Icy Tube SignClouds of a rather different sort complicated things at the start of the Powered by Cloud conference in London last week. As you may have heard, ‘unprecedented’ (but repeatedly forecast) snowfall brought the UK’s capital grinding to an ignominious halt. Despite the absence of a handful of the speakers, the only person who knew how to control the venue’s heating, and a good chunk of the audience, those who did make it through the snow to Millbank engaged in two days of interesting – and unexpectedly intimate – conversation about Cloud Computing in the enterprise.

The event was organised by London consultancy firm BroadGroup, and ably Chaired by Tim Jackson. BroadGroup were also pitching their (possibly valuable) new report on ‘the rise and meaning of Cloud Computing,’ but even with my £100 attendee’s discount the £995/ £1,295 price tag is a little too steep for me to buy and review a copy here.

Travel delays meant that I missed the pre-lunch sessions on the first day; ‘Making Money from Cloud Computing’ and ‘Corporate IT & Cloud Computing.’ Luckily (for me, at least), opening keynoter JP Rangaswami was also delayed, and I did manage to hear him later in the day. More on that later, but for the sake of completeness here are the abstracts for the sessions I didn’t manage to record myself;

Making Money from Cloud Computing

“The Cloud represents a wide range of service models from SaaS and storage and server capacity to consumer services. Measuring the costs associated with Cloud computing brings with it a range of variables beyond standard data centre colo space and power. The pattern of demand and usage behaviour and the opportunity cost of and required speed to scale for example, represent key factors to consider. In achieving ROI therefore, how quickly will Cloud be adopted? Which market segments will represent critical targets for Cloud services? Is the economic downturn a catalyst for Cloud? Who will be the key enablers? Where will value and competitive advantage be found? Will Cloud disrupt the licensed software model? What are the business models for Cloud, how do they differ and how will they be monetized?”

Corporate IT & Cloud Computing

“With increasing globalization and mobility, as well as escalating competitive forces and productivity requirements, corporations of all sizes have started to rethink how they should operate. This process is accelerating as the current downturn continues to impact revenues. How quickly will Cloud be adopted in the Enterprise? How difficult will it be for enterprises to switch from one Cloud provider to another? Is lock-in more likely? Which Cloud solutions will prove the best fit for large enterprises and how quickly will Cloud technologies accelerate efficiencies that deliver bottom line results at a time of economic downturn? Or, is Cloud Computing just another tool in the IT box?”

Finance, Investors & Cloud Computing

After lunch, Alexis Richardson of Cohesive FT, Greg Marsh of Index Ventures and Duncan Johnston-Watt of Cloudsoft shared their views on key opportunities for investors in the Cloud.

Alexis began by discussing discussing the economic disruption posed by adoption of Cloud Computing, but warned that Gartner‘s Trough of Disillusionment is not far ahead of us with so many organisations today ‘massively over-promising on the Cloud.’ He suggested that adoption of Cloud Computing is ‘mostly a US phenomenon’ just now, with Europe allegedly ’18 months behind.’

“Independence from the computer is a bigger market opportunity than the adoption of the PC in the first place.”

Clouds are seeing ‘plenty of adoption’ from consumers and small business lured by the flexibility, scalability and on-demand pricing. Despite 58% of CIOs at larger organisations feeling that Cloud Computing will ’cause a radical shift,’ enterprise adoption tends to be more cautious.

Alexis characterised the two extremes, suggesting that consumers and small businesses are welcoming the Cloud, saying

“Yes we can!”

Large enterprises, on the other hand, remain more cautious, tending to

“Just say ‘No!'”

Next up was Greg Marsh, who reminded the audience that Index Ventures is an early stage venture firm, established in 1996, and currently with $2bn under management. Most of their portfolio is in Europe, and includes well-known names such as Love Film, Skype, Last.fm and MySQL. In the Cloud space, RightScale is one of their investments.

Greg suggested that ‘Cloud’ is a broad term that includes many innovations from ‘Grid done right’ to Software as a Service, but stressed that investors are looking for a number of things before giving their money to a new prospect;

  • smart teams
  • pursuit of opportunities that are massively scalable
  • low capital intensity
  • market savvy
  • A Big Idea

In discussion a member of the audience posed an interesting question, asking whether there were ‘problems of scale’ to counter the ‘economies of scale’ often cited for Cloud-based infrastructure and services. Many of Google’s services, for example, might simply remain in beta because it’s impossible to define and deliver the sorts of reliability and up-time that we would expect from a commercial service. Whilst these services are generally extremely reliable across the board, the reliance upon large numbers of machines in numerous data centres running innumerable processes makes it extremely likely that someone is going to receive a bad service… and there’s very little that Google et al can do about it.

JP Rangaswami at Reboot 8.
Image via Wikipedia

JP Rangaswami

BT Design’s MD for Innovation & Strategy, JP Rangaswami, then delivered his delayed keynote and began by reminding the audience of Gartner’s definition of Cloud Computing. Broadly, he paraphrased, Gartner stress delivery of service,  scalable elasticity,  multi-tenancy and  a basis in open standards. For those unable to access Gartner’s reports, one of the authors recently did some public paraphrasing of his own.

All of these, Rangaswami argued, were available and understood a decade or more ago.

A theme running through Rangaswami’s presentation – and the final panel of the day – was the suggestion that many potential beneficiaries of Cloud Computing are in danger of being left behind;

“while we pretend the Cloud isn’t happening, while we bring up excuses of security, latency, governance… there are the new Googles and the new Amazons building out… because they don’t care.”

Whilst agreeing that the guarantees and assurances offered by Service Level Agreements, due diligence and contracts can be important,

“let’s not waste time worrying about [the lack of an SLA]. What’s really exciting is today’s equivalent of Google or Amazon or eBay… looking at what’s available today and extending it”

He pointed to the example of Animoto, able to scale rapidly thanks to their use of Cloud infrastructure;

“They weren’t agonising over Governance… they just did it.  25,000 users to 250,000 users. 50 instances to 3,000+ instances in three days.”

Rangaswami suggested that three characteristics make Cloud Computing different to the individually similar technologies preceding it;

  • it’s about mobile;
  • it’s about data (from ‘data centre’ to ‘data centric’);
  • it’s about different values.

“The opportunities look different today. The next Google will be invented by a guy with a credit card. No Venture Capital. No capital needed.

The ‘boring’ issues don’t go away… but they can be dealt with later…”

Technologies & Cloud Computing

The final session of the day explored Technologies and Cloud Computing, where JP and I joined Rightscale CEO Mike Crandell and Amazon Web Services Evangelist Simone Brunozzi on the stage. I was too busy participating to take notes, but felt like it went well.

Day Two: Infrastructure & Cloud Computing

Missing the first session on ‘Consumers & Cloud Computing’ for a conference call, my Day Two began with a panel comprising Xcalibre CEO Tony Lucas, Quest Software‘s European CTO Joe Baguley, Endeavors Technologies‘ CTO Arthur Hitomi, Telkom SA‘s David Lupafya and Alog Data Centres Do Brasil‘s President Sidney Breyer.

Tony talked about the lack of spare capacity to power new data centres in and around London, and pointed to the benefits of off-shoring new data centres to Iceland where power and cooling are plentiful, investment money is welcome, and network links are excellent.

“Is UK investment in the network actually to ensure we can reach our own content, off-shored to places where it can be stored and managed more efficiently?”

David spoke knowledgeably about the rather different situation in southern Africa, illustrating challenges facing the area whilst also demonstrating situations in which infrastructure and practice is actually moving beyond the ‘more developed’ countries of the world.

Privacy, Regulation, Security and Cloud Computing

In a session that delved into the morass of complex legal issues surrounding the movement and storage of data, we learned that ‘choice of law’ clauses in contracts may not be worth the paper upon which they are printed, that European Data Protection laws may be difficult to enforce upon sub-contractors of sub-contractors of sub-contractors in a contract, and of the Affero Clause’s importance in protecting the rights of Cloud developers. Welcome relief from the language of law came in the form of HP Labs‘ Miranda Mowbray, who managed to repeatedly and relevantly link her discussion of legal issues to The Hound of the Baskervilles; complete with readings and foggy slides.

‘Icy Tube Sign‘ image © Sheila Thomson, 2009.

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