Cloud Computing - Part 1 - Technological Innovation

http://cloudcomputingexpo.com/

I will be attending the 7th International Cloud Computing Expo at Santa Clara, CA next week.
My blog will have some posts reflecting the experiences in this convention.

Accordingly, I will be providing a series of posts before the conference that will serve as a good basic introduction to the benefits, challenges, and risks associated with Cloud Computing technologies and business strategies.

I have been a lead user and user-innovator of computer technology for about 20 years. My MIT SDM education has provided me with powerful frameworks by which I can better study the strengths and weaknesses of technologies and their interaction in the greater business landscape.

A core part of the SDM program involved the study of technology dvelopment/deployment and business strategy. The next four foundation-level posts are directly based upon a series of four papers that I prepared as part in course 15.965 - Technology Strategy for SDM, during Spring 2009 [1]. These papers focused on a study of the different technological and business opportunities associated with Cloud Computing.

Please note that these blog posts aim to bring the discussion to a level that is more understandable to the general technology-saavy public. A thorough examination of the technology and strategy associated with Cloud Computing technologies would easily qualify for a doctorate thesis.

How Do We Identify the Benefit of Cloud Computing?

Before we can determine the benefits of cloud computing, we must identify what different parameters we should consider when comparing technologies. The most evident key parameters that are associated with Cloud Computing and its technological predecessors are as follows (in no particular order):

• Capital Costs – What initial costs are required for Cloud Computing? (CapEx)
• Operational Costs - What operational and service costs are required? (OpEx)
• Data / Application Access Speed – How quickly can the required information or application become available to the user once it is requested?
• Data Reliability – Can the data be stored and maintained reliably?
• Data Security – How secure is the data from unauthorized access?
• Customization Flexibility – How customizable are applications to meet end-user needs?
• Data Storage Capacity – What limits to storage capacities exist compared to other technologies?
• Portability – How easily can the data be accessed from different locations of the world? From different classes of devices?
• Maintenance/Troubleshooting – What type of overhead and troubleshooting is required?

What are Cloud Computing's Predecessors and Current Competitors?

Any new technology like Cloud Computing represents a step in a continuous evolution of a broader field of technologies and refinement of its application and integration by other industries and end users. Keeping this perspective, potential competing technologies to Cloud Computing reflect not only current technologies and their future potential, but also legacy methodologies whose initial use predate the existence of computers such as:

• Paper Archiving (in use since Ancient Egypt)
• Advantages: Ability to be fully customized to an end-user’s needs; Highest level of security; Has a low captial cost and does not require constant maintenance.
• Disadvantages: Extremely slow access speed (no electronic transfer); Low amount of data per unit storage volume; No remote access (not electronic). 

• Magnetic Hard Disk Drives (in use since the 1950’s; since 1970’s for personal computers)
• Advantages: High level of customization; Allows for high access speeds to data.
• Disadvantages: Incorporated in 1 computer; Susceptible to dynamic and thermal shocks, as well as magnetic fields.

• Internal Flash Drives (in use since late 1990’s)
• Advantages: Same advantages as magnetic hard disk drives with the increased durability and read speeds that Flash memory provides
• Disadvantages: Incorporated in 1 computer; Low write speeds.

• Portable Flash Drives (in use since late 1990’s)
• Advantages: Increased durability compared to other portable media; Portable; User customizable
• Disadvantages: Limited storage capacity; Can be lost or stolen; Low write speeds.

•  Optical Storage (in use since mid to late 1980’s)
• Advantages: Reliability if media is protected from scratches and light; User customizable.
• Disadvantages: Limited storage capacity; Can be lost or stolen; Only feasible for storage of data.

• Magnetic Data Tape Storage (in use since the 1950’s; since 1970’s for personal computers)
• Advantages: Relatively low operational cost; Large storage capacity.
• Disadvantages: Susceptible to magnetic fields; Magnetic tape will decay over time; Access speed is low.

• Local Servers (in use since the 1960’s with Terminals/Mainframes; since 1980’s for personal computers)
• Advantages: High access speeds; Large expandable storage capacity; Accessible from remote locations.
• Disadvantages: High initial costs; Continuous maintenance by end-user’s corporation required.

• Cloud Computing (modern use since 2006/2007)
• Advantages: Virtually unlimited storage capacity; Centralized/standardized data location and format allows for high portability of applications and data; Little initial and maintenance cost.
• Disadvantages: Access speeds limited by internet access speed; Lack of security and reliability; Little application customization available

Cloud Computing attempts to present a practical solution to the portability and storage requirements of an increasingly networked global world. Individuals would use “Software-as-a-Service – hosted services with subscription or on-demand pricing.” [6]. This business model is really a revival of a much older business model before the advent of personal computers where mainframe resources were allocated to multiple terminals through time-sharing technology first developed at M.I.T. in 1960 [7], allowing users to take advantage of the computing power and storage capability that could only feasibly exist in one location.

Cloud Computing takes this concept, with the exception of centralized processing power, to a global scale through the use of the internet. While its benefits mirror those of its predecessor (the whole truly becomes greater than the sum of its parts), there are major obstacles that still need to be overcome. Since the central server is no longer within the direct control of the end-user’s corporation, there are major security and ownership issues that need to be addressed. Additionally, the download and upload access speed over most current internet connections is not able to match the transfer rates of a wired or wireless intra-office networks, let alone the speed seen between an internal hard disk drive with its motherboard.

How Does Cloud Computing Compare with Other Technologies?

A better understanding of the strengths and weaknesses of competing technologies can be gained by assigning quantitative rankings for how each technology addresses each key parameter. A sum of the rankings for each technology might also be seen as a technology’s overall longevity to compete in a marketplace with user groups that share the same key parameters.

Note: 
With the increasing capacity of Flash Drives now greater than single-layer DVD and starting to surpass dual-layer DVD, Flash Drives and Optical Storage should probably exchange places in the rankings.

Initial Conclusions ...
As can be seen in Table 1, the only technologies that have totals greater than Cloud Computing are both internal flash and magnetic hard disk drives. The primary reason both of these technologies could still compete with Cloud Computing in the long term is the unique customization and high access speeds that an internal hard disk drive offers. However, Cloud Computing could offer a substantial benefit to corporations that do not use specialized applications and do not have unusual security requirements.

This trend has been confirmed by Infosecurity Europe, in industry tradeshow, which noted that in “470 organizations ... 75% of them intend to reallocate or increase their budgets to secure cloud computing and software as a service in the next 12 months.”[8]

Please note that in the table, each key factor has equal weighting. This equal weighting is not be realistic for some industries, such as Financial Services, which have stringent security requirements. An exploration of these differences will be touched upon in Part 2.

However, as can also be seen, there must be further advances made in general security and reliability. In July 2008, Amazon’s S3 Cloud Computing storage servers ceased replying to user request for 8 hours due to a server software malfunction. [6] Similar isolated instances with other cloud services have occurred in 2009 and 2010.

The discussion of Cloud Computing will be refined expanded upon in the next part of this series:

Cloud Computing - Part 2 - Demand Opportunity

References:
[1]    Atencio, Charles, “Technological Innovation of Cloud Computing with Personal Computers”, 15.965 - Technology and Strategy (Massachusetts Institute of Technology, Spring 2009)
[6]    Bright, Peter, “Microsoft Bets on Cloud Computing as Amazon Suffers Outage.” July, 29, 2008, Ars Technica, http://arstechnica.com/microsoft/news/2008/07/microsoft-bets-on-cloud-computing-as- amazon-suffers-outage.ars
[7]    McCarthy, John, “Reminiscences on the History of Time Sharing”, 1983, http://www-formal.stanford.edu/jmc/history/timesharing/timesharing.html
[8]    O’Gara, Maureen, “Call for Cloud Security Guidelines Heard”, Cloud Computing Journal, February 20, 2009, http://cloudcomputing.sys-con.com/node/849793