Thomas Bittman

I’m sure I could come up with more than four, but let’s throw a few out there that I continue to hear from people trying to understand the phenomenon. Don’t misunderstand my intention here – I believe cloud computing will be huge, especially for commodity services, especially for small businesses and start-ups, especially for new and innovative applications that will leverage massive scale and low barrier to entry. But…

Myth: There will be a “big switch”
Fact: There will be a slow migration (including development of private cloud services), the migration will take decades, and even then quite a bit of IT will stay in-house; in fact, most of the interesting stuff will be hybrid models, long-term.

The electricity analogy really doesn’t fit well. Unlike electricity distribution (using AC instead of on-premises DC), IT is evolving at an extremely rapid rate. The number of enterprises generating their own electricity in 1887 was miniscule compared to the number of enterprises generating their own IT today. Even so, the electricity grid did not take place over virtually overnight – it took more than two decades before centralized utilities produced more than half of the electrical production in the U.S.

In many ways, the invention of AC was like the invention of the Internet. So why hasn’t computing across the Internet replaced enterprise computing yet? In IT, the “distribution” mechanism has been in existence for more than a decade. What’s really changed are technologies that enable economies of scale and sharing. We should not ignore the fact that enterprises can gain some economies of scale themselves, internally, for example, through virtualization – and enterprises aren’t ignoring it. The evolution toward cloud computing is a multi-variable equation, and does not have an inevitable conversion of everything to cloud services.

Myth: Cloud computing is just an evolution of “fill in the blank”
Fact: Cloud computing did not appear out of nowhere. Some say it is just the next version of outsourcing. Some say the next version of the web. Some say the natural evolution of virtualization. I say it’s all the above. The web created the standards and connectivity needed to make cloud computing possible. But, economies of scale do not occur unless you have technologies at the back-end that enable efficient technology sharing – multitenant applications, virtual machines, parallel programming mechanisms, automation, etc. Sprinkle in a growing demand for speed in the marketplace, and the industrialization of IT (including increased commoditization of hardware and open source), and cloud computing – has been evolving for years. And still has a ways to go.

Myth: Only megaproviders will win
Fact: There are diminishing returns to economies of scale, there are many fragmented markets that have good enough scale for smaller providers, and innovation makes provider agility a critical offsetter to size. We’re not going to have a handful of megaproviders, we’re going to have thousands of providers, and it will be very Darwinian.

Myth: Cloud computing is about IT commoditization
Fact: While services offered in the cloud may be commoditizing, the usage of those services may not – new, innovative businesses, proprietary analysis of data in the cloud, etc. – new applications matter. In fact, innovative use of cloud computing services will be be a huge reason why IT does matter, and innovative use of IT will remain a critical business differentiator.

And be careful – cloud computing services are not always cheaper. Providers gotta make a living. Amazon’s recent introduction of Reserved Instances was both to help Amazon plan and manage capacity, and to lower the price to compare better when workloads are not dramatically elastic. There’s a reason that some startups born on Amazon created their own data centers as they got bigger and their businesses became more predictable.

Is it a private cloud service, or a public cloud service? It’s not quite so binary. I first explored this in my post Virtual Cloud Privacy is Gray a few months ago. There are two relative dimensions that determine how “private” or how “public” a cloud service really is:

Service Control/Ownership: There are two ends of a spectrum here – complete implementation ownership, and complete lack of ownership and control of implementation. But there will be many examples in between of partial control, shared ownership, etc.

Service Access: Also two ends to this spectrum – at one end, usage is extremely exclusive, while at the other end, anyone who chooses can access the service. Again, there will be many examples in between of limited access, industry-only access, controlled partner access, etc.

These two dimensions are coupled at the extremes, but there are many variations in between. Each has different security/privacy, cost, customization and elasticity attributes.

Many of the cloud services that emerge in the next few years will fall somewhere in the middle (consider the customers choosing Exchange Online Dedicated, or paying for Reserved Instances from Amazon). Understanding the trade-offs and options is critical. This is an important area of research for me right now (two research notes completed, three more in progress!).

But cloud computing doesn’t need a revolution – capitalism will lead the evolution of cloud computing.

With only a few word changes, the opening of the Communist Manifesto could be easily inserted into the Open Cloud Manifesto, announced March 30, 2009: 

“A spectre is haunting the cloud – the spectre of openness and standards. Amazon, Google, Microsoft and Salesforce.com have entered into a holy alliance to exorcise this spectre…”

This essentially describes the fear and the motivations behind the supporters of the Open Cloud Manifesto. Supported by a number of vendors who do not have a major cloud presence, including Cisco, EMC, IBM, Sun Microsystems and VMware. Not supported by vendors who already have a major cloud presence, notably Amazon, Google, Microsoft and Salesforce.com. Notice a trend?

The manifesto is simple and straightforward – so simple that the six “Principles of an Open Cloud” can be summarized as “Don’t use market position to lock-in customers, and drive cloud adoption through standards and collaboration directed toward customer needs, not provider needs.” In other words, stop building cloud services and stealing our customers until we get our act together to build cloud-based solutions for them.

Clearly the principles laid out in the manifesto are noble ones, and worthy of pursuit. But we’ve seen this play before. Vendor successfully creates a new market space, competitors cry foul and demand open standards and interoperability. “We want some of your customers!” The only difference with cloud computing is this is all taking place very, very quickly.

In the end – sorry Karl – capitalism will lead the evolution of cloud computing. It starts with innovators who pave the way. Let Amazon, Google, Microsoft and Salesforce.com build their proprietary cloud computing services. We need pioneers before we need standards.

As this market matures, customers will demand interoperability, portability, and federation with enterprise private cloud services. It is in the interests of newcomers to the cloud computing market to work together. The longer standards for cloud provider interoperability do not exist, the longer the entrenched cloud computing innovators will own the market.

So I have no problem with the Open Cloud Manifesto. It’s driven by capitalism – and in the end, the market will benefit. But don’t expect much soon, and don’t expect Amazon, Google, Microsoft or Salesforce.com to jump on board anytime soon. In fact, I’m sure they will be bashing the Manifesto and standards efforts for quite some time.

Instead, it’s a stepping stone. It’s about embracing cloud concepts earlier, and about enabling the flexibility to use public cloud computing services as soon as they meet requirements. Getting some of the benefits of cloud computing, but contained within the enterprise.

I had a busy week along the west coast, meeting individually with fifteen different clients, presenting about cloud computing to groups in three cities, and doing some deep strategy dives with a few vendors.

Private cloud computing – and the point made in the first paragraph – came up in every conversation. I talked to people who already had private cloud computing services, or had some being developed, or were building technologies to make private cloud computing effective. I also talked to a few companies where private cloud computing will not make sense – a wasted investment, because their needs for the right services will be available in the public cloud soon enough.

The real issue is determining a strategy for each service. Some services are not destined for the cloud, and should evolve in a very different direction. Some services should be converted to a public cloud offering soon. Some services are candidates for the public cloud, but for one reason or another, the public cloud offerings aren’t ready yet.

For the latter services, it’s a question of return on investment. When will the public cloud service be “ready”? What is the cost of doing nothing before I migrate? What kind of investment have I already made internally? Is there a business case for investing in cloud concepts for this service internally? Are there even technologies available that can help me internally?

It will all come down to understanding the enterprise service portfolio, and building a vision and a roadmap for each service. For some of them, private cloud computing might be the way to go.

I’ve been putting a lot of time into this lately. My inquiries have shifted heavily to cloud computing in the past few months (away from server virtualization, another hot topic). I have six research notes in progress on the subject – describing the phenomenon, describing examples of private cloud computing services that others have set up or are in the process of setting up, discussing when it does and does not make sense, etc.

More later!

One interesting question that cloud computing raises is the importance of customer intimacy between IT and its business customers. Improving the relationship between IT and the business has always been considered a major goal – aligning IT and business strategies, integrating IT and business processes, ensuring IT people understand the business and vice versa. Strategy alignment leads to more proactive IT investments and innovations that help the business grow, and more business actions that leverage new and differentiating technologies.

On the face of it, cloud computing calls a halt to that – the big switch replaces intimacy with interface. Tightly define how the business communicates with IT, and requests IT services – through a self-service and programmatic interface. If you believe that IT is not differentiating, intimacy is a thing of the past.

I think there’s another way to look at it.

Cloud computing doesn’t eliminate the need for intimacy between IT and the business. I think it is forcing us to look at customer relationship differently.

• Right-sizing intimacy: The level of intimacy needs are different for every service. Commodity, non-differentiating services need little to no intimacy between IT and the customer. Highly experimental, differentiating technology needs a tremendous amount of synergy between IT and the customer. Every service is different.
• Managing customer relationship: Intimacy and customer relationship does not require a person to sit between the provider and the customer. In cloud computing, intimacy means understanding your market, and adjusting your service choices, service offerings, and their interfaces to meet changing market needs.

A modern infrastructure and operations organization will have services that are highly static and self-service, services that are highly dynamic and differentiating, and everything in between. Where intimacy is not needed, it should be removed and replaced entirely with a self-service interface. These services are great candidates for cloud computing (or private cloud computing, if public cloud offerings aren’t yet mature).

Where intimacy provides unique and differentiating value, services-orientation is still important. A codified interface is still important. IT needs to work closer with the business to understand service requirements, changing the service offering and the interfaces to meet those needs. Could these services go to the cloud? Less likely, but sure – as long as there is a way for the provider to collect feedback and information on changing requirements from customers.

Cloud computing won’t kill intimacy for all IT services, but intimacy will become more focused on responding to customer needs by managing the interface between providers and customers. Intimacy will be a reason that some services stay on-premises, and possibly evolve to become private cloud services. Intimacy will be a differentiator for some cloud computing providers, who focus on understanding their markets, listening to customers, and evolving their service offerings rapidly.

At VMworld Europe 2009, Citrix made an important virtualization industry announcement – their XenServer package will carry no license price (just support). This package includes centralized management of distributed VMs, and live migration capability.

It isn’t everything you need to manage a virtual machine pool, but many smaller companies who might have avoided virtualization completely will do this, and add more management tools later. It will broaden the market.

More importantly, from an industry perspective: this puts pressure on VMware – not only from Citrix, but also probably from Microsoft. Why Microsoft? Because once a competitor in the market offers free functionality, Microsoft doesn’t need to worry about antitrust concerns, and can do it themselves. Think live migration and some management.

In addition, Citrix also has opportunity with cloud computing providers with this announcement. Xen is heavily used “in the cloud.” Citrix might be able to convince some of them to use XenServer as a base – and possibly sell Citrix management tools (Essentials) on top of that. The battle for cloud virtualization has begun.

Xen has been splintered in many distributions in the past few years – Citrix (XenSource), Virtual Iron, Novell, Red Hat, Oracle, Sun. Will Citrix be able to rally any of these together on XenServer? Now that could be interesting.

We spend a lot of time at Gartner looking ahead. But it’s also fun to look at what might have been…

• What if no one had developed an x86 hypervisor? How well would multi-core x86 processors be selling today?
• What if Microsoft had acquired VMware in 2001? Would they have snuffed it out (until something else like Xen came along), or used it to develop their own architecture sooner than Hyper-V in 2008?
• What if Microsoft had aggressively improved the ability to run multiple workloads on Windows (like Solaris containers)? What if Microsoft had acquired SWSoft (Virtuozzo) years ago?
• What if VMware had started giving away ESX Server for free in 2005? Sooner? Would they have been able to grow more business in small business – the market that Microsoft is winning today?
• What if IBM or HP had jumped into the Xen market in 2005? And built their own virtualization management suites, integrated with their broad management frameworks? What if either had acquired VMware in 2001?
• What if Intel had acquired VMware? Could they have used that to gain more control in the Microsoft/Intel relationship with the OEMs? Management tools?
• What if Microsoft had delivered Hyper-V two years earlier?
• What if Oracle, Sun, Novell and Red Hat had agreed to leverage Citrix XenServer instead of their own versions of Xen?
• What if VMware had acquired Opsware, or BladeLogic?
• What if VMware had acquired Citrix – before Citrix bought XenSource? Who would be Microsoft’s partner in the competition with VMware?
• What if Red Hat had acquired XenSource?
• What if Xen didn’t exist? Would Microsoft be able to embed and give away virtualization capability without raising new antitrust concerns?

I can go on and on – but it’s Friday night. Can you think of a few?

My last blog entry caused quite a ruckus. While the term “private cloud” has been in use for at least a year, there are still semantic, moral and religious issues with the term. I respect the issues, but I have also found the anti-private-cloud zealots to be a minority. In the past week alone, I met with fifteen different companies (vendors and users), and most of the conversations revolved around the private cloud concept. All of the vendors are embracing the term (no surprise). More importantly, the users were also embracing the term, the concept, and the strategy.

So how do you know you’ve arrived? What is different from a private cloud versus a well-run IT organization?

I can think of four fundamental attributes:

1. Services-oriented. The IT organization sells services, and the IT customer only deals with IT through service offerings (self-service).
2. Variable Pricing. Based on usage. The IT organization maximizes technology sharing and automation for efficiency.
3. Elasticity. Customers deploy/grow/shrink/retire services quickly. IT is architected to ensure fluid scaling on demand.
4. Independence. The IT organization could move a service to the public cloud by flipping a switch. Likewise, the IT organization could choose to open their services to external customers easily. I even talked to a company today interested in take their services “public” sometime in the future.

There are probably many more, but I think this captures the essence. What am I missing?

There’s an argument over whether the term “cloud” can be used to describe the changes taking place in internal IT architectures. How silly! Regardless of the term, there is a major trend playing out over the next few years where internal IT providers want to make fundamental changes so that they behave and provide similar benefits (on smaller scale) as cloud computing providers.

I believe that enterprises will spend more money building private cloud computing services over the next three years than buying services from cloud computing providers. But those investments will also make them better cloud computing customers in the future.

Building a private cloud computing environment is not just a technology thing – it also changes management processes, organization/culture, and relationship with business customers (our Infrastructure and Operations Maturity Model has a roadmap for all four). And these changes will make it easier for an IT organization and its customers to make good cloudsourcing decisions and transitions in the future.

We will even see several organizations evolve from being private cloud computing providers to becoming public cloud computing providers.

Can you find a better term? Go ahead. But you’ll be fighting an uphill battle. At Gartner, more and more of our clients are trying to understand what cloud computing can provide today, how it will evolve, what they should do now to prepare, and what they can learn from cloud computing. We are talking about private cloud computing on a daily basis. Get over it.

21st century skills have been a hot topic in the world of education, and there is an overwhelming amount of 21st century skill information on the web. However, it’s not easy for every education professional to absorb what it means to them and their district.

While many core skills haven’t changed, some are becoming more critical, and other skills are new for the 21st century. The world has been changing, in two discontinuous ways, since the early 1990s:

1. The world is more connected, flatter, and moving faster.
   Technology evolution, a maturing world economy, dynamic teaming and collaboration. Windows of opportunity are getting smaller as news flows faster. Reaction time is a critical differentiator.
2. Information is growing rapidly – and all can contribute.
   Information is exploding – but some is accurate, some is not, some are opinions, some are lies, some are personal expressions. Information in the new world is not static – it is interactive and dynamic.

So based on these changes, what are the new and growing skills required in the 21st century? For the benefit of my own school district – and anyone trying to get their arms around the fundamentals – I’ve narrowed the list to seven key skills:

Technology Skills

1. Information Literacy: Navigating, interpreting and effectively using the explosion of information available to us is critical in the 21st century.
2. Media Literacy: IM streams, blogs, streaming video, web conferences – information is being channeled through ever-changing media. The ability to navigate and interpret those media in context, as well as the ability to use those media effectively to communicate are critical skills.
3. Information Technology Literacy: The tools that we use to create or access media that contain information are constantly evolving. Understanding exactly which tools to use, and when, in a constantly evolving tools environment is a critical skill.

People Skills

1. Global Literacy: The world is more connected, and insularity is not an option. Awareness, social and cross-cultural skills are valuable.
2. Flexibility & Adaptability: The world has always been changing, but change happens – and is communicated – faster. Agility is critical in the 21st century.
3. High-Level Knowledge Skills: In a flat world, lower-level skills are a commodity. Critical thinking, problem-solving, creativity and innovation are valuable.
4. Communication & Collaboration: A connected world requires better communication skills, and the ability to dynamically team to accomplish tasks.

Want to dive deeper? I’d recommend the Partnership for 21st Century Skills. And my colleague Daryl Plummer’s post on 20th century thinking. And, of course, my own thoughts on the impact of the web, social software and cloud computing on education. Good luck, and I’d love comments!