State of the Cloud 2010

Cloud Computing was a headline leader again in 2010, but this year it was about new products, case studies, and emerging new technologies and ways to take advantage of them. We spend a lot of time in Digital Mines talking about and delivering services in this space, and as part of that we like to look back at the year that’s been, and analyse the activity. Cloud Computing is a hugely exciting space with daily developments, and it will continue to be for the foreseeable future. For anyone interested in the area, we hope the below summary information provides some guidance.

  • Definition: The term ‘Cloud Computing’ was a bandwagon in 2009 and everyone decided they were ‘Cloud Companies’, in 2010 the definition of Cloud Computing was generally accepted as being 3 layers –  IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service). While we feel it adds less value being so generic (the term originally emerged for the IaaS space – hence the word ‘computing’), we welcome that the area now has a definition.
  • Mainsteam Acceptance: Cloud Computing is now generally known and accepted as a service within business IT departments. However, it is not well understood and adoption is still low.
  • Startups: A vast amount of money poured into a large number of startups, purely doing ‘Cloud Computing’. Infrastructure Providers, Management Applications, Storage Systems – a whole new breed of IT company is being created around this new ecosystem.
  • Microsoft: Microsoft are investing heavily with Azure, and are moving into the general IaaS area with their latest server offering, Azure has yet to gain any measurable traction though, and is still an early stage service, trailing in features and innovation from Amazon Web Services. Hyper-V and System Centre Operations Manager are MS’s Private Cloud products and they ares selling them hard. While small ground was made 2010, momentum seems to be shifting their way.
  • Salesforce: The Force.com platform is gaining momentum, although we do not see a lot of interest – it seems to be primarily an extension for existing Salesforce customers. The buy of Heroku, and launch of Database.com could extend Salesforce into the main Cloud Computing arena next year.
  • Amazon Web Services: AWS has had another huge year. By all accounts, AWS is the industry leader by some distance. They continue to increase the pace of innovation, with regular new product introductions and feature enhancements. AWS appeals mainly to developers, due to it’s complexity, and Rackspace is winning here as it’s offering is much lower-level, but is easier for hobbists and IT managers to work with.
  • The Other Big Co’s: IBM, HP, Dell, Oracle/Sun – a lot of announcements but nothing concrete from these players. The typical not-invented-here syndrome and protecting the existing ‘tin sales’ may be what’s holding them back. We felt Sun had great potential to become a competitor with their Cloud plans, but these were shelved with the acquisition by Oracle.
  • EcoSystem: The Cloud Computing ecosystem is only beginning to emerge, with AWS as the primary platform for these applications. Heroku was the big winner this year with a 200m+ buy out. EngineYard, Cloudkick (acquired by Rackspace), Rightscale (raised an additional 25m in funding this year to bring it to 45m total), Digital Mines (that’s us!) and a few more are defining a new type of IT Company, building atop of giant, commodity infrastructure suppliers, and delivering a host of value-added services.
  • VMWare: VMWare made some big acquisitions this year in the drive to get away from deriving most of their revenue from the hypervisor (which is basically an nonchargeable commoditised piece of software now). They now have application offerings in platform (Springsource) and collaboration (Zimbra) and with ex-Microsoft employee Paul Maritz at the helm, it seems their strategy playbook is very similar to Microsoft’s own – ‘extend and dominate’. vCloud Director, their product to enable a VMWare based network of Cloud Providers, was launched and well received, but as yet not a lot of use cases have been shown, and parts of the product need further development.
  • Citrix Xen: Xen became an enterprise player this year, with statistics that a large number of the Fortune 500 are now using it instead of VMWare. Citrix have created an application stack for Cloud Computing – with Xen Cloud, Xen Desktop and Xen App and this year moved from developer into mainstream IT. VMWare still control the enterprise, but Citrix are becoming an able challenger.
  • Local IT Providers: Predictably, a large tranche of IT Providers, VARs and ISV’s, launched ‘Cloud Offerings’ this year. Some are partnering with Microsoft on BPOS, or Salesforce, others are investing in their own infrastructure platforms, and yet others are re-branding their existing services as ‘Cloud Services’. There will always be a need for these companies – the local provider of IT services – but in 2010, following the trend in 2009, they were under pressure to find new revenue channels as businesses stopped spending capital on IT resources and drove to reduce IT service costs.
  • Storage: Storage has to be mentioned as an area with a lot of activity this year. Servers and Networks continued their usual pace of development, but storage companies were funded, bought & sold, and many new entrants emerged with ‘value-added’ services such a local gateways to Cloud Storage & better synchronisation and collaboration. The storage space was ‘hot’ in 2010, with a healthy amount of user adoption, not just product and press releases. Noteworthy were the HP acquisition of 3PAR (after a fight with Dell) and Dell of Compellent. The Cloud Storage battle has yet to be fought, and new alternatives, methodologies and providers are emerging all the time. We think a Cloud Storage ‘format war’ is brewing and no clear contender has emerged – hence the amount of money being spent in the area.

Disclaimer: This blog post is an opinion piece and not to be taken as facts. Many developments and companies were not included in this post – it is not intended to be exhaustive – but merely to provide a short, useful snapshot of Cloud Computing in 2010. We welcome discussion on any of the topics above, these opinions were formed based on our experiences in the industry, and we are more than happy to discuss them.

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