Private Cloud is In for Big Enterprises: Nicholas CarrThough Private Cloud may ensure security and privacy, and is increas...
It‘s important to recognize, however, that dedicated private clouds will in most cases be atransitional technology, a step...
In addition to new tools for integrating and managing cloud services, the fulfillment of thepromise of cloud computing wil...
About Nicholas G. CarrNicholas Carr (aka Nick) writes about technology, culture, and economics. His books havebeen transla...
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Private Cloud is In for Big Enterprises: Nicholas Carr


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Private Cloud is In for Big Enterprises: Nicholas Carr

  1. 1. Private Cloud is In for Big Enterprises: Nicholas CarrThough Private Cloud may ensure security and privacy, and is increasingly preferred by largecompanies; eventually they will end up being operated only to meet legal or regulatoryrequirements. Read Nicholas Carr’s Afterword to his bestseller The Big Switch: Rewiring theWorld, from Edison to Google and know what’s new in the offering for the CIOs looking forCloud Computing Services with respect to their own vertical.What may, over the next few years, represent the largest cloud-inspired area of investmentfor large companies has little to do with the purchase of web based services from outsideutilities. Rather, it involves the construction of so called private clouds highly virtualized,dedicated data centers that essentially serve as in house IT utilities. A private cloud can beowned and operated by the company that uses it or, as is increasingly the case, it can be builtand run on the company‘s behalf by an outsourcing or hosting firm or other IT servicescompany. Because the transformation of traditional data centers into private clouds typicallyrequires substantial investments in new hardware and software, to facilitate high degrees ofvirtualization and automation, their construction has been a boon to many IT vendors.Deutsche Bank predicts that investments in private clouds will reach $20 billion in 2012.The case for a private cloud is often compelling today. Because they typically have muchhigher levels of capacity utilization and scalability than the traditional data centers theyreplace, they can allow a company to gain many of the scale economies and speed andflexibility benefits of the public cloud while avoiding the security concerns, contracting issues,and other uncertainties that currently surround pure utility computing. Just as many largemanufacturers originally constructed their own in house electricity generating stations early inthe last century, so many large businesses today are building their own in-house clouds.FedEx, a long-time IT pacesetter that relies on an array of custom applications to coordinatetime sensitive shipments around the globe, is in the process of moving to a private cloud. It isin the midst of a major effort to retool its core apps to run on a standardized and highlyvirtualized computing platform, drawing on a common data store as well as a shared set ofdata services, such as the provision of a delivery address. As each app is updated, it is beingmoved into a large new cloud data center the company has constructed in Colorado Springs.FedEx CIO Rob Carter is convinced that the cloud model represents a fundamentalbreakthrough in corporate IT. Whats happening now, he recently told InformationWeek, isthere‘s truly a general purpose computing environment that‘s workload agnostic. You canthrow different kinds of workloads on the same computing server infrastructure. Despite thesignificant data center and application investments entailed in building a private cloud, themodernization effort is delivering a very high return on investment, according to Carter. Forthe first time ever, he explains, you can make investments in a whole new class of technologyfor about the same price of just maintaining the base.
  2. 2. It‘s important to recognize, however, that dedicated private clouds will in most cases be atransitional technology, a stepping stone on the way to true multi tenant systems. At somepoint, after all, private clouds will begin to pay diminishing returns; further gains will requirethe greater scale that can only come from infrastructure and services that are shared amongmany companies rather than within just one company. Even today, the divide between privateand public clouds can be blurry. It‘s possible, for instance, to operate a private cloud as avirtual private data center or virtual private cloud a virtualized assembly of network, security,storage, and compute resources that is dedicated to a single client but runs on a multi tenantsystem. Just as most companies today are comfortable using virtual private networks toensure secure communication while gaining the scale benefits of shared infrastructure, theymay well come to embrace virtual private data centers quickly. In the long run, truly privateclouds may end up being operated only when required to meet legal or regulatoryrequirements for security or privacy.It is also likely that we‘ll see the emergence of vertical clouds clouds dedicated to particularindustries, or to groups of related government agencies or educational institutions, withresources and performance standards geared to the unique needs of those industries. BobRudy, the Avago CIO, has begun talks with other semiconductor CIOs in hopes of creatingvertical clouds in that industry. Sundeep Reddy, vice president and head of IT infrastructure atToys R Us, believes that vertical clouds may provide a way for retail firms to share custom ITinfrastructure while also giving them the leeway to maintain competitive differentiation in theirapplications. It‘s also easy to see how specialized vertical clouds, providing the benefits ofmulti tenancy while ensuring tighter controls than is possible with purely public clouds, couldbe attractive to industries with unique data security requirements such as health care anddefense. Vertical clouds could also enable the efficient sharing of infrastructure andapplications among state governments, schools, nonprofits, and other organizations servingsimilar constituencies.However the tensions between dedicated and multi tenant resources and services play out,one thing seems very clear: for the foreseeable future, most organizations will operate in ahybrid IT environment, using some combination of traditional in-house IT resources, private orvirtual private clouds, vertical clouds, public clouds, and software-as-a-service applications.Developing tools and processes for managing that hybrid environment and integrating diversesets of assets, services, and data stores will be a key challenge for IT departments, and a keycompetitive battlefield for the IT industry. One area particularly ripe for innovation is thecreation of user interfaces and dashboards that allow companies to easily build, integrate,and monitor complex virtualized systems that draw on the full set of cloud assets andsoftware-as-a-service offerings. HCL‘s MyCloud, HP‘s CloudSystem, BMC‘s Cloud LifecycleManagement, and CA‘s AppLogic are examples of the kind of cloud management platformsthat could fundamentally change corporate IT operations, and further reshape the IT industry,in the near future.
  3. 3. In addition to new tools for integrating and managing cloud services, the fulfillment of thepromise of cloud computing will require cloud providers to join together in adopting the kind ofclear, coherent, transparent, and measurable performance standards required to supportcontracts, service level agreements, regulatory compliance, and interoperability. Muchprogress remains to be made in this area. A 2010 study of current cloud computing contracts,undertaken by the Cloud Legal Project at the Centre for Commercial Law Studies, QueenMary, University of London, revealed a lack of consistency in terms, and also indicated thatmost cloud providers currently seek to avoid any warranty of service or acceptance of liability.The World Economic Forum‘s cloud computing research group has underscored the need formore consistent and comprehensive approaches to accountability for how cloud services areprovided as well as the establishment of clear standards for data portability andinteroperability across cloud services.Competition among cloud providers may solve these problems, as those vendors that offerthe clearest terms and standards will likely gain a competitive advantage in the marketplaceforcing other providers to follow suit. But if the industry fails to address these critical issues,governments may need to establish licensing or other certification programs for cloudproviders, guaranteeing a basic level of performance, reliability, and security. Establishingand certifying minimum standards in such areas as privacy, intellectual property protection,and data compatibility will be essential to the broad and accelerated adoption of cloudcomputing in the future, argues R. Srikrishna, executive vice president and head ofinfrastructure services at HCL.An Excerpt from the AfterwordTo read entire Afterword, visit
  4. 4. About Nicholas G. CarrNicholas Carr (aka Nick) writes about technology, culture, and economics. His books havebeen translated into more than 20 languages. Nick has been a columnist for The Guardian inLondon and has written for The Atlantic, The New York Times, The Wall Street Journal,Wired, and other periodicals. Nick is a member of the Encyclopedia Britannicas editorialboard of advisors, is on the steering board of the World Economic Forums cloud computingproject, and writes the popular blog Rough Type. He is a sought-after speaker for academicand corporate events. Earlier in his career, he was executive editor of the Harvard BusinessReview. He holds a B.A. from Dartmouth College and an M.A., in English and AmericanLiterature and Language, from Harvard University.For more information, please visit http://cloudsrollin.comAbout HCL ISDHCL Technologies Infrastructure Services Division, also known as HCL ISD, falls in thecategory of the 4 percent American new public companies that have crossed, or are set tocross, the one billion revenue mark in the first 10 years of their inception. HCL ISD managesmission critical environments and handles over 3 million devices for over 1.7 million endusers. The company’s clientele includes 20 percent of Fortune 100 organizations and hasover 250 customers, Fortune 1000 companies. The companys fast growth has attractedseveral bestselling authors to include the HCL ISD case study in their bestsellers.For more information, please visit