-Microsoft bias and the future of cloud computing

Most Large Enterprises Already Active in Cloud Computing: Survey

Dell to make another cloud-computing acquisition

Juniper targets cloud, mobile Internet in 2011

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