‘Cloud computing’ is the latest trend following on from software as a service (SaaS). While SaaS was about applications being provided as a service – essentially delivered in a hosted fashion and usually charged for on a subscription basis – cloud computing can be thought of as IT as a service. Not only applications, but the likes of storage capacity and processing power are also provided in a hosted fashion, or ‘in the cloud’.
Chen was speaking to CBR on a recent visit to London. He said the firm, which offers the likes of database, business intelligence and mobile messaging technology, is well-placed to tap into the demand for cloud computing: “You still need a database and messaging in the cloud, so this is all goodness to us.”
Chen said that the firm has already seen a shift towards cloud computing as a reasonable amount of its software is offered in a hosted fashion or with cloud-style pricing models: “About 20% of our business is already charged on a usage-basis because it’s things like messaging, and another 10% of our software licenses are sold on a subscription basis,” he said. “It’s prudent to make sure we have a balance, and while I don’t see perpetual licenses going away we expect good growth in cloud-type deployments.”
Chen said it is impossible that there will be a wholesale switch to cloud computing by enterprises: “There’s always a customer preference thing with IT. A lot of people want to buy it [their own IT infrastructure], own it, treat it as a capital expense and depreciate it over time.”
Chen said the company has various cloud computing capabilities to pursue thanks to the likes of its iAnywhere mobile messaging and management platform, analytics, integration and data warehousing. “All our products are virtualized or virtualisable, so cloud computing is not threatening from that perspective,” he said.
But Chen also said that the company is keeping a close eye on pricing in the new cloud computing model: “One thing we need to watch is pricing in the cloud,” he said. “People tend to spread payments out more in the cloud model, which is fine, as long as you have large enough numbers of customers. I think we’re pretty well set up for this.”
While more and more vendors are making noises about cloud computing, analysts have been sounding a note of caution. The 451 Group’s principal analyst William Fellows outlined some of the potential stumbling blocks in a recent report on cloud computing: “Security, red tape, fate sharing, legacy infrastructure, connectivity, offline access, performance, volume, SLA management, job security and territorialism, to name a few.”
However Fellows said enterprises would be unwise to dismiss the new model out of hand, saying: “Cloud is the name for a real trend (utility computing 2.0), as well as an accompanying bandwagon. It’s the ‘baby and bathwater’ principle: We believe that there are good reasons not to dismiss the trend itself, despite the hype.”
Earlier this week IBM announced it is opening four new cloud computing centres, in Sao Paulo, Brazil; Bangalore, India; Seoul, Korea; and Ho Chi Minh City, Vietnam, where it said there is an increasing demand for Internet-based computing models and skills to help companies compete.
Cloud computing is emerging as a fundamental change in IT approach, said Dr. Willy Chiu, vice president of IBM High Performance On Demand Solutions. It is a key element of the evolution to a New Enterprise Data Centre, and a powerful tool for efficient operations, especially in growth economies.