Highlights include no longer worrying about server power consumption or load balancing. Bob also notes that operating in the cloud keeps you from “Worry[ing] your engineers are spending valuable time worrying about infrastructure and worse physically visiting that infrastructure instead of doing something that gives your company a distinct competitive advantage.”

ZDNet’s Larry Dignan responds that these are great in theory but cloud computing isn’t a reality yet for most companies – I think it’s actually a lot closer than Dignan says and these 10 advantages are an incentive for companies to adopt the cloud sooner.

- Customers think of information technology as a means to an end.
- When they are making IT related decisions (technology and vendor) they are generally making them for the long term.
- Technology decisions are based on many issues like skill availability, how it fits into the technology, standards – portability as it related to standards.
- Vendor decisions are also based on many issues like track record, area of focus/expertise etc. Leverage is also on the list. Portability helps with issue.

At the end of the day, customers are looking for standards based technology that they can work with vendors to implement. Standards not only help them with technology related issues, but also leverage with vendors.

Let me start by saying every customer that I have talked to in the past 12 months says – that they will be going with a hybrid approach – combination of public and private clouds. The following are few things to think about before you decide on how you want to proceed.

- Type of enterprise – if you are a Web-based business, then public cloud is a no brainer. Regulated industries like insurance and now financial services will have a tougher time to go only w/ public clouds. So you might start with a VMware-based private cloud offering and then as you decide to use or expose APIs/services to customers/partners or your compute cycles for a point project are exponentially high, you might opt for adding the public cloud to your strategy.

- Use case – what you are doing will define how you do it. If the data is very sensitive and cannot leave the firewall, then you might decide to start with the private cloud. Just remember that is what people said about sales/forecast data. Salesforce.com is thousands of customers and their data seems pretty secure. Nevertheless, security of the data will be important criteria in deciding the private vs. public discussion.

- Cloud provider type – self services (l EC2, Google) or high touch (Rackspace, Sunguard, etc.). This is mostly about how you would like to access services. High touch has its benefits, but is also expensive. Over a LONG period of time the lines will blur, but at least for the next decade the difference in approach will be stark.

- Control – this goes back to the use case discussion above. Enterprises will want visibility and control. Granular control on things like authentication, authorization, data masking, etc. As with much of the Web/cloud approach, it has to be simple and has got to scale.

Now for the controversial part. Much has been said about the Google outage. Recently blogged about it here. Rob Enderle recently used the Google outage to assert that private cloud models will win over public cloud models. Even though he makes good points, it is not what our customers are telling us.. This is not an either or discussion. Enterprise customers will do both.

As they work through security, compliance type issues, this will make a GREAT success story – cloud computing is good enough to handle agencies’ sensitive data. Look forward to it.

- Most customers adopting cloud computing “hide” behind cost saving to “bypass” operations. Why? Because IT operations as are very slow in responding to business needs.

- NO mid to large enterprise is even remotely thinking about moving their datacenter to the cloud. Most projects are either new, that can be done entirely in the cloud, or hybrid, extensions of existing applications that need additional features. New cloud applications are mostly driven by SaaS and customer/partner centric applications. Hybrid applications are mostly driven by the need for elasticity. Please remember this is about mid/large enterprises.

- The 15% cost savings on labor cost is wrong. The cost of running a cloud over time is much lower than running individual datacenters. Additionally these calculations do not factor in the costs from time to market.

Cloud computing is still maturing. This is EXACTLY how SaaS started out… SLAs are not good enough, it is for small companies, etc. Now we have large companies like BoA, Japan Post doing multiple thousand seats on Salesforce.com. Yes SLA needs to be higher, yes the pricing has to be aligned for continuous/long running applications, yes we need to figure out security/compliance issues (plug for Sonoa’s Secure Cloud Gateway ), but that will come. The savings or revenue just on the time to market is big enough to justify the movement.

How will cloud computing affect business models of existing
enterprise computing vendors?

The impact of cloud use and associated business models will be profound on existing enterprise computing vendors. More so than open source software and software as a service (SaaS), cloud computing has the potential to change the very nature of what a traditional enterprise IT vendor is and does.

The business solutions and process values become the focal point of how IT is used and consumed in the coming era, making the “how” less critical as an acquisition criteria than the “what.” It’s quite possible that in the not too distant future the buyers of IT applications, services, solutions and processes won’t ever know what underlying platforms, systems, and technologies are involved. When you rent a car from Avis, do you know what is running their servers, or what tools went into creating the applications? Should you?

IT vendors will become the picks and shovels of cloud solutions, regardless of their physical locations, inside and outside the enterprise. Businesses will purchase solutions, including packaged cloud implementations inside their firewalls, perhaps managed and refined from yet anther ecology of solutions providers. This is a very different business from buy, license, install, integrate, support/maintain, and upgrade, etc.

What are the types of projects that will move to the hybrid cloud/on
premise model?

There will need to be a new methodology for assessments and costs-benefits analysis to address the question, because it will vary greatly. In fact, the way in which enterprises evaluate and implement the division between external cloud and internal IT resources will go a long way to determining their success as a business entity. Make the decisions wrongly, and it could crater the company. Make the decisions very well and it could provide both highest ability to meet business and customer demands — but at the lowest cost with the least complexity.

Doing cloud “correctly” can make or break a company, so it can’t be taken lightly. Each company, given its history, reality and goals, will need to precisely factor how they acquire and deliver IT functions that support their processes and strategies. There will be a super opportunity for consultants to craft the proven methodologies to determine and refine the right cloud “fit” for any organization.

Who will be the key driver (person) of cloud computing in the
enterprise?

It couldn’t possibly be one person, even in a company of one. This is what makes cloud challenging from specification, transition, governance and maturity perspectives. There are new areas, but we know that cloud effects more than IT, more than management, more than suppliers. It affects the entire organization and the communities that surround it. Like SOA, cloud has great importance because it can affect so much, and provides great challenges for the same reasons.

Suffice to say that cloud drivers will need to be both top-down and bottom-up. The adoption paths will need to be methodically and systemically evaluated and re-evaluated. The winners will be those that can leverage the benefits of the cloud IT approach across as many aspects of the entire business as possible, while managing the challenges on as many levels.

Don’t expect cloud to happen overnight, but expect it to impact the business broadly — for better or worse.

How are enterprises ensuring compliance as they deploy applications
in the cloud?

Governance, security, risk, and automation of control at the required (but not overly required) levels will be essential. Striking the proper balance between cloud push and cloud pull in any organization will also be critical. That said, a centrally managed and server-based IT architecture – even as the location may be variable – offers much greater security, management and automation than client/server and distributed models. A properly architected and introduced cloud IT facility will provide far better and comprehensive compliance. The cloud is the governance ultimately, and that means a strong story for managing risks. That’s why the intelligence and defense communities are closer to cloud than commercial enterprises today.

So why do you need an API? For one thing, everyone else is diving into the API economy and your business needs to stay competitive. Yes, APIs let your company drive more revenue opportunities, but they also help you stay instep with, and often ahead of, the competition. There’s an awesome post by Kipp Bodnar on this subject and the API as the next marketing platform: http://digitalcapitalism.com/2009/04/api-marketing.

Now that you know that you need an API to expand business, you face certain issues with API development and deployment.

API Design: As always start with KISS (keep it simple stupid). You need simple design to address two basic principles: make your API easy to use and hard to misuse, and make it easy to extend. Joshua Bloch has written extensively on this subject.

API Deployment: lets start with visibility. As one of our customers says, “you need to see the needle to move the needle.” Next comes control: authentication, threat protection, rate limiting, etc. If you’re familiar with Sonoa, this is what we do – we’re helping people expose their APIs by giving them this visibility and control. It’s a great time to expand your services with an API – just be sure to cover your apps before jumping out there. API development and deployment is a critical subject that I’ll be writing more about in the weeks to come.

While there was initially hesitation about SaaS as a new, untested technology, once an enterprise explored the easy of deployment and cost advantages, the move was a no brainer. The same is already happening for cloud computing. Though 10 of the 12 surveyed said the cloud is not part of their current cost cutting strategy, today’s economy will continue to make the ease and low cost of most cloud services more appealing, and will eventually lead more CIOs to migrate to the cloud.

Goldsmith highlights security as the main concern for CIOs. However, he does note that those surveyed do recognize the potential down the line. He writes, “Despite the comprehensive ‘no’ vote, some CIOs expect that the cloud will indeed play a part in their future tech plans. Ben Acheson, IT manager of PADS Printing and Commercial Stationery, believes cloud computing will become part of his strategy once the wrinkles have been ironed out.”

It really just boils down to early adopters and those who will jump into the cloud later on, once they feel more comfortable. Alistair Behenna, CIO at Harvey Nash, was in the minority of the survey, having recognized the opportunity for his current IT strategies. He noted that cloud computing “has to be a viable strand in any IT strategy fabric.” He also said that it is “certainly not the whole solution but it is undeniably useful for specific areas of the infrastructure and service delivery.”

It’s always valuable to hear the concerns of those making the IT decisions. Survey these same CIOs in a year and you will see many more saying that cloud computing has become part of their cost cutting IT strategy. Survey again in three years and cloud computing is sure to be ubiquitous. Once the early adopters see that that “wrinkles have been ironed out” there will be no question that cloud is to stay for quite some time.

I agree with the need for what David calls “service expandability,” or what I call service scalability. David says, “Cloud computing services are designed to expand as needed, and those leveraging cloud services do so because they can get the services on demand, when they need them. The ability to expand services within a SOA is typically a painful and expensive process.”

Scalability is a key factor in the consumer experience with the cloud. Consumers have a short attention span, and if scalability does not exist in the cloud services they use, then consumers will quickly lose interest and move on. An example is the scalability and subsequent service problems Twitter has had. Twitter’s “Fail Whale” has proven that consumers need scalability for their cloud services.

Another central issue for cloud providers that David highlights is Service Design. He says, “The reality is that services that are not well defined and designed won’t sell well when delivered on-demand, and thus those who provide services out of the cloud – which are most major cloud computing providers – have to spend a lot of time on the design of the services, including usability and durability.” Why is this?

With SOA, you have a private service with limited users, so for the most part you can make multiple revisions to services and APIs. But, opening services and APIs to the cloud brings new problems to service design. Once you open an API to the cloud you cannot change design as easily because there will be existing developers who have already built out your existing API. If you change the design, these developers’ APIs won’t work. So, David is correct in saying that well-designed service is extremely important from the get-go because you cannot change designs the way you can in the contained SOA environment.

There’s a lot that cloud computing can learn from SOA, and scalability and good service are just two examples. History always teaches ways to improve our current projects so it will be interesting to see the shape the cloud takes from what we’ve learned with SOA.