Cloud computing represents a seismic shift in the delivery of technology services. By combining internal and external resources a cloud maximizes flexibility and efficiency while minimizing the quantity of assets under management. As a result IT budgets gain room for business critical innovation initiatives and IT gains the agility required to address rapidly shifting markets. When properly implemented cloud represents a global collaboration platform upon which to develop new services, enter new markets and transform how a company does business. It's no surprise it's on the agenda of every CEO, CFO and CIO in the Fortune 500.
Today the power of cloud computing is trapped between promise and responsibility. Executives used to worry about security but today they take it personally. Sarbanes-Oxley taught Fortune 500 boardrooms about the extent Congress was wiling to go on personal corporate responsibility. As a result CxO's scrutinize security to a degree previously unseen; a reasonable response in light of growing threats and vectors of attack. Adoption of cloud is hindered by one simple fact: the best solutions today require giving up control to a 3rd party. What is needed is a solution that gives the Fortune 500 assurance that they have control over the who, what, where, when, and why of their applications and only outsource the how.
There is a fast growing trend across IT that 10yrs ago would have been heresy to repeat. CIO's are looking to exit the data center operations and ownership domain. Taking a page right out of Nicholas Carr's paper they realize the value of IT is at the application and data layers, not the underlying sausage factory. I expect in 2013 and 2014 we'll see a downward trend in hardware and software purchases at corporations, in particular servers, storage, and operating systems. Purchases by providers should be lower as additional contraction is effected through virtualization so overall volumes should decrease. Not the future that the big tech vendors want, but one they won't escape from either. For this to happen Fortune 500 CIO's need to build synergy between their infrastructure and application development teams.
Today private clouds tend to be nothing more than large scale virtualization focused entirely on delivering a stable, low cost unit called a "server" to their customer, the rest of IT. These customers then treat that "server" as they always have: an application silo. Very few companies are building native cloud applications, sometimes for lack of talent but most often for lack of a cloud platform. To build a cloud application requires a purpose built Service Oriented Architecture (SOA). Most SOA implementations predate cloud and thus lack the refinements necessary such as the elimination of traditional languages like J2EE and.NET and adoption of their light weight replacements in the forms of Ruby on Rails, PHP, Python, Scala and others. Other changes include the adoption of HTML5 and CSS3, adopting REST to replace SOAP, coding for security and reliability, leveraging resources as services, and of course exposure through prototyping and education.
At some point soon these two major issues are going to be addressed. A provider will bring to the market a solution that enables large corporations to outsource real payloads without having to worry extend their trust to a 3rd party. And a technology company or cloud provider will deliver a compelling Enterprise Private PaaS solution compelling enough to get CIO's to adopt native cloud application development as the next step in the value chain above building virtualized infrastructure. When solutions to both problems are in the market ready and available for use I believe we will have reached the tipping point at which the Fortune 500 will begin to eagerly adopt cloud. Of course it will start with a trickle, but soon an all out flood will ensue as the "space race" of Big Data and Mobility will be on.
What cannot continue to happen is getting blood from the stone. Virtualization, in the form of the vast majority of solutions available today from IBM, VMWare, Citrix, and others, will only get you so far. The cost savings are tangible but they are also limited. To unlock the value of cloud one has to shift focus to revenue generation and that means applications. Applications can be built in a cloud but not in a vacuum which today is the only option for most enterprise developers. Fortune 500 companies need cloud to compete, to innovate, and ultimately to survive.