Where Are Enterprises in the Public Cloud? | Gaining Altitude in the Cloud

Posted On April 27, 2011

Amazon Web Services (AWS) recently announced several additional services including dedicated instances of Elastic Compute Cloud (EC2) in three flavors: on demand, one year reserved, and three year reserved. This should come as no surprise to those who have been following Amazon, as the company has been continually launching services such as CloudWatch, Virtual Private Cloud (VPC), and AWS Premium Support in an attempt to position itself as an enterprise cloud provider.

But will these latest offerings capture the attention of the enterprise? To date, much of the workload transitioned to the public cloud has been project-based (e.g., test and development), and peak demand computing-focused. Is there a magic bullet that will motivate enterprises to move their production environments to the public cloud?

In comparison with “traditional” outsourcing, public cloud offerings – whether from Amazon or any other provider – present a variety of real or perceived hurdles that must be overcome before we see enterprises adopt them for production-focused work:

Security: the ability to ensure, to the client’s satisfaction, data protection, data transfer security, and access control in a multi-tenant environment. While the cloud offers many advantages, and offerings continue to evolve to create a more secure computing environment, the perception that multi-tenancy equates to lack of security remains.

Performance and Availability: typical performance SLAs for the computing environment and all related memory and storage in traditional outsourcing relationships are 99.5– 99.9 percent availability, and high availability environments require 99.99 percent or higher. These availability ratings are measured monthly, with contractually agreed upon rebates or discounts kicking in if the availability SLA isn’t met. While some public cloud providers will meet the lower end of these SLAs, some use 12 months of previous service as the measurement timeline, while others define an SLA event as any outage in excess of 30 minutes, and still others use different measurements. This disparity leads to confusion and discomfort among most enterprises, and the perception that the cloud is not as robust as outsourcing services.

Compliance and Certifications: in industries that utilize highly personal and sensitive end-user customer information – such as social security number, bank account details, or credit card information – or those that require compliance in areas including HIPPA or FISMA, providers’ certifications are vital. As most public cloud providers have only basic certification and compliance ratings, enterprises must tread very carefully, and be extremely selective.

Support: a cloud model with little or no support only goes so far. Enterprises must be able to get assistance, when they need it. Some public cloud providers – such as Amazon and Terremark – do offer 24X7 support for an additional fee, but others still need to figure support into their offering equation.

Addressing and overcoming these measuring sticks will encourage enterprises to review their workloads and evaluate what makes sense to move to the cloud, and what will remain in private (or even legacy) environments.

However, enterprises’ workloads are also price sensitive, and we believe, at least today, that the public cloud is not an economical alternative for many production environments. Thus enterprise movement to the cloud could evolve one of several ways. In a hybrid cloud where the bulk of the production environment will be placed in a private cloud and peak demand burst to the public cloud. Or will increased competition, improved asset utilization and workload management continue to drive down pricing, as has happened to Amazon in both of the past two years? If so, will enterprises bypass the hybrid path and move straight to the public cloud as the economics prove attractive?

The ability to meet client demands, creating a comfort level with the cloud and the economics all play a role into how and when enterprises migrate to the cloud. The market is again at an inflection point, and it promises to be an exciting time.

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