IBM, Savvis Get Cloud Fever

Tech giant IBM and managed outsourcing specialist Savvis have provided a wide variety of computing and storage services for years under a number of different marketing terms -- managed, outsourced, utility, on-demand, XXX-as-a-service. Both vendors this week jumped on the enterprise cloud bandwagon with a wave of announcements, and they swear there is more to cloud services than just a new buzzword. Both cited an IDC prediction that cloud services will represent a $42 billion market by 2012.

IBM, at its Pulse event in Las Vegas, announced a batch of new software, services, partnerships, and customers as part of an Enterprise Cloud Computing Initiative. It included a demonstration of a global "overflow cloud" with Juniper Networks that links an internal private cloud to a secure public cloud in IBM's nine worldwide Cloud Labs. The idea is that customers can roll workloads from one cloud to another when more horsepower is needed to get jobs done. IBM also expanded the consulting services that help customers identify cloud opportunities and named several customers that were using some of its cloud services for better performance and improved backup and disaster recovery.

Savvis, meanwhile, introduced the first of what it said would be a series of value-added compute and storage services offered from the cloud. Its new virtual data center hosting and private cloud service lets customers buy slices of computing and storage capacity on a pay-as-you-go basis, and provides a portal to add or change requirements in minutes.

Cloud services provide real benefits to customers, says Brian Reagan, director of IBM Business Continuity and Resiliency Services, and the fact that IBM appointed a cloud czar who reports directly to the CEO shows that the company is this new technology trend seriously. "It is more than a marketing campaign," he says. "It is a significant initiative that cuts across every layer and part of the company."

IBM has been offering conventional disaster recovery services for nearly 20 years, but Reagan says that has historically been an "asset-based" service. "You generally had identical equipment in another location that was used to restore service if your main site went down. Cloud services are different. From a technology standpoint, you can have local backup in addition to a backup to the cloud and have near instant restoration," he says. He compares it to trend to tiers of storage. "It is like tiering recovery. For customers that want faster recovery time for their data, pulling it electronically back from the cloud is one way to enable that."Reagan and Savvis CTO Bryan Doerr say there are other aspects that make cloud services different from more conventional services -- faster provisioning, lower prices, the ability to buy and pay for just what you need when you need it without lengthy contracts, and a greater flexibility to use a shared infrastructure as you see fit.

Savvis calls itself a global IT utility services provider and promotes some of its current offerings as IT Infrastructure as a Service. Doerr says traditional outsourcers needed to own just about everything from the application down to the server and storage in order to guarantee good performance, and that doesn't always provide enough cost savings for companies to offset the risk that comes from letting a third party handle their crucial IT systems. But cloud services changes the risk-reward equation, he argues.

"The end user has more direct control over a flexible and shared asset base, and he can easily expand or contract the services he is using," Doerr says. "The benefits are significantly reduced costs and reduced risk, and all of a sudden what wasn't so compelling [outsourcing or managed services] is now compelling as an alternative way to run the business."

Savvis will let customers buy capacity on a virtual machine in six tiers, ranging from a machine that is half-a-core and 2 GB of RAM up to four cores and 15 GB of RAM. Customers must sign a monthly contract, but can re-size their virtual machine as often as they want.

Both Doerr and Reagan said in interviews that other factors are fueling greater interest in cloud services, most notably the bad economy and the drive among most enterprises to cut costs. Cloud services are appealing because they can help companies avoid spending money on hardware and software. And companies like IBM and Savvis bring a long track record of serving enterprises with high levels of security, data management, service levels, and other best practices. "In some cases, we can provide features that are above and beyond what they can afford to provide for themselves in a dedicated, internal IT infrastructure," Doerr says.Both IBM and Savvis see a real opportunity in offering cloud services and they make a good case that there is more to this cloud stuff than marketing buzzwords. Both bring a strong focus on enterprise customers to the game, which is in contrast to many of the consumer-oriented cloud services that are popping up everywhere these days.

Hewlett Packard CTO for cloud computing and VP of cloud strategy Russ Daniels said in a recent interview with InformationWeek that "the cloud is the next evolution of the Internet" and "every enterprise customer who comes to HP expects to have a conversation about the cloud."

Daniels said cloud computing is a new phenomenon made up of several familiar ones: the economy of scale of a large, professionally managed data center; Internet technologies that follow standards and allow for predictable connections; and virtualization, which allows for full server utilization. When combined, however, they represent a new form of computing, Daniels said. "The cloud ultimately is a transformative force. It allows you to do things that you couldn't do with traditional technology."

He predicted that many enterprises will embrace the cloud paradigm and use it to supplement their existing IT infrastructure. "Virtually every enterprise will operate in hybrid mode," he told IW editor-at-large Charles Babcock, with some operations on-premises and some in the cloud. Cloud computing is not a replacement for the data center, he said. "The idea that we're going to one day throw a switch and move everything out to one of a small number of external data centers, located next to a low-cost power source, is nonsensical. It's not going to happen. Cloud computing is not the end of IT," he said.

With all the hype cloud services have been getting recently, it is nice to hear a more reasonable discussion of what cloud services offer and where they fit in an enterprise IT strategy. For IT managers, it also sounds like they won't all be replaced by a cloud. If companies like IBM, HP, and Savvis can deliver the savings and user control promised by cloud services, along with the high level of security and reliability they provide with their other enterprise services, then the Cloud has a chance of surviving the next strong wind.0