This article originally appeared in the Sept. 2011 issue of INTERNET TELEPHONY
Before many of us had even heard the phrase cloud services, IBM (News 
- Alert) was hard at work researching this concept and engaging with select customers to discover and define the potential benefits and challenges of cloud solutions. Mike McCarthy, vice president of cloud computing for IBM Global Technology (News - Alert) Services, says the company has learned much about the value of the cloud from its clients via the thousands of engagements it’s done over the last few years. He will share some of these nuggets of wisdom during his ITEXPO West keynote speech at this month’s event in Austin, Texas.
As McCarthy notes, interest in the cloud has exploded.
Indeed, 60 percent of 3,000 global CIOs that IBM recently surveyed said their organizations are ready to embrace cloud computing over the next five years as a means of growing their businesses and achieving competitive advantage. That’s nearly twice the number of CIOs who pledged their allegiance to cloud computing two years ago. The IBM research also indicates that seven out of 10 CIOs in the U.S., Japan and South Korea, and 68 percent in China, now identify cloud as a top priority. Meanwhile, Ovum (News - Alert) says 63 percent of multinational corporations in the Asia Pacific are using at least one type of cloud service, which the firm defines as including networking, communications, applications, corporate IT systems, data management, security and backup.
Gartner (News - Alert) forecasts that by the end of this year cloud-based services will account for almost a quarter of the overall hosting market, excluding co-location and mass-market hosting. And a Morgan Stanley Research study released in May forecasts a 50 percent compound annual growth rate in the growth of public cloud-based workloads over the next three years.
“Our analysis suggests robust growth not just for the newer, less developed markets in the public cloud like platform as a service and infrastructure as a service, but also the more mature software as a service segment — where we forecast workloads growing at a similar 50 percent CAGR,” the Morgan Stanley Research study states. “Within on-premises environments, the provisioning of workloads into private cloud or virtualized environments should see rapid expansion as well, growing from 32 percent of workloads today to 52 percent in three years.”
For its part, IBM expects to generate upwards of $7 billion from the cloud by 2015, according to McCarthy.
The cloud strategy at IBM is focused around the enterprise, not just from a technology perspective, but also in how the company defines its pricing and payment models, McCarthy says. The fact that IBM began its cloud effort more than five years ago and has a lot of practical experience with the cloud, he adds, gives the company a unique perspective on the market.
Blue Cloud is a set of labs IBM has created around the world to do first-of-a-kind cloud projects with customers. At these labs, IBM tests new cloud apps with clients before it rolls them out on a larger scale, he says.
IBM also has been a test bed of sorts for its own cloud hardware, software and services, McCarthy says.
“We kind of ate our own cooking, if you will,” he says.
Big Blue also is active in various standards-focused efforts focused on the cloud. For example, IBM is leading the Cloud Standards Customer Council along with companies like Lockheed Martin (News - Alert) and others, McCarthy says. The Cloud Standards Customer Council is an end user advocacy group dedicated to accelerating cloud's successful adoption, and drilling down into the standards, security and interoperability issues surrounding the transition to the cloud.
While the rise of the cloud continues on various fronts, McCarthy says that the software-as-a-service model is the furthest along.
“In the SaaS model, that’s getting to be relatively mature as a model,” he says, pointing out IBM’s LotusLive Collaboration and Meeting Suite, and the IBM Tivoli Live offers on this front.
On the infrastructure or platform side of the cloud equation, he adds, the industry is at an inflection point in the market. Over the years a lot of companies have dipped their toes in the infrastructure-as-a-service pool, he says, but now clients are starting to understand there is benefit to moving workloads onto managed hosted clouds.
McCarthy says IBM has seen significant uptake of its managed cloud solutions in the last nine to 12 months. The company has always had a large number private cloud number of users, he explains, but now it’s starting to see the public cloud taking off as well. That’s why the company timed its IBM SmartCloud Enterprise + for delivery this year, he says.
The introduction of SmartCloud Enterprise + will follow by about a year IBM’s introduction of SmartCloud Enterprise, an infrastructure-as-a-service offer. Clients have been asking IBM for more flexibility and scope, so it developed SmartCloud Enterprise +, which McCarthy says provides new levels of choice for clients related to management support and deployment, security and isolation, availability and performance, payment and billing, and more.
IBM initially offered a KVM hypervisor, but with the new service it adds support for a VMware hypervisor. IBM also is adding new payment options; in addition to the pay-as-you-go option, clients will now also have a monthly payment option. These are just a couple of examples of what’s new with SmartCloud Enterprise +.
Speaking of flexibility, McCarthy adds that it’s also important to enable organizations to transition to the cloud how and when they are ready to do so. Rather than simply laying public and private cloud offers on the table, he says, IBM helps clients forge a path to migrate existing workloads to the cloud.
“That’s a really important aspect of what we’ve learned: How to assist clients in that migration,” McCarthy says.
He explains that this process starts with an analysis of what the client has and what is appropriate to move to the cloud.
“There are some things that just don’t make sense for the cloud yet,” he adds.
For example, some regulations around data privacy and security make it difficult or untenable for certain applications to move to the cloud. But it’s not always a regulatory or technology issue that prevents the migration to the cloud, he adds; sometimes clients simply are not comfortable moving select applications, such as client credit card information or sensitive internal data, to the cloud. That’s fine, he continues, but what every organization should know is that the cloud is the future for many IT applications and that cloud solutions have much to offer in terms of features, flexibility and savings.
“Cloud is real,” he says. “Don’t be afraid of cloud.
“There are capabilities and expertise out that to let you take advantage of it,” McCarthy continues. “It’s available right now, and there are vendors like IBM that know how to make this work for you.”
Edited by Stefania Viscusi
