Gouged by cloud - but it's so convenient
Last to know, first to pay
Open ... and Shut Most everyone believes that cloud computing is taking off in a big way. Finding agreement on why it's booming is a bit more problematic. The issue becomes particularly nettlesome for private cloud adoption, which is either heavily driven by public cloud cost management... or the exact opposite, depending on whom you ask.
There are all sorts of reasons to embrace cloud computing. A recent North Bridge Venture Partners survey suggests that scalability is the top reason, with business agility not far behind. Meanwhile, a KPMG survey of government IT buyers indicates that cost is the biggest reason government agencies are embracing the cloud.
Which is right?
Earlier this week I spent time with one of the industry's big private cloud providers. In the course of our conversation, a company executive suggested that public cloud adoption (read: Amazon Web Services) spreads like a weed through an enterprise, similar to open-source adoption. Eventually CIOs get around to using tools like Cloudability to determine just how much they're spending as a company, via individuals' credit cards. Once they realize that AWS is actually pretty pricey, his reasoning went, they start to look for ways to manage costs, which leads them to private or hybrid cloud solutions.
This has been a common path leading to his company's private cloud solutions. However, when I tweeted that such cost containment might be the norm for public-to-private cloud adoption, I got a very different response from Cloudability:
@mjasay Exactly. We see a common path: they stop the bleeding, increase efficiency, then put more in because they are getting more out.— Cloudability.com (@cloudability) June 27, 2012
Of course, this assumes that CIOs can accurately figure out their costs in the first place. As Apigee solutions architect (and former enterprise architect with Target) Carlos Eberhardt suggests, it's: "Hard to compare [private vs. public cloud computing costs] without [taking into account] the people costs." Neil Levine, vice president of Product at Fluidinfo, piles on, arguing that the "direct and indirect cost of setting up a private cloud is still an unknown figure to CIOs."
So even if CIOs know that they're spending a lot with Amazon, this doesn't necessarily mean that they know they'll spend less by taking their clouds private.
Frankly, it's not clear that CIOs are the big drivers of cloud computing, anyway. As Billy Marshall famously said with regard to open source: "The CIO is the last to know." Adoption of cloud, just like open source, tends to happen lower in the trenches. In the case of cloud, it's also happening outside the IT department as business users look to get an edge on their competition.
Marten Mickos, chief executive of Eucalyptus Systems, which just released its most open source-friendly version yet, captures this well in an email he sent me:
If you are an Early Adopter, your motto is: 'Get ahead of the herd!' Economy is not the main driver. We see this with our customers (think Puma, Plinga, a major telecom equipment manufacturer, etc). They are looking for AGILITY. They can develop and deploy faster with a cloud solution (whether public or on-prem). They know they can get an edge over their competitor by using cloud.
Sure, they don't want to spend too much money. But the driving force is not economy, but agility. Once we get the Early Majority engaged, we will start seeing economy being a more prominent criterion. But before that, my guess is that we'll see manageability.
In my conversations with IT executives, Mickos' thinking rings true. Cost may well drive some to consider private clouds, while it could push others to double-down on their public cloud investments. We're still in the very earliest innings of cloud computing, and there will be a myriad of reasons nudging CIOs and others to adopt it. But the overall driver of cloud computing, at least for now, is business agility. The early adopters driving cloud computing don't need discounts, because cost isn't their primary motivation. Help them figure out how to do more, faster, and the cost equation of public versus private clouds becomes somewhat of a non-issue. ®
Matt Asay is senior vice president of business development at Nodeable, offering systems management for managing and analysing cloud-based data. He was formerly SVP of biz dev at HTML5 start-up Strobe and chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfresco's general manager for the Americas and vice president of business development, and he helped put Novell on its open source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears three times a week on The Register.
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