By Invitation

A game-changer

Cloud computing transforms the way business consumes IT, argues Nandu Pradhan

Not too long ago, a nine-year old Singapore schoolboy wrote a drawing program for the iPhone to help his younger sisters draw on the touch screen using her fingers. Called Doodle Kids, it was downloaded nearly half a million times in three months from Apple's App Store.

Technology isn't about building and maintaining infrastructure, it's about using IT to solve problems. Yet, in nearly seven out of ten enterprises, IT dollars are spent on maintenance and, in a distributed computing environment as much as 85% of IT capacity can remain idle.

This is not to diminish the importance of maintaining infrastructure, but the true value of IT lies in providing users with information they need to make critical business decisions.

Today's mobile, interconnected workforce places new demands and greater pressures on business application delivery. To meet these challenges, enterprises typically overprovision computing capacity and network resources, leading to the idling of excess capacity. This needs changing.

The combination of the Internet, broadband networks, virtualization technology and increasingly powerful commodity computing resources creates the conditions for the next development in IT-cloud computing. The idea behind cloud computing is to harness pools of computing resources to give enterprises access to IT infrastructure without incurring large capital investments.

Cloud computing removes the need to over engineer infrastructure. With it, enterprises can acquire resources as needed and when usage peters off, these resources can be turned off, offering great flexibility. When you only pay for what you use, the economics of providing IT resources changes dramatically. Available on a metered basis, IT expenditure shifts from CAPEX to OPEX.

If enterprises view IT as a utility, then continued investment in infrastructure when options exist, would be like operating your own power station just to get electricity. IT is an information utility. Growing adoption of virtualization technology will advance cloud computing and its promise of self service, on-demand usage and portability.

Research firm Gartner Inc anticipates that by 2011 enterprises will purchase as much as 40% of their IT infrastructure as a service. And that by 2012, at least one-third of business application software spending will be as service subscription, instead of being as product license.

The move to cloud computing won't happen dramatically. Rather, it will be evolutionary as enterprises get used to freeing applications from being tied to specific infrastructure.

A recent market study by Merrill Lynch predicts the global market for cloud computing to reach US $ 95 billion in the next five years or about 12% of software deployed in the world. Recessionary economic conditions will likely add pressure for a faster adoption of commodity infrastructure and services.

Cloud computing is, of course, no panacea for all economic ills. But it does offer businesses a new way to provision infrastructure and computing services as well as a compelling financial argument by freeing up capital otherwise locked in physical equipment.

In Singapore, pay-per-use computing services are already a reality for a number of government and commercial organizations through the National Grid initiative. According to one computing resource provider participating in the initiative, critical mass is within reach in three years' time.

The more compelling vision is the creation of a Grid Market Hub in Singapore by 2013 that will offer businesses anywhere in the world infocomm resources on an on-demand, pay-as-you-use basis. In short, cloud computing will move to the forefront in Singapore and IT organizations will not be able to ignore it.

The open source, collaborative model of developing and consuming software will be pivotal in cloud computing, In fact, open source and cloud computing are a natural fit, not least because of the inherent cost advantages. As cloud providers grow, given their scale, the costs of acquiring proprietary software will loom large in the business calculations.

More importantly, community-driven open source software ensures cloud computing is open, standards-based, interoperable and free from technology lock-in. Making the architecture open means more choice. It makes it possible for enterprises to switch cloud computing providers or architectures as their own conditions change as, for example, when acquisitions occur or new business requirements arise.

In the US, where the cloud computing wave is gathering momentum, nearly all major cloud providers such as Amazon, for example, use open source software. Demand for open standards and development transparency will push the adoption of open source in cloud computing and in so doing, redefine the way software is developed and consumed.

The on-demand cloud computing model will transform the way in which enterprises will use IT. Freed from the time and cost constraints of implementing and maintaining underlying IT infrastructure, enterprises return the focus to creating business solutions they need to operate successfully. In their continuous search for business advantage, enterprises need to re-emphasize the information in IT.

About the author: Nandu Pradhan is the President & Managing Director, Red Hat India