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Show Report: Reality Check at 4th Cloud Expo

To a large extent, cloud computing is a victim of its own somewhat out-of-control hype cycle

Cloud Computing Expo on Ulitzer

The talk at the 4th Cloud Expo this week in Santa Clara was all about enterprise cloud adoption. Is it real? Is it already happening? If so, who’s doing it, which applications are they running and which clouds are being tested?

To a large extent, cloud computing is a victim of its own somewhat out-of-control hype cycle. Since so much has been written and discussed about the cloud in 2009, there is now a growing impatience for actual results. The fact that 2000 people showed up at the Cloud Expo in Santa Clara this week (double the number from last year’s show) suggests that at the very least, interest in enterprise cloud computing remains very real, and the need for practical solutions and use cases is growing more urgent.

There was a growing concensus about a number of issues:

1. The hybrid model of on-prem data centers combined with the use of public clouds and cloud offerings from managed service providers is emerging as the new model for enterprise computing. Enterprise users would like to keep some applications behind the firewall (within an internal cloud or more traditional environment) and put others in the right cloud environment outside the data center.

2. The first applications to move to the cloud are development and test environments, business continuity solutions (“poor man’s DR,” not full active-active scenarios) and web applications. These are more easily separable from other applications and infrastructure within the data center, and tend to be lower risk for moving off-prem.

3. Major hurdles for enterprise cloud adoption remain the same as last year: security, loss of control, lack of integration with the enterprise data center and fear of cloud lock-in. The lock-in concerns have become more pointed as new cloud offerings come into the market beyond Amazon. (As an aside, Rackspace had a strong presence at the show, but surprisingly, Amazon, Terremark, Savvis, Microsoft and other providers were noticeably absent. Many Asian companies appear to be gearing up for new cloud offerings in 2010.)

Beyond these broad areas of agreement, the sessions at the show revealed very little new information about enterprise success stories. In some ways, it was surprising that there wasn’t more visible progress across the industry this year. However, what we’ve learned from our own enterprise experiences is that in 2009, a lot of groundwork is being laid by both cloud providers as well as enterprise IT to prepare for cloud deployments in 2010.

As we’ve geared up for our private beta (started this week and running through the end of the year), we’ve learned from CIOs and heads of IT that they first want to do some “cloud exploration” to validate the experience for admins and users in terms of ROI, functionality and performance. They start by putting a small number of servers into the cloud to see what works and what breaks. They need buy-in from security and risk management to start putting applications and data outside the firewall. They are building TCO and ROI cases to review with legal and finance as they get cloud budgets approved for 2010. For their part, the cloud providers are deeply engaged with POCs and test environments for enterprise users, and are learning what’s missing from their offerings. It seems clear that by the next Cloud Computing Expo in April, we’ll be seeing the results of all this work in some strong case studies by enterprise adopters.

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More Stories By Ellen Rubin

Ellen Rubin is the CEO and co-founder of ClearSky Data, an enterprise storage company that recently raised $27 million in a Series B investment round. She is an experienced entrepreneur with a record in leading strategy, market positioning and go-to- market efforts for fast-growing companies. Most recently, she was co-founder of CloudSwitch, a cloud enablement software company, acquired by Verizon in 2011. Prior to founding CloudSwitch, Ellen was the vice president of marketing at Netezza, where as a member of the early management team, she helped grow the company to more than $130 million in revenues and a successful IPO in 2007. Ellen holds an MBA from Harvard Business School and an undergraduate degree magna cum laude from Harvard University.

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