Vendors say 'cloud', users think 'elastic'

New Zealand users are keeping a weather eye on cloud computing

Strong differences in thinking remain about the benefits and uses of cloud computing — and even its definition, according to local users and vendors.

Users may be embracing the cloud for some of their horizontal applications, such as email, but remain reluctant to go further and change the way core and vertical applications are delivered.

Speaking at a recent Brightstar cloud computing conference in Auckland, the CEO of on-demand hosting provider OneNet, Mike Snowden, was careful to draw the line between cloud computing and virtualisation. But users at the conference and outside still point to in-house virtualisation as the way forward, for now at least.


See also: Cloud computing no panacea: bike manufacturer

Snowden says there is a fundamental shift in the way we think of business happening with the emergence of novel business models that replace heavy capital investment with pay-for-use or, better still, pay for value models.

He says virtualisation, now widely adopted by New Zealand organisations, is not cloud computing and the concept of internal clouds fails to deliver many of the key benefits of these new models.

“Virtualisation is an enabler of the cloud but it is not cloud comuting,” he says.

Internal clouds still require capital expenditure, companies still own the complexity of these systems, users remain captive and still don’t pay for what they use.

However, users still appear unwilling to take a leap into the cloud. Speaking on the second day of the conference, which focused on datacentres, dairy giant Fonterra’s chief technology officer, Andrew Wilshire, said he preferred the term “elastic computing” to “cloud” and its several siblings: SaaS, on demand and so forth.

Fonterra is half way through a project to virtualise and consolidate its 900 servers.

“Elastic computing sums it up quite nicely,” he says.

Wilshire defines virtualisation simply using a dictionary as “not physically existing but made by software to appear as if it does” through abstraction and encapsulation.

Wilshire says Fonterra was only achieving a utilisation rate of 5 percent on its hardware and used to buy new capacity for each new application. That resulted in a familiar situation as over time and with mergers and acquisitions complexity increased and legacy systems and data silos multiplied.

“We have heaps of proprietary technology including ERP and manufacturing systems that are 20 years old in some cases,” he says.

That led in turn to inflexibility, increased operational costs, maintenance downtime, uncertain application dependencies and increased expense for disaster recovery.

VMware implemented by Auckland company ViFX is the core of the virtualisation solution while a longer term project to standardise on SAP will sort out some of the application complexity, he says.

The journey, as Wilshire sees it, is towards infrastructure automation, dynamic infrastructure and a move to “role-based computing”, to manage the deliver of IT services to different individuals, rather than the cloud. Fonterra is already “dipping its toes” into application and access virtualisation, he says.

“Capacity planners are the new administrators,” Wilshire says.

The business value of virtualisation is growing, he says. But challenges remain, including software vendor support for virtualisation itself. Some platforms, such as AS400 and legacy Unix, remain unvirtualised, he says.

However, OneNet’s Snowden says it is now possible to deliver such legacy applications from the cloud, and OneNet does exactly that using Citrix.

One OneNet customer that presented at the conference, advertising agency director Rob Tillotson, of Colenso BBDO, which is part of the Clemenger Group, did not provide evidence of that. having migrated email to the cloud rather than core legacy applications.

Nevertheless, the agency has reaped significant savings from doing so.

“Email is critical, but managing it is not the business we are in,” Tillotson says.

Colenso employs 350 staff in eight businesses that have to be kept separate due to client sensitivities. Facing an expensive hardware and software upgrade, the agency looked at other options and ways to turn the fixed infrastructure cost into a variable cost that would track business performance more closely and avoid periodic over- and under-provision.

However, one significant potential saving was not on the table: staff. Eight staff were still needed for support. Despite that, costs savings have been made from the shift, and it has helped focus IT staff on higher value work.

Tillotson says Gmail was considered, but Colenso has been a Microsoft shop, finds Exchange “bullet-proof” and didn’t feel happy about having data residing overseas.

“We prefer local providers and a localised contract,” Tillotson says, adding the the concept of putting everything in a pipe under the ocean makes him uncomfortable.

“Sorry, I’m just a risk-averse person,” he says.

The email shift has been pretty seamless, Tillotson says, except for a few problems with the Macintosh fleet not talking to the servers.

Snowden says cloud computing is at the peak of the hype cycle and in the early adoption phase. According to a Gartner model, it should now fall into the “trough of disillusionment” before emerging strongly as a new disruptive force.

Last week, another hosting company, Revera, tried to give it a nudge into that trough.

Revera director Roger Cockayne, in reaction to a cloud service announcement from ISP Orcon, says customers should be wary of “so-called cloud computing providers”, many of which have little or no experience in the specialised infrastructure required to keep services afloat.

Cockayne says definition vagaries had sparked an IT industry land-grab, “where every man and his dog with a server and internet connection is suddenly in the business of cloud computing”.

“It’s dotcom déjà vu, only this time it’s called cloud computing,” he says.

Cockayne also warns that the hype could leapfrog reality.

“Customers shouldn’t be fooled by online providers who overnight change the signs hanging in their windows from ISP to cloud services,” he says. “Customers should ask to see what’s happening out the back. The physics of delivery might be easier and cheaper, but it’s the backend people need to worry about.”

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Tags andrew wilshireonenetrob tillotsonmike snowdenclemenger groupcloud computingFonterra

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