The field of cloud computing is moving rapidly, with old and new players and expired and new trends. Because it moves in several directions at the same time, it is hard to follow. Derrick Harris of GigaOM has published a timely report on the state of cloud computing in conjunction with Structure 2011. This report, A field guide to the cloud: current trends and future , tells you what is happening in the cloud computing marketplace. It is suitable for SMB and enterprise users that are contemplating the adoption of cloud computing and wondering where to start. This report also includes information for those cloud players still under the radar but wanting to compete with the leaders, and for IT and communications vendors wanting to enter the field or to partner with cloud players.
The following is a summary and review of the report. To be clear, my comments are in parentheses and start with “ZK.” The report discusses five current trends and makes predictions for 2012. These are the trends:
- Infrastructure as a service (IaaS)
- Platform as a service (PaaS)
- Software as a service (SaaS)
There are two markets for IaaS: the web and the Internet, and mission critical. The first type is primarily new and smaller companies, including startups. The penetration into this market has been great. The leading vendors include Amazon’s AWS and Rackspace. Derrick calls them IaaS commodity vendors. The revenue information in the commodity IaaS market is not known, because most players are privately held and the financial information is not published. However, the estimated revenues for Amazon AWS and Rackspace are more than $500M and $100M, respectively. The commodity IaaS vendors plan to provide analytics and automation via templates.
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The second market is enterprises that have more stringent requirements before adoption, including security and availability. Derrick’s research (based on the collaborative surveys by GigaOM, The 451 Group and Northbridge Venture Partners) shows security (52%) is more important than availability (30%) among those surveyed. Other requirements include SLAs and prices. The penetration is happening in risk-averse segments but not yet in the mainstream. Another finding is that enterprise customers want VMware solutions in the cloud environment because many of their internal structures are based on VMware solutions. This indicates that enterprises are moving towards the hybrid model. (ZK: This has been discussed in the book Management Strategies for the Cloud Revolution, and companies like Eucalyptus exploit it.) The IaaS vendors will either add more services (such as analytics tools) on top of vanilla IaaS platforms or customize their offerings to vertical markets to attract enterprise customers.
(ZK: I had a hard time seeing how PaaS can be used when the vendor lock-in is obvious, but a lot seems to be happening with PaaS. Read on.)
This area is very hot now, as shown by the acquisition of Heroku by Salesforece.com and Makara by Red Hat. PaaS players like DotCloud, PHP Fog, and CloudBees raised millions in venture funding, and Microsoft has the Windows Azure PaaS offering.
Entering this market is relatively easy for web and Internet companies because their security requirements are not as stringent as those of enterprises. Microsoft seems to be doing fine with their PaaS offering, as they acquire large enterprise customers like Toyota, the Associated Press, and Intuit.
Some difficulties with PaaS include support for only one language and limitation to a platform-specific application stack. Other inhibitors include complexity, interoperability, and lock-in. Now vendors are working to support multiple languages and other frameworks.
Prediction: PaaS will take off as a result of big investments by large vendors, advances in control and choice, and more web and mobile applications. New and dynamic applications are relatively lightweight and must be dynamic enough to enable fast bug fixes and updates as well as to respond to sudden spikes in demand. PaaS provides the ideal platform for those applications. According to the survey, PaaS is still a few years away for mainstream IT users, which will adopt them only when the underlying IaaS layer matures. Amazon’s AWS will improve and add its features, including Elastic Beanstalk.
(ZK: No need to mention that SaaS started all of these somethings-as-a-service.)
The SaaS market is growing nicely. Gartner estimated its size at $9.2B and $10B in 2010 and 2011, respectively. IDC’s number for the entire cloud market is $72.9B by 2015, with SaaS taking 75% of that pie. Of cloud providers surveyed, 74% offer SaaS and email SaaS (such as Gmail and Hotmail), the biggest chunk in the SaaS offerings.
Prediction: Data integration and services integration will play a big role with SaaS. It will be necessary to integrate data from multiple applications from multiple SaaS. In addition, data virtualization will grow. The emerging company in this field is VirtualWorks.
(ZK: There were no surprises about SaaS’s popularity and progress.)
Most cloud storage services are for backup, with the exception of Amazon’s S3 for primary file storage. Cloud storage is as prevalent as SaaS, and 38% of those surveyed use it. Adoption is accelerating. For example, in 2010 S3 had 262B objects, and it will have 700B objects by the end of 2011. Big investments have been made in cloud storage startups. Cloud storage serves both consumers (e.g., DropBox) and enterprises (e.g., Amazon and Rackspace) with different sets of services. One area where cloud storage needs to improve is primary storage. Nasuni is in this segment, providing technologies and services.
Prediction: Cloud storage will shoot next for primary storage for enterprise applications in the cloud. StorSimple is in this segment; it employs technologies similar to those of now-defunct Cirtas. HP and Dell may be in a good position to exploit their storage businesses along with this service. Two areas of interest are network latency, to exchange data in the cloud, and SSD, whose price is going down as more adoptions are expected. Moreover, data privacy will be an issue for cloud storage.
(ZK: I see that smart grid could make good use of cloud storage, as a huge amount of data is constantly created and stored. But I have yet to see any such use.)
Private and Hybrid Cloud
Three relevant trends associated with this subject are penetration of private cloud, PaaS on private cloud, and Openstack.
Private cloud market penetration: Among those surveyed, 63% consider private or hybrid cloud their cloud strategy, and 37% state that they use public cloud only. Eighty percent state that they are moving to either private or hybrid cloud. More companies are moving to adopt private clouds. The top four private cloud startups are Nimbula, Eucalyptus Systems, Cloud.com, and Abiquo, with a total of $73M in venture funding.
PaaS on private cloud: Such PaaS is provided by vendors like CumuLogic, CloudBees, Joyent, and Red Hat. Private IaaS is the base layer.
Openstack: Openstack, as open source, has the potential to make both public and private clouds interoperable and ultimately make hybrid cloud a reality. Influential organizations and companies, including NASA, Rackspace, Cisco, Dell, and Citrix, are becoming involved, along with many smaller companies.
Prediction: Private cloud will be used in conjunction with public cloud to form hybrid cloud, although it is remains to be seen how. Two trends will be advanced hybrid cloud capabilities and a wave of innovation around higher-level features. Some particularly intriguing options for higher-level features would be to integrate Big Data capabilities (e.g., parallel processing with Hadoop), application-level features (e.g., PaaS-like automation or performance monitoring), and support for multiple storage and database options.
Some upcoming technology trends
Two noteworthy trends will be new architectures and best practices (added SLAs and best emerging practices) and network virtualization (networking will be controlled by software rather than networking hardware, attempted by such players as Nicira and Big Switch).
And here are ten more predictions for 2012:
- Commodity IaaS vendors will push for the enterprise market.
- Cloud and Big Data will converge further.
- Solid-state drives will bring whole new applications to both types of IaaS vendors.
- PaaS acquisitions and launches will heat up.
- Contraction will occur in the private cloud space.
- AWS will make an open-source play of some sort.
- Startups addressing data-center-to-cloud latency will raise big money.
- Apple’s iCloud and other consumer-focused cloud services will spur PaaS offerings that target mobile developers.
- Data integration will start giving way to data virtualization.
- A de-facto or an official cloud security standard will emerge after a serious security breach with IaaS or cloud storage.
I recommend this report. Overall, it is well structured and provides good and precise information on the state of cloud computing and its future.