Cloud Computing: 2011 Predictions

Looking ahead, CIO.com's Bernard Golden discusses ten developments he expects to see in cloud computing for service providers and enterprise users.

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End Users

Prediction #1: Focus on cost and transparency. I admit it, I carry an economics bias. While many people point to the undoubted advantages of cloud computing — agility, elasticity, self-service — my perspective is that the cloud computing revolution is that these characteristics are not new or even specific to cloud computing.

The revolution of cloud computing is that, due to scale and automation, for the first time those characteristics can be achieved at an attractive price point — which makes all the difference. Moreover, they are delivered by CSPs in a completely transparent manner — listed in black and white on the provider Website.

What this economic revolution and cost transparency will translate to in 2011 is a demand that internal IT groups provide the same level of transparency, and woe betide the CIO who proffers feeble excuses like "we're not really set up to identify specific costs" — next year that will be a formula to be bypassed or banished. I got confirmation of this transparency rush during a conversation with an executive from Apptio, which provides IT-based Activity Based Costing software. He noted that the uptick in conversations with IT executives wanting to be able to identify specific costs has skyrocketed, and most of them are focused on figuring out the real costs associated with providing a private cloud infrastructure. Apptio, by the way, is delivered as a SaaS application.

This transparency demand will assuredly impose discomfort on IT groups, but it provides the foundation for the next revolution in IT, which is the explosion of applications in terms of numbers and types. Returning to economic theory, applications are the complementary good to infrastructure, and when one good's price is reduced, the demand for its complementary good increases. Since we believe that cloud computing represents an order of magnitude reduction in the cost of infrastructure, it is to be expected that we will see — at least — an order of magnitude increase in applications. Of course, the application explosion will bring its own problems, but at least they're associated with delivering business functionality, which is the point of IT, right?

Prediction #2: More public/private cloud confusion. The current debate raging about what the right mode of cloud use will continue, unabated, and may even get worse. There are valid arguments for both options and I won't go into them here, as I've addressed the topic several times, most recently here. However, it can be said with confidence that the pressure to provide some cloud option is only going to increase.

The desire by application groups and business units to grasp the benefits of cloud computing is palpable; one example surfaced this week, when the U.S. Federal government announced that, starting in 2012, federal agencies are being told to default to cloud-based solutions "whenever a secure, reliable, cost-effective cloud option exists." What this means is that, if you're a CIO, whatever form you want to deliver cloud computing in, it had better be ready in 2011. Extended rollout plans based on lengthy private cloud initiatives won't cut it in the fervid rush to deploy cloud computing.

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