What is “cloud computing”? And why should you care?

I know you’ve heard about it. Pundits talk about it. Companies promote it. But what is, exactly, “cloud computing”? It’s really not that complicated (unless if you talk to industry analysts throwing around industry jargon). How about if we start with some examples: Yahoo! email, Flickr photo sharing, Facebook. These are applications that are accessible through a web browser, and as a user, you have no idea where the data is stored, what kind of computing infrastructure is used to run the applications, how many servers are running to ensure up time, or where all this computing technology resides. This is cloud computing in a nutshell.

So what is the big deal? The big deal is that with cheaper infrastructure costs, and faster and more accessible broadband access, a lot of technology vendors are now offering their sophisticated technologies “in the cloud” – meaning, instead of the user purchasing the software and running it in their own data centers, or on their own desktops, the application runs somewhere on the internet and is accessible through a browser. All the examples I used are for free applications, but for paid technologies, the implications of this are huge.

Business model. While a regular technology purchase is typically a straight purchase or lease, with cloud computing the business model switches from a capital expense to a subscription model with monthly or annual fees for access (the term Software-as-a-Service, or SaaS, is another term for cloud computing, in case you hadn’t connected the dots).

IT implications. As a user organization, with the cloud business model, you will have very little use for software or hardware purchases, IT staff for technology rollout, management, and maintenance, and general IT know-how about the new technologies your organization will use. All you need is an internet connection to use the technologies you’ve subscribed to.

Accessibility. The cloud-based systems can be accessible through PCs, but also on less robust notebooks, and even handheld devices such as smart-phones because the requirement for computing power moves from the user’s location to the “cloud”. The downside of accessibility is that if your internet connection is weak or cut off, you can’t access the technologies you’ve subscribed to.

Security. The biggest pushback against cloud computing is data security both at transmission time, and for storage. While this is a valid concern, the security aspect of cloud computing has improved significantly over the past couple of years and will continue to improve as the business model gains further traction.

Opacity and control. While you won’t have a need to purchase or manage technologies, as a user, your organization will also give up control of how these technologies are managed, where the storage devices reside, or what type of hardware is used to run these technologies. You’re not the technology owner, you’re the subscriber.

Elasticity. Cloud-based applications are, by definition, scalable. Whether your organization has 100 employees or 3000 employees, the subscription based model should be able to handle the company size and any changes in the number of staff using the system. Also, technology upgrades and updates are scalable across the entire user base without the need for a desktop-by-desktop rollout.


You might hear about “managed cloud computing” or “hybrid cloud computing”. Managed cloud computing is when all the technology is based in-house but available to the individual users within the company intranet. This is really the old centralized computing model before PCs became powerful and ubiquitous. Hybrid cloud computing means parts of the technology runs in the clouds, and other parts run in-house.

If it sounds like I’m a big fan of cloud computing, it’s because I am. As a user, I would love to move the headaches of technology purchase and maintenance to experts and become a subscriber. As a technology enthusiast (and I’m not one of those early adopter types), I see the wave coming, and it’s real. And as a business strategist, I see that companies have better things to do with their IT staff than have them spend 80% of their time on technology maintenance.

Salesforce.com, a company with revenues exceeding $1.3B, is the poster child for cloud computing, and offers its software exclusively through subscriptions. Microsoft claims it will make its entire Office suite available in the clouds. Google is providing a myriad of free and paid services – all in the clouds. And you will see more and more major technology vendors either supporting cloud computing or switching their business models to cloud computing.

Of course caution shouldn’t be thrown into the wind using cloud-based services. Security IS a major concern. The viability of the company you’ll use to provide the services is also another major concern (what if they fold in a few months?). And customer service is another area to consider. But cloud computing is here to stay, and you’ll be hearing more about it in time (including from me).

Let me know if your organization is already using any cloud computing services and what is your experience with it.

HP CEO, Mark Hurd, speaks from both sides of his mouth: cloud computing good for the customers, but not for HP

In my very first blog on The Directive, I wrote a not-so-nice article about Mark Hurd, the CEO of HP. The blog was a reaction to Hurd’s major cutbacks in HP’s R&D expenditures, and the idea was that by cutting back on R&D programs, HP would lose its innovative edge and corner itself into commoditized markets. I find myself perplexed by Hurd again. I have nothing against the man, or the company he leads. In less than 12 hours from publishing this article, I’ll be buying an HP laptop, so there.

This isn’t about laptops though. How much innovation is left in laptops? Or margins for that matter?

In a Q&A with Gartner analysts this week, Hurd made some comments about cloud computing that need major PR damage control. In a nutshell, he said that he doesn’t trust cloud computing due to security issues, and that if HP CIO, Randy Mott, had a big idea and wanted to put general ledger and accounting in the cloud, Hurd “would send him back to work.” He added, “We have 1,000 hacks a day and I can’t tell you why, but they keep showing up. We wouldn’t put anything material in nature outside the firewall.”

Really?!

This, coming from the CEO of a company that is heavily pushing cloud computing into the enterprise markets, and boasts articles and brochures about “Cloud Assure” for “enabling business confidence in the cloud.”

Wouldn’t you know, I have a few thoughts on this.

Thought #1. HP needs to think about why its customers should believe in cloud computing if HP’s own CEO doesn’t. Sales rule #1: believe in what you’re selling.

Thought #2. Millions of internet users trust in their banking and brokerage firms keeping their financial data in the clouds. If Fidelity and Wells Fargo have figured out how to keep client data securely in the clouds, shouldn’t HP be miles ahead of them? This is the company that’s developing the technologies for cloud computing in their R&D labs.

Thought #3. I work out of a small office on a single computer (sometimes two), and I get hacked several times a day (I know this because my computer is set to alert me with that annoying ding whenever a hack has been attempted). I have relatively inexpensive software to protect my computer and my data. 1,000 hacks a day on HP? I’m sure someone at HP’s IT can figure out how to deal with this. You can’t control the problem, but you can control the solution.

Thought #4. Cloud computing is here to stay. Instead of open expressions of doubt about this market and related technologies, shouldn’t Hurd discuss how HP is working to alleviate the problems in this relatively nascent market through innovation and technological excellence?

Thought #5. Google will lead the way and leave the rest in the dust. Enough said.

Thought #6. HP needs to ponder Thought #1, really really hard.

HP is on my radar screen because I followed the company’s product line competitively for many years. I have the highest regards for the company and its culture, but I want the company to show some signs of innovation again.

Bring back “HP invent” any time!