First Internal Clouds Likely to Fail, Forrester Says

The first internal clouds are likely to fail, but those failures will pave the way for future success, according to analyst firm Forrester.

Forrester analysts have some less-than-encouraging news for IT shops building their first internal cloud networks: You're likely to fail.

Cloud Computing in 2011: 3 Trends Changing Business Adoption [Registration required]

But Forrester analysts insist "that's a good thing," because the failure will pave the way for later success.

HOT VENDORS: 10 cloud computing companies to watch

"Most of these enterprises aren't ready for an internal cloud, but we expect that in 2011, I&O [infrastructure and operations] departments will start building them regardless. These efforts will most likely fail, but through this failure will come valuable experience and knowledge about what it really takes to create and operate a cloud environment," Forrester analysts James Staten and Lauren Nelson write in a new report called "2011 Top 10 IaaS Cloud Predictions for I&O Leaders."

Virtualization maturity, standardization, automation and infrastructure improvements are the key factors in building a successful internal cloud that can provide the types of infrastructure-as-a-service capabilities offered by the likes of Amazon's Elastic Compute Cloud, Forrester said.

"Most enterprises don't have the necessary virtualization maturity and aren't ready for the level of automation and standardization that a cloud environment requires," Forrester writes. "From an architectural perspective, cloud moves I&O away from silo-based architectures to a single pool of resources with two basic levels of priority -- a revolutionary concept and new challenge for I&O to manage. Management best practices will come from experience, and the sooner the better. Don't hold off on getting started just because your infrastructure isn't there yet."

That doesn't mean there aren't success stories, however. As previously reported by Network World, large enterprises such as Bechtel and First American Corp. have reported benefits from internal cloud projects.

There are also numerous software vendors offering automation tools to virtualize infrastructure and provide cloud-like capabilities -- for example, VMware, Red Hat, Platform Computing and the startup Nimbula founded by the team that built Amazon EC2.

For those not wanting to build a new internal infrastructure, Amazon, Terremark, Savvis, Rackspace and others offer hosted virtual servers. A Forrester survey of 1,252 server and storage IT decision makers in the third quarter of 2010 found that 15% are planning to purchase infrastructure-as-a-service resources from Amazon or other vendors, and another 6% have already done so.

Among enterprises with at least 20,000 employees, 20% plan to adopt IaaS and 8% have already done so.

Forrester's top IaaS cloud predictions for 2011 also include the following:

• "Enlightened" IT leaders won't stand in the way of early adopters within their organizations who are eager to adopt new cloud services.

• Hosted private clouds -- which are hosted by vendors but offer dedicated, instead of shared, resources -- will outnumber internal clouds by a factor of 3 to 1.

• Community clouds, set up by an association or group of businesses looking to share costs, will thrive in certain markets such as the biotechnology field, higher education and the federal government.

• Cloud-based high-performance computing will come to "the masses" thanks to new applications that offer the power of grid computing without being a hassle to set up.

• Cloud economics will improve greatly, letting developers build applications that start with a small footprint and scale up as needed. New tools will make it easier to compare costs and use multiple cloud services to get the best price.

• Cloud-based analytics will boost business intelligence with speedier and more cost-effective services.

• New features in Windows Azure and other clouds will help enterprises profit from data analysis, potentially helping customers become BI providers themselves by unlocking the value of internal data and building new services that generate revenue.

• Cloud standards will remain in flux in 2011, making "the cloud market ... too immature for standardization." Customers shouldn't let that stop them from adopting cloud services, but they should choose vendors with momentum and strong market adoption to prevent the risk of betting on a loser.

Cloud security "will be proven," but IT pros must carefully analyze the security, privacy, compliance, legal and contractual needs for all their applications and determine which ones are ready for cloud services. Users should also explore products "that secure your data before it enters the cloud," Forrester says.

Follow Jon Brodkin on Twitter:

Read more about data center in Network World's Data Center section.

This story, "First Internal Clouds Likely to Fail, Forrester Says" was originally published by Network World.

Participate in the 2019 State of the CIO survey. Make your voice heard.