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Table of Contents Executive Summary Foundations of Cloud Computing Obstacles and Considerations Future of Cloud
| Copyright © 2010 Grail Research, LLC
Salesforce.Executive Summary Purpose “Cloud” Buzz This presentation addresses the current state of cloud computing. and standards that have yet to be addressed. Cloud is a powerful tool for mobilizing data. and Amazon. integration constraints. the push to adopt Cloud has been so strong that risks inherent in this model have largely been ignored The recent economic turmoil and the promise of Cloud leading a renaissance of the tech sector are shaping the perspective and appetite for Cloud rather than the readiness of the technology itself. Though price points gained in Cloud can be significant. This is the first in a series of papers written by Grail Research on the topic of cloud computing and the investigation of how businesses are adapting to and taking advantage of Internet-based. that will offer the best approach for business adoption Consider the direct business benefits of Cloud for your company and your individual business needs. look toward applications focused on innovative data protection methods. there are no regulations.com. and its predominance in IT is a foregone conclusion. have exposed the fragility of the Cloud delivery model. and Yankee cite major security concerns with Cloud. enabling organizations to utilize Public Cloud in a private manner Adoption Haste Security Risks Expert Views Opportunity Key Takeaways December 2010 | Copyright © 2010 Grail Research. In fact. Gartner. LLC 3 . weighing against security and privacy concerns. hybrid architectures. privacy. Principal analysts from Forrester. businesses should weigh advantages against the hidden costs of compromised data Analyst sentiment seems to be the sole voice of reason. obstacles to business adoption. however. and the fundamental issues of data security. and innovative data protection methods. on-demand computing News of Cloud is everywhere. or assurances of data protection from a technical perspective Major breaches at Google. Hackers have also highlighted the vulnerabilities of Cloud and issued a manifesto of mayhem against it (Black Hat 2009 – Clobbering the Cloud by SensePost) Assessing your organization’s readiness for Cloud should include the evaluation of hybrid models. standards. In the more immediate future. and expectations for the future.
ComputersOff. If you want to really say what kicked this thing off. The difference is each of these components are building blocks that solve the specific point problems of abstracted. to do more scalable processing and computing – Ping Li (Partner. we’ve seen Cloud go from a bit of a joke to a number two priority on the plate of CIOs today.org and Ex-MD. and web standards “ Cloud is an evolution. grid. on-demand. What’s even more of a surprise is that in a short period of 12 months. I look at it as the evolution of the data center. and a very serious consideration that they are taking on board – Paul Harapin (Director.Foundations of Cloud Computing Foundations of Cloud Computing Obstacles and Considerations Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Future of Cloud Cloud is an evolution. distributed processing – Tony Bishop (Founder and CEO. Vmware) . We did a focus group around 12 months ago and they pretty much took the mickey out of Cloud. utility. CIO Website December 2010 | Copyright © 2010 Grail Research. merging virtualization. virtualization was a big precursor to Cloud…I think “Cloud" is a little bit overused right now. virtualization and web standards into a delivery paradigm. It coalesces grid. Ars Technica Website. utility. It was seen as unrealistic and CIOs weren’t considering it. Accel Partners) Source: SysCon Website. LLC 4 “ Cloud services have shifted from a year ago. Adaptivity) I don't think it's a revolution as much as it's an evolution.
but for companies to harness the power of Cloud. It simply distributes the stacks between the service providers and the users. programmable interface. SysCon Website.. always available and scaled to demand. and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. servers. It is an IT architecture with vertical services – Steve Jin (Creator of Vmware vSphere Java API) Applications/functionality delivered via Cloud: Accessible via standard Internet protocols. Sheynkman (Co-Founder. Elastra Corporation) . on-demand network access to a shared pool of configurable computing resources (e.. complete application infrastructure needs to be easily configured.Defining Cloud Computing Definition Foundations of Cloud Computing Obstacles and Considerations Future of Cloud “Cloud computing is a model for enabling convenient. full self-service features – Chenxi Wang (Ph. Forrester) Source: Sysomos Software Tool. dynamically-scaled and managed in these virtualized-hardware environments – K. LLC 5 “ The ‘Cloud’ model initially has focused on making the hardware layer consumable as on-demand computer and storage capacity. Forrester Research Website. deployed. pay as you use.D. networks.” – Peter Mell and Tim Grance (NIST) Essential Characteristics On-demand Self-Service Broad Network Access Resource Pooling Rapid Elasticity Service Delivery Models Cloud Software as a Service Cloud Development as a Service Cloud Platform as a Service Cloud Infrastructure as a Service Deployment Models Private Cloud Public Cloud Hybrid Cloud Community Cloud How Do Experts Define Cloud Computing? “ Cloud computing is an evolutionary technology because it doesn’t change the computing stack at all. NIST Website December 2010 | Copyright © 2010 Grail Research. This is an important first step. Principal Analyst.g. applications. storage.
if repeated on different websites. 2Discussions during the period 25-Aug-2009 to 25-Aug-2010. and is less capital intensive than the Private Cloud model . and they can determine the adoption speed they want to go at – Tim Crawford (CIO. 4Small and Medium Businesses Source: Sysomos Software Tool. security requirements. SysCon Website. and compliance considerations) The Community Cloud model is expected to address the requirements of governments and their agencies Note: 1Virtual Private Network. 3N may include some articles/posts more than once. others argue that the model offers better resource management to current IT managers Private Cloud Intranet/VPN1 Hybrid Cloud Intranet/VPN1 + Internet Public Cloud Made available to the general public for specific general purposes The Public Cloud model emerged as a great value proposition for SMB4 companies and startups USERS Global Share of Online Clouds 1% 12% 52% 2 Discussions4 on Types of Hybrid Cloud Integration of two or more types of Clouds (Private. CIO Website. Amazon) Some experts believe that companies are testing the waters by taking limited services on Cloud before adopting a particular cloud computing model The Hybrid Cloud model provides more flexibility than the Public Cloud model. Though most experts believe that ‘private cloud’ is an oxymoron. IBM X-Force: Mid-Year Trend and Risk Report December 2010 | Copyright © 2010 Grail Research. policy.7813 Community Cloud Dedicated to a user/industry group that has shared concerns (mission. All Covered) “ “ Concerns for those deploying in the public cloud are factors such as the financial stability of the hosting organization and the hosting organization’s deployment policies – IBM X-Force “ “ CIOs know that what is sometimes dubbed "private cloud" does not meet their goal as it does not give them the benefits of cloud: true elasticity and capex elimination – Werner Vogels (VP and CTO. Community. or Public) Public Cloud 35% Hybrid Cloud Community Cloud N= 49. and It also means choice for the customers.Emerging Primary Models for Cloud Deployment Major Types of Clouds Public/ Community Cloud Internet Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Definition and Expert Views Private Cloud Dedicated to one customer/company Key Takeaways Private Cloud is more suited for organizations that need high-level security. LLC 6 “ Private Cloud “ The hybrid cloud is an attractive way to take advantage of cloud computing.
the SaaS delivery model of cloud computing will lead the growth story. They believe that emerging countries such as India have the greatest potential for market growth. nearly 85% of net-new software firms coming to market will be built around SaaS service composition and delivery.1 Bn 2015 Expert Views Key Takeaways Experts believe that SaaS will be adopted by most companies in the next few years at some level or the other.2% from 2010 to 2015. accounting for 73% of the market's revenues in 2010 – MarketsAndMarkets Report India will not only see a surge in cloud computing services but companies all over the world will look to India to support their transition to cloud computing – Steve Ballmer (CEO. document management.Cloud Computing Market Size and Growth Prospects Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Insights The cloud computing market is expected to grow at a double-digit rate in the next 5 years. According to experts. SaaS-derived revenue will account for nearly 26% of net new growth in the software market in 2014…– IDC Report The explosive growth in the cloud computing market will mirror greater IT globalization trends. “Worldwide Software as a Service 2010–2014 Forecast: Software Will Never Be the Same”. including opportunities to support outsourcing of Cloud services Cloud Market Growth USD 37. LLC “ By 2012. with India leading the market in outsourced support for Cloud services It is estimated that SaaS is growing at a rate five times faster than the software market as a whole 7 “ “ We are seeing an acceleration of adoption of cloud computing and cloud services among enterprises and an explosion of supply-side activity as technology providers maneuver to exploit the growing commercial opportunity – Ben Pring (VP. MarketsAndMarkets report: “Global Cloud Computing Market 2010 – 2015” . collaboration. and customer management applications “ The global cloud computing market is expected to grow from $37. Microsoft) Note: Comment and Views include key snippets Source: IDC reports: “Worldwide Enterprise Server Cloud Computing 2010-2014 Forecast”. especially in content management.1 billion in 2015 at a CAGR of 26. about 65% of new products from established ISVs will be delivered as SaaS services.8 Bn 2010 (26% CAGR) USD 121. Gartner) .8 billion in 2010 to $121. SaaS is the largest contributor in the Cloud computing services market. EconomicTimes Website December 2010 | Copyright © 2010 Grail Research. by 2014.
Forrester Report.Traditional IT Delivery Translated to Cloud Business Value Traditional Delivery Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Cloud-based Delivery Consumption Applications Software as a Service (SaaS) Creation Development Tools Development as a Service (DaaS) Orchestration Middleware Platform as a Service (PaaS) Infrastructure Infrastructure and Hardware Infrastructure as a Service (IaaS) Source: R Wang and Insider Associates. Grail Research Analysis December 2010 | Copyright © 2010 Grail Research. Phil Wainewright. LLC 8 . and James Governor). A Software Insider’s Point of View–Understanding The Many Flavors of Cloud Computing and SaaS ( R "Ray" Wang. Michael Cote.
LLC 9 . Salesforce. What will you do 5 years into a True SaaS scenario when you are locked in and the vendor won’t add the feature or functionality you need?” – R 'Ray' Wang (Partner.you the end user can program it” – Marc Andreesen (General Partner. storage.Four Service Delivery Models Business Value Definition Expert Views Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Service Provider Application licensed to customers “SaaS is perfect for small businesses. and countless more that will be needed in the coming years” – Scott Sanchez (Security and Privacy Officer. they get the benefits of world-class infrastructure. The biggest problem with PaaS may be difficulty migrating existing applications from the internal data centre to the cloud” – Tim O'Brien (Director.com) “I think there are going to be thousands of new platform companies -.Complete abstraction. such as a web browser Set of tools and APIs provided for creating customized applications DaaS Tools provided include code editors. Subramanian (CTO and Advisor. Frankly. Company Websites December 2010 | Copyright © 2010 Grail Research. and deployed applications IaaS Note: Comments and Views include key snippets Source: NIST Working Definition of Cloud Computing. IaaS has an obviously huge market in the enterprise because there are countless servers sitting in data centers that are prime candidates to move out to IaaS clouds. TechWorld Website. The Role of Internal Audit. and no capital investment. PaaS makes developers succeed even if they are completely ‘operations blind” – K. Andreessen Horowitz and Cofounder & Chairman at Ning Inc. network.) “The advantages of PaaS are . Platform Strategy Group.Net Fundamental computing resources (processing. SoftwareInsider Website(R "Ray" Wang). HyperStratus) “The cost of comformity is the lack of flexibility. enterprise-class features. Subramanian (CTO and Advisor. and batch scripts Hosting for clientdeveloped applications PaaS Applications can be created using programming languages such as Java and . IaaS and other associated services has enabled startups and other businesses to focus on their core competencies without worrying much about provisioning and management of infrastructure” – K. giving developers the power to create applications for the cloud” – Marc Benioff (CEO. October 2009 (Ernst & Young). ScaleUp Cloud) “In short. Microsoft) “Although it is not the first choice. source control systems. I'd be surprised if the SMB market doesn't shift to a SaaS-dominated sector” – Bernard Golden (CEO. CloudsDirect) SaaS Access through “thin client interface”. Better security. development as a service provides a new model for development tools. CloudsDirect) “There are shortcomings in the platform as a service model as well. Altimeter Group) “Just as platform as a service provides enterprise IT with a new model for platforms to run applications in the cloud. considerable cost savings and faster time to market . etc. storage. SysCon Website.) — to run full virtual servers Customer has control over operating system.
Cloud Computing Continues to Evolve Expert Views Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Key Takeaways Requires Awareness and Clarity “ A “There is still a strong need for awareness on the part of folks in the cybersecurity area about cloud computing. Platform Strategy Group. Cloud Computing. Interarbor Solutions) “People are going to want to move data around. VP and Chief Internet Evangelist. HyperStratus) Awareness and understanding of cloud computing is limited to a small set of IT professionals B Requires Customized Solutions Requires Cloud Computing Standards There is a gap between customer requirements and existing cloud computing solutions in the market Note: Comment and Views include key snippets Source: Sysomos Software Tool. That is the real key-take away that awareness around the cloud as it relates to trust and security needs to continue to be increased” – Melvin Greer (Chief Strategist. CIO Website. CloudNod Website December 2010 | Copyright © 2010 Grail Research. their agencies are unaware about cloud computing. LLC 10 “ C Cloud computing is still evolving in terms of welldefined adoption/integration standards . but the cloud model is gaining popularity both among users who want to sidestep their companies' IT departments. even though such services may follow better standards than their existing infrastructure” – Bernard Golden (CEO. ScaleUp Cloud) “Public cloud services are generally not providing as much customization as customers want. SysCon Website. nor are traditional internal IT technologies and skills apt to seamlessly spin up mission-ready cloud services. CISSP (Security and Privacy Officer. Ulitzer Website. and 34% of the respondents in total weren't familiar with the cloud. There's a whole raft of research work still to be done and protocols to be designed and standards to be adopted that will allow people to manage assets” – Vint Cerf (Co-designer of the TCP/IP. they're going to want to ask clouds to do things for them . About 21% of those folks involved in cybersecurity. Google) “When customers are looking to adopt cloud services. Microsoft) "Cloud solutions won't come in a box. We don't have any inter-cloud standards. Sanchez. and from small businesses that want to get out of the IT business” – Tim O'Brien (Director. Lockheed Martin) “…the biggest security threat for cloud computing is lack of awareness about cloud security among the IT Pro's” – Scott C. they want services that follow highest standards. Neither are cloud providers so far able to provide custom or ‘shrinkwrapped' offerings that conform to a specific enterprise's situation and needs” – Dana Gardner (President and Principal Analyst.
forums. as well as consolidating a confusing array of servers. SysCon Website. This might not be acceptable to non-US-based organizations Massachusetts Breach Law protects citizens’ private information.Interest in Cloud Computing Across Geographies Share of Discussions1 on Cloud Computing 46% Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Key Takeaways Certain geographies are better suited to offer Cloud services (e. lawpracticestrategy. Microsoft) “Our European customers want to make sure that their data stays in Europe. Official Website of the Commonwealth of Massachusetts. and transmission of personal information which will impact how Cloud service providers handle data The EU Data Protection Directive does not allow the personal information from EU or EEA2 to be transferred to any outside country. small data centers. Pacific-Tier Communications) “Each country may pass their own laws that govern the provision and use of online environments” – John Howie (Senior Director. it was clear the government is struggling with the problem of both building a national ICT plan (Information and Communications Technology). YouSendIt) Note: 1Online discussions in English on blogs. specifying strict compliance guidelines around storage. and Twitter from software tool findings across regions during the period 25-Aug-2009 to 25-Aug-2010. which doesn’t adhere to the EU specified compliance mechanisms for legal data protection The “Safe Harbor” certification (developed by the US Department of Commerce and European Commission) enables US vendors to comply with the EU directive through self-certification. Can Amazon guarantee that? That’s never been answered” – Ranjith Kumaran (Founder and CTO. InformationLaw Group Website.com December 2010 | Copyright © 2010 Grail Research. those with favorable climate conditions to sustain the cooling needs of data centers) 17% 11% 9% 7% 6% 4% Rest of World Cloud technologies are dependent on uninterrupted connection to the Internet.g. access. which is not possible in all parts of the world where electricity and Internet connectivity can be sporadic The Patriot Act in the US allows the government to subpoena all data stored within the country. LLC 11 “ . and dearth of policies managing the storage and protection of data” – John Savageau (President. 2European Economic Area Source: Sysomos Software Tool. thereby eliminating the restriction on data transfer Expert Views “ “Developing countries may be in a great position to take advantage of virtualization and cloud computing.. CloudStorageStrategy Website. news websites. During a recent visit to Indonesia.
we now have software developers that are writing on a very flexible platform that vendor maintains” – Oliver Friedrichs (CEO. maintain the servers. Last year. Right90) Source: BusinessComputingWorld Website. Intel) “It’s a big win for smaller companies to leverage the cloud because you are really saving a lot–it is really avoiding a large. we would have had to build out a data center and the sheer cost of that would have made it much more difficult to launch our business. California and adopted Amazon EC2 with backup to servers located at the firm’s own offices. Looking forward.Obstacles and Considerations Foundations of Cloud Computing Obstacles and Considerations Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Future of Cloud The concept of computing resources as a utility is gaining traction among SMBs. up-front investment. LLC 12 “ . security will join those as a third pillar of what people demand from all computing experiences” – Paul Otellini (CEO. So rather than hiring someone. Five years ago. In a traditional data center. CIO Website December 2010 | Copyright © 2010 Grail Research. Ontario and San Francisco. we would need an IT person to rack the system. the company moved out of its data centers in Calgary. The lack of servers to manage has freed up Right90’s IT management team” – Arthur Wong (CEO. and own the hardware. energy-efficient performance and connectivity have defined computing requirements. the economic model offered by Cloud service providers has yet to prove its strength of scalability to enterprise customers “ “In the past. however. but the cost savings and flexibility of Cloud services beckoned. Immunet) “Right90 didn’t start its business using third-party infrastructure.
SysCon Website. cloud computing means low cost of opportunity experimentation. In business terms. this can be explained by macroeconomic factors.Drivers of Adoption Expert Views Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Key Takeaways A Economic Downturn “ “In part. and no long-term resource commitments. An IT solution that can deliver functionality less expensively and with more agility (remembering that time is money) is hard to ignore against this backdrop” – Ben Pring (VP. changing servers. LLC 13 “ C “In technical terms. CIO Website. Ulitzer Website. The financial turbulence of the last 18 months has meant every organization has been scrutinizing every expenditure. and the ability to direct capital investment toward core business activities"– Bernard Golden (CEO. CloudNod Website December 2010 | Copyright © 2010 Grail Research. with a pay-as-you-go model instead of taking on the capital expenses of traditional IT infrastructure . HyperStratus) Cloud’s on-demand model allows companies to scale up (or down) as they rapidly restructure to meet market requirements. Gartner Research) The economic downturn has forced businesses to become leaner. in turn. Microsoft) The success of virtualization and Internet bandwidth availability has positioned Cloud services as a potential market opportunity Demand Expectation Note: Comment and Views include key snippets Source: Sysomos Software Tool. cloud computing offers elasticity. high agility to respond to changing business conditions. Cloud-based ‘scale issues’ will continue to change how servers and software for them are built for years to come” – Steve Ballmer (CEO. which in turn has fuelled the adoption of cost-effective Cloud service models B Technology Advancements “Server technology is in the middle of a renaissance where it is driving Cloud advancements and Cloud is. pay-as-you-go rather than capital-intensive investment.
and don't want IT to be seen as "the say-no people”. who sees it and how it is stored. the applications and data being processed in clouds are predominantly non-sensitive. On some level. ComputerWorld Website December 2010 | Copyright © 2010 Grail Research. Santander Consumer) “In certain cases. It is difficult to take full responsibility for who can access data. we CIOs are challenged in IT to figure out how to integrate [them] with the rest of our world" – Don Goin (CIO. CIO Website. we have technology standards. Comment and Views include key snippets Source: Sysomos Software Tool. LLC 14 “ . White paper1 "I am 100 percent responsible and accountable for all technology and every shred of data that moves in and out of my company. SysCon Website. since the premise of the Cloud is that customers don't necessarily need to know or care where their data is” – Jim Haskin (SVP. compliance will be impossible. with few standards and only limited possibilities for interoperability” – RSA (Security Division of EMC). but end users may not foresee the difficulties of meshing new products with existing technology. Websense inc) "There is an issue that's looming that hasn't really been discussed or addressed yet. companies are going to be both consumers and providers of cloud services” – Joe McKendrick (Independent Analyst and ZDNet Blogger) Note: 1The Role of Security in Trustworthy Cloud Computing. That is the role of governance for companies that are consuming the services versus the role of governance for companies that are providing the services. If business users adopt these things. The cloud offerings themselves are proprietary computing islands. Cloud Computing for Lockheed Martin) “At this initial stage. On-premise. Other major concerns include complexity in the integration of cloud-based systems and adherence to regulatory/compliance frameworks 1 Security and Data Privacy 2 Integration with Cloud-Based Systems Expert Views 3 Regulatory and Compliance Issues “ "Security has been identified as the most significant issue associated with cloud computing adoption" – Melvin Greer (Chief Strategist.Barriers to Major Adoption Insights Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Industry experts believe that there is apprehension among potential Cloud customers about security and data privacy. Nothing like that exists in the cloud. and the Cloud services offer minimal or only generally available security.
security. and who can access the data “ “Having core components.Addressing Security Concerns Insights Information Security Secure sensitive or confidential information Foundations of Cloud Computing Obstacles and Considerations Future of Cloud IT managers don’t believe that current cloud computing solutions are at par with on-premise infrastructure solutions. and data leaks increases dramatically” – David Linthicum (CTO. Microsoft) Hackers and security experts believe that Cloud vendors are not doing enough to address identified vulnerabilities Though vendors/service providers create a buzz around their services. such as storage. service providers need to offer: Authentication Properly identify and authenticate users before granting access to services Data Location Identify the exact physical location of information assets Independent Audits Conduct independent compliance checks on services provided Infrastructure Access Limit access to physical infrastructure where applications are deployed Data Reliability Prevent data loss and maintain integrity Customer Apprehensions and Expert Views Key Takeaways There is lack of visibility on legal and compliance standards. SysCon Website. Fortify Software) “When vulnerabilities are detected they can be managed more rapidly and uniformly. and potential customers have limited clarity on where and how the data is stored. To address this concern. compute. hackers have identified vulnerabilities in current cloud technology” – Barmak Meftah (Chief Product Officer. Google Federal. CSA (Cloud Security Alliance). compliance issues. they may not be able to match their claims as infiltration techniques outpace readiness of Cloud technologies Note: Comment and Views include key snippets Source: Ponemon Institute Report. CIO Website December 2010 | Copyright © 2010 Grail Research. and the risk of outages. Google Inc.belief from the hackers. that cloud vendors are not doing enough to address the security issues of their services. and so on. Fortify Software Website. Bick Group) (2010 Survey on participants in DEF CON) “…. LLC 15 “ .) “Attempts to infiltrate or disrupt online service offerings grow more sophisticated as more commerce and business occurs in this venue” – John Howie (Senior Director. outsourced to other cloud providers could mean that your data and application processing exists across many different physical providers. Cloud security is able to respond to attacks more rapidly by reducing the time it takes to install patches on thousands of individual desktops or hundreds of uniquely configured on-premise servers” – Mike Bradshaw (Director.
It was running an unauthorized command and control center: Zeus botnet enables hackers to steal login credentials. Gartner Fellow) Jan 2010: A hacker uses the Google Street View data to stalk victims. This way if I can obtain the user's router's MAC address in any way. I simply re-implemented the feature as a server-side tool. LLC 17 “ . or age. Threat Research. and credit card information through the creation of fake HTML forms on banking login pages More than USD100 MM was lost in bank fraud due to Zeus botnet attacks in 2009 The hacker may have stolen the password from the desktop of a user "I think it's more a target of opportunity than a target of choice” – Don DeBolt (Director. regardless of browser. The hacker sent documentation to Tech Crunch. the elite media organization that covers tech trends. Sean-Barton Website. HCL technologies) July 2009: Twitter corporate and employee information was infiltrated at the top levels of the organization. Dark Reading.Recent Threats Validate Security Concerns Foundations of Cloud Computing Obstacles and Considerations Future of Cloud “ The security of these Cloud-based infrastructure services is like Windows in 1999. including the CEO Evan Williams’ personal email. in his interview with French media on hacking the Twitter account) Source: CIO Website. But it’s just in early stages of getting exposed to the Internet. The attacker is able to track his victim in few seconds without even using IP address information "The interesting bit is I'm not piggybacking off of the browser's geo-location feature. nationality. It’s being widely used and nothing tremendously bad has happened yet. Snipe Website. Computer World blog. The individual behind the attacks accessed nearly 310 documents containing confidential information belonging to Twitter. and you know bad things are coming – John Pescatore (VP. Fonality Inc. I can typically determine their location and show up at their place with pizza and beer later that night“ – Samy Kamkar (Co-Founder. to show them that no system is invulnerable” – Francois Cousteix (Hacker Croll. to prove the attack "It's a message I wanted to get out to Internet users. account numbers. TechCrunch December 2010 | Copyright © 2010 Grail Research.) Dec 2009: Zeus botnet was spotted on Amazon’s Elastic Computing Cloud (EC2) Cloud computing network.
CNET) “What holds back large companies is. their success with the previous generation of computing. Because they could invest in the old model.Pros and Cons to Cloud Adoption by Company Size SMB Large Enterprises Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Expert Views PROS Innovation flexibility at low operating expense and no capital expenditure On-demand scalability to synchronize with market dynamics Ability to access information regardless of location Allows large enterprises to focus on core business activities instead of IT infrastructure Lower cost of power. MyBroadband Website December 2010 | Copyright © 2010 Grail Research. you should consider not choosing at all” – James Urquhart (Blog Network Author. HyperStratus) CONS Security. space. The service model meets the financial needs of SMEs while protecting them from the risks of nongenuine software” – Charl Everton (Anti-Piracy Manager. or you have requirements that push beyond the limits of today's cloud computing technology or business models. HyperStratus) Note: Comment and Views include key snippets Source: Sysomos Software Tool. Microsoft SA) They (Mid-sized companies) face rapidly changing markets and need to avoid being locked into a capital investment or any particular mode of operations. The call option that cloud computing represents — the ability to change in the future without a penalty — is critical to a midsized company trying to succeed in a world of giant competitors and disruptive change” – Bernard Golden (CEO. needs can be greater than current Cloud capabilities Increase in security threats due to adoption of Public Cloud Legal compliance and regulatory issues if operations in multiple countries Highly skilled IT staff and sunk investments in existing hardware infrastructure may also act as a deterrent to move to Cloud "I would argue. they've now got an installed base of hardware and a large. and data center maintenance by taking non-critical services out of data centers Risk of hardware and software obsolescence transferred to Cloud service provider “ “Companies such as AllenPort and ARC offer SMEs good software at affordable prices with the flexibility to adjust usage on an as-needed basis. that if you have existing IT investment. SysCon Website. however. PCWorld Website. so they tend to more toward a vision of private cloud computing” – Bernard Golden (CEO. LLC 18 “ . and compliance concerns Network latency hinders application performance Cost of hardware rapidly decreasing — can be a future concern Complex integration of legacy systems with Cloud systems an obstacle. privacy. CIO Website. There's pressure on these businesses to justify the sunk cost of their hardware infrastructure. top-notch technical staff on hand. Ulitzer Website. ReadWriteWeb Website. in a sense.
Other factors that should be considered include cost of Internet bandwidth. it may make sense to leave the cloud and buy your own bandwidth to the Internet –you’ll probably save 50 percent of your monthly bandwidth charges” – Allan Leinwand (CTO-Infrastructure Engineering. business process governance. are transferred. however. LLC 19 . Comment and Views include key snippets Source: CIO Website. which will lead to additional cost and complexity Cloud Switch: Cloud computing service providers. GigaOM Website. third-party support. and barriers to switching Cloud service providers or changing back to a on-premise infrastructure Expert Views Economic Model “Risks. for example). eager to capture the market. There should be a thorough internal due diligence on business requirements There is no widely accepted framework to assess the value proposition of various Cloud services vs. and management remain. Internet bandwidth usage and charges increase as resource utilization rises Third Party Support: Regulatory and compliance guidelines may require a third-party auditor or application. SmartDataCollective Website December 2010 | Copyright © 2010 Grail Research. on-premise infrastructure setup varies under different business scenarios. on-premise infrastructure setup The IT community is divided — whether Cloud services are a business decision or a technology decision Hidden Cost “…our analysis indicates that once you’re sending over 50 gigabytes of data daily (or a terabyte a month costing you $150 on Azure.000 on an in-house implementation of Exchange Server” – Tim Crawford (CIO. although many considerations.Economic Model and Hidden Cost Insights Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Cloud has been positioned as an alternative to on-premise infrastructure. NSF1) "I believe that the future of data centers is in the cloud because companies will be drawn toward paying $10 per month on hosted Exchange services instead of spending $10. CloudEco Blog. SysCon Website. experts believe that it is not always the most appropriate IT solution. All Covered) Key Takeaways Economic evaluation of Cloud adoption vs. “Do Clouds Compute? A Framework for Estimating the Value of Cloud Computing” by Markus Klems. lock-in. including security. hardware and software technological obsolescence. use proprietary mechanisms to deploy applications and store data. interoperability. This can lock the customer to a provider or increase complexity/cost when switching providers/infrastructures Note: 1National Science Foundation Initiative on Computational Thinking. Jens Nimis and Stefan Tai. Linkedin. such as. and need to be properly evaluated” – Ray DePana (Industry Consultant. Zynga) Bandwidth Cost: Cloud services are delivered over the Internet.
Experts believe that Cloud companies may choose output over environmental considerations in the future • Hewlett-Packard developed a wind-cooled data center in England • Google’s data center in Saint-Ghislain. a shared resource like Amazon or Google's public clouds can have higher utilization and thus greater power efficiency. just by different companies. however. 451 Group) Key Takeaways Experts maintain that Cloud is greener than individual data centers.) “So. Ultimately. like a hydro plant. and you can minimize transmission line power losses and be even greener”– Marc Hamilton (VP of Cloud Computing Sales. Enomaly Inc. or integrated with renewable sources of energy Skepticism and Uncertainty According to a survey by Rackspace Hosting1. as well as meet back-up and cooling demands. So it's no greener. in a sense. LLC 20 “ . only 20% believe that hosted solutions play a role in making their firm greener. the "greenness" of Cloud computing is a kind of Schroedinger's box problem today.How Green is Cloud? Insights Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Experts see the potential of cloud computing for “Green IT” through efficient power consumption. however. functions without chillers Expert Views “In theory. ComputerWeekly Website. Locate your cloud data center close to a green power source. An additional 34% of those customers are currently trying to evaluate the efficiencies and ‘greenness’ of Cloud. Rackspace Hosting Survey Report. but the problem is there currently is no way to justify this statement without some kind of data to support it” – Reuven Cohen (CTO. data centers end up using more electricity to run computers. roughly the same power is drawn from the grid. Cisco Systems) "Cloud doesn't save power but displaces it. CIO Website December 2010 | Copyright © 2010 Grail Research. there is a long road ahead in substantiating “ Cloud allows companies to scale down IT resources when demand is low. in which we won't know the actual savings to the environment until someone actually observes--or measures--it” – James Urquhart (Product Marketing Manager of Cloud Computing. As more and more enterprises opt for Cloud. Greenpeace Report. Comment and Views include key snippets Source: SysCon Website. Cloud is more about dealing with companyspecific issues than planetary ones” – Andy Lawrence (Research Director. skeptics claim that there is no comprehensive framework to assess the value proposition of “Green Cloud” Green Lining to Cloud Cloud computing providers strive to maximize the performance of their operations and can achieve higher utilization rates than in-house data centers Cloud data centers can be developed at strategic locations. reducing their carbon footprint significantly Green cloud as a concept depends on the ability of Cloud providers to meet their increasing demands through renewable sources of energy Note: 1 Based on 167 customer responses from email Survey conducted by Rackspace Hosting globally in 2009. Belgium. GreenBiz Website. Sun) “I’m sure that if you were to compare a traditional data center deployment to a near exact replication in the Cloud you'd find the Cloud to be more efficient.
ReadWriteWeb Website December 2010 | Copyright © 2010 Grail Research. that are going to be fairly pervasive and have a lot to say about IT five years from now” – Jim Reavis (Executive Director of Cloud Security Alliance (CSA). start-ups and small businesses have proposed innovative solutions to mitigate the risks associated with cloud computing. Reavis Consulting Group) “Password resetting and other security mechanisms in the Cloud are always going to be a weak link. LLC 21 “ .Future of Cloud Foundations of Cloud Computing Obstacles and Considerations Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Future of Cloud Over the last few years. it’s going to look very different. Expecting regular joes to whip out a twofactor authentication device for use with a Cloud-driven service just isn’t realistic. NetworkWorld Website. It was barely a decade ago that many people characterized the Internet as mostly hype” – Bernard Golden (CEO. and President. Those who characterize Cloud computing as mostly hype have short memories. because there are companies we don’t even know about at this point. HyperStratus) “So. and Microsoft are investing tens of billions of dollars in building out their Cloud infrastructures. as long as userfriendliness comes ahead of security in Cloud computing beauty stakes. Proof is in the fact that major vendors like IBM. Google. in terms of the first movers and the environment now. It’s not going to happen” – Andy Cordial (MD. Anybody who carved out some space right now and some lead in the market in Cloud shouldn’t feel too comfortable about their position. It will profoundly change the way organizations do their computing. and are competing with leading players in the Cloud space “ “I believe that Cloud computing is a powerful trend – the next platform shift in computing. Origin Storage) Source: CIO Website.
LLC 22 . supporting regulatory compliance and confidently securing business transactions” – Dave Hansen (GM. Management Products and Solutions and Security. Its fraud prevention. solid recurring revenue base as well as sources of new growth opportunities for CA Technologies”– Ram Varadarajan (President & CEO. and extremely scalable” – Arcot Website "Controlling identities and their access to information is a critical area of security. we bring a strong.Consolidation in the Ecosystem Increasing Cloud Focus Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Insights Established Cloud service providers have switched gears towards consolidating their present offerings due to increasing focus on Cloud in the market place “Customers are increasingly looking for ways to take advantage of the flexibility and new services in the public cloud and want to extend the security and control of their private clouds to this new environment…TriCipher brings to VMware important authentication and identity technologies that will accelerate our delivery of new solutions for hybrid cloud integration and end user computing” – Brian Byun (VP & GM of Cloud Services and Applications. low-cost. powerful identity solutions that address today's pressing business problems” – TriCipher Website “CA Technologies is an IT management software and solutions company with expertise across all IT environments—from mainframe and physical to virtual and cloud” – CA Website + “Arcot is the Cloud authentication leader. CA Technologies) “Identity is a critical area for security whether you’re talking about in-house or the cloud. Arcot Systems) Note: Comment and Views include key snippets Source: Company Websites December 2010 | Copyright © 2010 Grail Research. TriCipher) “VMware delivers virtualization and cloud infrastructure solutions that enable IT organizations to energize businesses of all sizes” – VMware Website + “TriCipher offers secure cloud access management with easyto-deploy. strong authentication and eDocument security solutions are easily deployed. providing secure authentication and seamless single sign on access to over 3. The combination of Arcot's software-only approach to advanced authentication and fraud prevention and our CA SiteMinder portfolio gives our customers robust and flexible options for reducing risk.000 public and private Web and SaaS applications…We are excited to join the VMware family and further build on our foundational technology to fulfill VMware’s cloud and end user computing vision” – John De Santis (Chairman & CEO. and with 120 million identities verified by our solutions today. VMware) “TriCipher has been a pioneer in the field of identity and access management as a service.
President & CEO. HP) Jul 2010: "With BigFix software integrated with IBM software offerings. and Sun offer security within the operating system — Google and Amazon have security features in their apps. So the acquisition of McAfee could do three things for Intel:…It provides the capability for Intel to develop security within a cloud computing infrastructure” – Pat Clawson (Chairman & CEO. Company Websites December 2010 | Copyright © 2010 Grail Research.Recent Acquisitions Is Cloud driving acquisitions? Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Insights Companies Microsoft. IBM. we have to think about using security at a lower level of the stack…I'm looking forward to one year from now when I 'm standing before you all and we're talking about a whole other era” – Dave DeWalt (CEO. eSecurityPlanet Website. EMC) Note: Comment and Views include key snippets Source: Gigaom Website. LLC 23 . The battlefront in security has quickly shifted from securing the network perimeter to protecting and securing the information itself—wherever that information lives and wherever it moves” – Joe Tucci (Chairman. Lumension) Aug 2010: "With Fortify’s leadership in static application security analysis combined with HP’s expertise in dynamic application security analysis. McAfee) “The other major shift impacting Intel’s core market is the trend toward Cloud Computing. but Intel’s acquisition of McAfee seems to have redefined the security landscape with a potential to embed security within the chip. …. organizations will have a best-inclass solution to improve the security of their applications and services” – Bill Veghte (Executive VP of Software and Solutions. IBM clients will be able to more easily manage and secure their PCs and laptops. Some experts believe that this will lead to more secure Cloud offerings in the future Acquisition Expert Views Aug 2010: “Instead of running above OS. a complex task as the costs and risks associated with security threats continue to grow” – Steve Robinson (GM of Security Solutions. IBM) Sep 2006: “Information security continues to dominate the spending intentions of CIO’s around the world.
CA) When operational. For example. Lorch. integrity. Wang. in cloud computing you want to store your encrypted data files out on the cloud. Helen J. write-serializability (ensuring data is updated in the right order). LLC 24 . and read freshness (reads most recently updated data file). and Mitsubishi Electric Corporation have developed a new encryption system that provides complex and “fine-grained data transmission/access control” This scheme uses a mathematical approach called “dual pairing vector spaces” to allow confidential information access The encryption scheme is proposed to be used in cloud computing and other advanced network services to attain secure environments CloudProof will detect and prove security violations across four storage characteristics The Advanced Encryption Scheme applies advanced logic in encrypting and decrypting to provide a secure Cloud environment IBM – Homomorphic Encryption Scheme IBM is working on an encryption system that will allow the searching of data in an encrypted format "The point is to allow others to manipulate your encrypted data without revealing it to them. as Cloud Computing takes shape and enterprises are starting to put data in the Cloud. and Amazon Elastic Compute Cloud SecureCloud uses key management technology and standard encryption services to provide data security and privacy to Cloud users. InformationManagement Website. Mitsubishi Electric Website. and process encrypted data SecureCloud gives enterprises ultimate control over the data Source: Microsoft Website. IBM) Trend Micro – SecureCloud Trend Micro has launched an encryption solution called SecureCloud This solution is provided through a single web portal and supports Vmware. can detect and prove security violations to these properties The advantage is that hackers cannot gain information from encrypted data. so that you can access it from anywhere. however. Unlike other Cloud security services. thus increasing Cloud adoptability IT identifies four key Cloud storage characteristics: confidentiality. The system will address the issue of security by adding SLA-level guarantees. successive encrypted answers degrade. WorldCadAccess Website. But you would also like to be able to search your data with some combination of keywords. The proposed Cloud storage system. as more operations are performed. Microsoft Research Paper Abstract (Raluca A. Jacob R. becoming ‘dirty’” – Craig Gentry (Researcher. and Li Zhuang (Microsoft Research)) December 2010 | Copyright © 2010 Grail Research.Initiatives to Address Security Concerns Microsoft – CloudProof CloudProof has been proposed as a system to secure Cloud storage in a Microsoft Research Paper. Now. security must evolve to protect and control the data” –Steve Quane (Chief Product Officer. CloudProof. Popa (MIT). David Molnar. Eucalyptus. the encryption keys remain exclusively with the user “Security has been one of the greatest inhibitors to Cloud Computing adoption. Trend Micro – Cupertino. they can still infer information from Cloud access patterns Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Nippon Telegraph & Telephone Corporation and Mitsubishi – Advanced Encryption Scheme Nippon Telegraph and Telephone Corporation. the Homomorphic Encryption Scheme will be able to search. SmartTechnology Website. then just decrypt the query results…” “The usefulness of the scheme is still limited by the fact that. SysCon Website. sort.
Cindrich John Vigouroux Liran Eshel Off-Premise Synchronization On-Premise Source: BusinessWeek Website. Data is encrypted prior to transmission and decrypted only upon call back CEO Joel Allen Cloud File Server Egnyte’s hybrid technology leverages the benefits of accessibility and flexibility of Cloud storage integrated with the performance of local storage ‘Direct to vault’ online technology offers an innovative way to securely store. Digi-Data Website. and remotely access digital assets using one integrated solution On-premise policy server and cloud-based scanners are integrated to assure off-premise remote access security adherence The focus is to protect data where it resides. bandwidth capacity. CRN Website December 2010 | Copyright © 2010 Grail Research. and it also allows users to work offline with higher performance levels Product Offering Cloud-Client Concept Data and applications are stored and run locally on the PC while instantaneously mirroring the data to Cloud. share. LLC 25 .Buzzing Startups Address Cloud Security Issues Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Insights Companies Some startups have adopted a hybrid methodology in their Cloud products to address concerns about security. This approach allows them to use various encryption methods and other proprietary ways to secure data stored on Cloud. In addition. backup. AllenPort Website. AES encryption is used before data is sent to its online backup destination. TechcrunchIT Website. CTERA Website. M86Security Website. organize. Egnyte Website. and reliability. users get an option to encrypt local disk storage Vineet Jain Cloud Content Management Program Web Service Hybrid (SWS-H) CTERA Portal™ and CloudPlug™ Dennis J.
GestaltIt Website . Principal Analyst. Ulitzer Website. Forrester) “Customers will care more about service level agreements than the brand name of technology components. ‘Ray’ Wang (Partner. as clients will not want to manage an endless stream of cloud service providers for every workload they outsource” – Ray DePana (Industry Consultant. ‘Ray’ Wang (Partner. …Integration will emerge as the key enabler and choke point” – R.Forrester Report. content driven clouds. and growth from cloud computing services. LLC 26 “ . organizations must enhance product offerings with services. especially Infrastructure as a Service (IaaS) C “Single function clouds will evolve to deliver a suite of service offerings to their clients or be acquired by others providing multiple cloud service offerings. and SLAs” – Stephen Fosket (Recipient of Microsoft MVP award) “…Emerging Cloud based business models like gaming as a service. Altimeter Group) B Evolving Business Models Integrated/ Customized Service Offerings IT managers are optimistic about Software as a Service (SaaS) being the key source of future efficiency gains “Service providers will compete not just on price. LinkedIn December 2010 | Copyright © 2010 Grail Research. cloud computing can help monetize open source software…” – Krishnan Subramanian (Chief Technologist/Advisor. Gartner Report.Business Models and Offerings will Evolve Expert Views Foundations of Cloud Computing Obstacles and Considerations Future of Cloud Key Takeaways An ecosystem of Cloud service evaluators. Cloud computing presents an opportunity to monetize open source applications/tools A Improved Compliance and Service-level Agreements “ “Some compliance requirements demand that relevant data be encrypted both at rest and in transit. Altimeter Group) Potential customers will be more concerned about flexibility. but scalability.D. Comment and Views include key snippets Source: SoftwareInsider Website. InfoWorld Website.. and tailor personalized experiences that support self-service options and mobility” – R. SysCon Website. control. CloudsDirect) Mid-size companies are more likely to adopt Cloud services over the next few years. cloud computing is predicted to gain widespread acceptance with corporate data centers as 20% of businesses globally are expected to own no IT assets Note: 1National Science Foundation Initiative on Computational Thinking. and integrators will emerge to address growing customer concerns and potential business opportunities. NSF1) “From a strategic differentiation point of view. efficiency. aggregators. Many of the cloud providers do not support that” – Chenxi Wang (Ph. rather than security By 2012. improve the customer experience with loyalty top of mind.
public.Cloud – The Way Ahead? Foundations of Cloud Computing Obstacles and Considerations Future of Cloud The evolution of Cloud marks a fundamental shift in our relationship with electronic assets and our access to that data and information The Cloud offers great promise. however. thereby combining the best of on-premise functionality with that of hosted solutions for these on-demand services If you are evaluating a Cloud initiative. measuring the cost and benefit for your business within the context of the competitive landscape. LLC 27 . HyperStratus). my clients’ information? What are my competitors doing in this space? Are they pursuing private. Principal Analyst.D. or hybrid initiatives? Note: 1Grail interviews with Bernard Golden (CEO. their customers will implement data protection and security methods on their own which enable them to overlay a private cloud functionality on top of the public cloud offering1 Hybrid architectures that offer encryption of data at the local or client level. or am I losing functionality for a perceived price benefit? How does my solution provider’s roadmap align with my business needs? How are my Cloud solution providers establishing standards and maintaining the security and privacy of my information and by extension. Until providers offer sufficient clarity and assurance on these topics. always assess your company’s readiness. Consider: What are the direct business benefits of Cloud for my company? Why would I ‘rent’ rather than ‘own’? Will a Cloud solution support my business needs.. Forrester) Source: Grail Research Analysis December 2010 | Copyright © 2010 Grail Research. companies seeking to implement cloud-based applications have concerns about the security and privacy of public cloud providers. prior to transmission to the Cloud may offer a path forward for business consumption. Chenxi Wang (Ph.
Santa Barbara. photocopying. recording. She holds a Master’s degree in Industrial/Organizational Psychology and a Bachelor's degree from University of California. and Arthur Andersen on strategic emerging technology decisions. communications and research and has spent the majority of her career advising Fortune 100 companies including Hewlett-Packard. December 2010 | Copyright © 2010 Grail Research.For More Information Contact: Jocelyn DeGance Graham (jdgraham@grailresearch. mechanical. Jocelyn has deep expertise in the areas of marketing. or otherwise — without the permission of Grail Research. Intuit. Jocelyn directed the marketing program for an award winning Cloud startup which was recognized by Gartner as one of the ‘Coolest Emerging Technologies’ of 2010.com) About the Author Jocelyn DeGance Graham . Jocelyn currently leads the Grail Research Cloud Center of Excellence and Cloud research practice. LLC Copyright © 2010 by Grail Research. or transmitted in any form or by any means — electronic. stored in a retrieval system. Prior to joining Grail Research.Named by United Business Media’s CRN as one of the 100 most influential women in IT. LLC 28 . LLC No part of this publication may be reproduced.
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