As cloud computing continues to pick up speed — and popularity — cloud computing represents a critical opportunity for growth and development for service providers during the current economic slowdown. In an interesting HostingCon 2009 discussion Tuesday afternoon, Tier1 Research’s Antonio Piraino, Netmagic Solutions’ Sandip Gupta, 3Leaf Systems’ Justin Barney, and ParaScale’s Cameron Bahar discussed how hosts can get their infrastructure ready to support cloud, and what opportunities the cloud offers.
As with many discussions on “cloud computing,” a definition is usually a starting-off point. Bahar said it boils down to three things: standardization, automation and virtualization. As businesses transition from client-server to outsourced servers, tremendous leaps and bounds have been made in the softwares available to partition servers into virtual ones. He credits the standardization of infrastructure, also, as something that has made cloud computing a reality.
To put it in real terms, Bahar said his company has just 30 people managing a thousand virtual machines that do various things, and utilization of servers is greatly improved. “The cloud makes [business] cheaper, more reliable and globally accessible,” he said.
“Enterprises have data centers, SMB’s have nothing — maybe someone takes a DVD home with them,” Bahar said. This translates into tremendous opportunity for hosting providers. The “holy grail,” however, as Barney put it, is if enterprises outsource en masse to hosting providers. He said one of the best value adds is being able to scale up on the fly.
Gupta said the nuances that make applications enterprise-scale are scaling and bursting, which SMBs may not necessarily need.
As public clouds proliferate, enterprises are looking for similar cloud services at a certain price point, and hosters have to find profitable margins.
Paradoxically, as hard drives and DVD-R’s fall in price, Piraino said storage is a huge opportunity, particularly as an add-on to any other type of service.
“Everything’s free,” Bahar said, “networking’s dirt cheap, a disk is basically free…” He said that cloud storage is profitable because it has yet to become commoditized. Not all cloud storage solutions are equal, and companies can still offer storage as a service, which companies are willing to pay for because it’s a premium service that saves them money.
You can have a large, scale-out cloud or many private clouds with encryption — basically clouds made in a cage. Shared cloud storage, Gupta notes, is where security becomes tricky. Bahar responded that there are two things that can reassure customers: SSL encryption, and key-based encrypted access. This is, however, one of the challenges cloud service providers still debate.
Also left up to discussion is the conundrum that shared resources on the cloud will inevitably lead to one or more users hogging resources (with the proliferation of video and web 2.0 apps).
Regardless of these nagging problems, the panel widely encouraged the use of cloud technologies — of course with a few words of warning. Companies wanting to shift to the cloud, Gupta said, would be wise to try running services they already provide on cloud infrastructure, rather than try out something new. The cloud can offer substantial benefits for those companies that do not stay too far from their core competencies.
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