Re: private cloud – IMHO it is not just vendor hype. There is a lot of that, no doubt, and it is certainly the job of analysts to cut through the hyper, and not just regurgitate it like I have seen some doing.

But in my upcoming research I found over 60% of enterprises that have adopted or are planning for cloud usage in the next 12 months (still a relatively small population overall, of course) are adopting a private cloud. Public cloud is well behind.

Maybe they are all being led astray by vendors and analysts? I don’t think so, because other data points show they have many reasons to avoid public clouds.

Still, I do think there is a place for public cloud – the non-critical apps you mentioned are an ideal starting point, as are areas like test/dev or data backup. But most public cloud providers (perhaps all?) will need better manageability, security, audit, control, etc. – and SLAs with teeth to back them up – before you will convince most CIOs to put much of anything in the public cloud.

Public clouds would do a much better job of securing your infrastructure than your own IT can ever do. Private clouds are a non starter, IMO. Its a marketing term with no technical merits behind it, and I wish analysts would stop buying the vendor hype on private clouds.

Thanks for the comment. It is true that virtualization can cost, but do you think the enterprises doing it (96% by EMA’s research) are losing money because of those costs? My research shows that around 90% experience a measurable cost reduction from virtualization. So I don’t think that is the big problem.

I do believe that cloud (public and private) can have positive financial benefits. My upcoming research (‘The Responsible Cloud’) will show this very clearly. However, it will also show skills, management, and even license costs continue to be an issue with cloud computing. Plus, of course, how public cloud especially raises a lot of other issues. Cloud can actually end up more expensive than internal IT, at least for some.

On balance, I actually think there is a place for both, but in the short term I maintain that consolidation with virtualization is low-hanging fruit to achieve real, measurable cost savings. And it doesn’t need to be expensive – there are plenty of free options out there.

In the end, that depresses me. So, instead, I like your take, Andi. Find tactical projects that can be a launch pad for bigger, more strategic things. But don’t lose site of the needed short-term ROI. The longer your list becomes, the better for CIOs (and, frankly, their businesses). We’re certainly working on doing that…

The other thing customers react very well to is finding ways to make those initial projects self-funding if at all possible.

On contrary, expanding your capacity into a public cloud is lot more cost effective. You don’t pay for VMware or Xen licenses, you don’t need a virtualization expert on your payrolls and you can actually STOP buying new hardware.

There is no excuse for non mission critical apps and servers to not move to the public cloud and reduce both CAPEX and OPEX.

IMHO, To provide competitive edge to the business and to enable the business in their strategic objectives, the CIO’s also need to keep track of new and evolving technologies. They need to have a timeline chart (for lack of a better example) to plot the evolution of technologies of interest that are currently on the horizon, map these evolving technologies to business objectives, explore, experiment & select the ones they think can enable business and make plans on using these technologies to provide advantage to the business in this highly competitive market.

For example, way back in 2003 (I think) when server virtualization especially on wintel platform hit the headlines, it was still a new technology & product vendors were still evolving their offerings. A strategically thinking CIO would have kept this technology on their radar, experimented early and by 2006-2007 when the vendor offerings reached a fairly matured stage, deployed it and reaped the benefits. There are so many cases that I have dealt with where the organizations are beginning to move into the space of server virtualization now.

Similarly, last year when cloud computing starting making the internet chatter, some of the CIO’s and their teams would have noticed and evaluated its potential in a much broader sense than simply as means to contain costs. Similarly, evolving concepts like web 2.0 etc should have been on the radar of CIO’s. Some of these have actually experimented with the use of these technologies to enable the business users like research & development teams (as a pilot projects), sales force etc and explore if these technologies can improve agility and cut down time to market of new products etc. As and when these technologies mature (we are aware of shortcomings of cloud in its current form), these CIOs will be ready to exploit these technologies for enabling business objectives. An early recognition of the potential of a technology can help CIO’s reduce the time to deploy while increasing the potential benefit (strategic, financial, competitive etc).

By this I don’t mean to suggest that all new technologies can provide benefits that are relevant to a business environment and hence need to be adopted. Like I mentioned earlier, ‘relevant technologies that have the potential to enable strategic objectives’ need to be tracked, experimented and if found favorable, planned for adoption in the long run.