Why the cloud computing revolution is very real

14 Feb 2011

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In his look back on the week, Siliconrepublic.com editor John Kennedy reveals why time is of the essence in getting real about the cloud-computing opportunity.

In the hour before I took the podium at the Irish Internet Association’s Cloud Computing Debate on Thursday night, I was party to one of the most privileged but intimate discussions I’ll ever have on the subject of cloud. While I spent months writing up various reports and predictions on the cloud I spent time with four people who live with the cloud in a very real sense.

And that’s the operative word here: ‘real’. You see, it’s easy to dismiss trends like cloud computing as hype unless your business is touched in a very real way by this paradigm shift. I was expecting more colourful predictions for the future but instead got a good sense of gritty realism that people working in businesses and running businesses and organisations have to face.

It was amid a week of major developments happening in cloud computing, particularly in Dublin, where core cloud infrastructure for major technology giants Microsoft, Google and others is located. Last week, e-commerce giant Amazon, which has also emerged as a key player in the fast-growing, on-demand cloud-computing business, is investing in a major data-centre expansion in Dublin. It acquired a former Tesco storage facility in Dublin 24. Amazon has bought a 22,539 sq-metre facility at Greenhills Industrial Estate. According to research by Netcraft, Amazon’s cloud hosting now makes up more than a third of all internet-facing web servers in Ireland, with three times more web servers hosted than the next-largest hosting location.

Growth of cloud computing

Cloud computing in the Irish market will grow from a small base at the rate of 40pc a year until 2014, according to a new study by IDC. Lack of awareness and poor understanding have so far hindered growth.

An economic impact study prepared for Microsoft by Goodbody Economic Consultants has revealed that Ireland has many of the attributes to become a global cloud-computing centre of excellence and could capture a large share of the cloud-computing industry, estimated to be worth €40bn worldwide by 2014. The report says Ireland alone has a chance to build a €9.5bn-a-year-in-revenues industry by 2014, resulting in 8,600 new jobs. Not only that, but because cloud computing lowers costs to businesses, by migrating the to the cloud, some 2,000 new non-IT small and medium-sized firms can be created that would in turn employ 11,000 people.

Prior to the IIA event starting, Hassan Nasiri of the Enterprise Architecture Group of Bank of America told me how he is part of a team spearheading a major strategy to move 70pc of the bank’s infrastructure and 80pc of all applications to the cloud in the next few years. Nasiri, a clean cut and highly articulate IT professional, revealed that organisations like Bank of America are driving their own interpretations of the cloud and expect IT giants and consultants to follow in their wake. “We are driving true software as a service (SaaS) and platform as a service (PaaS) initiatives to make use of the internal cloud and the true external cloud and aim to convert all these technologies to be usable for the bank.”

One of the most refreshing technology stories to come out of Ireland is the example of Conor O’Riordan’s TradeFacilitate.com, an organisation that is a business first but has been truly enabled by the cloud to make a meaningful difference for firms trading with the US and EU, especially firms operating from developing countries. TradeFacilitate is a firm dedicated to reducing the costs associated with dated and inefficient paper-based international trade transactions and increasing the trade competitiveness of buyers and sellers globally. O’Riordan said his firm’s membership of the Microsoft BizSpark provides a calling card and a level of assurance when trading in regions like Africa.

All the way from Norway was Torstein Harildstad, CEO of Software Innovation and a former head of technology at publishing giant Conde Nast. Harildstad’s company is indigenous to Norway but has grown to more than 300 people in Sweden and India also and is almost a tantalising glimpse of what should and could be possible for Irish software companies if we had a public sector ready to invest in the cloud. The company has a strong foothold in the public-sector market and is now moving into the private sector, unlike its Irish counterparts who have to go global and win private-sector business overseas without even a sniff of business from the Irish Government.

“We are not selling the cloud to public-sector organisations, we are selling business value,” he explained, as he outlined how cloud computing is enabling very real transparency for the public, for business and ultimately for leaders in public-sector organisations by publishing and providing open access to crucial documentation and correspondence.

Rewriting the rules of the cloud

Proving that the cloud opportunity is within sight of the Irish public sector and could be employed to reduce costs and provide very real value was Tim Willoughby, assistant director, Local Government Computer Services Board. Willoughby was responsible for what is probably the first iteration of cloud computing in Irish government.

Willoughby and his team developed a cloud app linking together all local planning approvals on a single online map. The app pulls together all the data – until now only available county by county – onto a single map, by pulling all the XML data into one place.

He explained that a controversial letter sent by the Chief State Solicitor warning government IT bosses to be wary of buying cloud computing solutions had done a lot of good in ensuring that managers were able to assemble a check list of things to look out for and ensure high standards. “It got rid of some of the snake oil salesmen and meant that businesses that were approaching us had done their homework and were willing to meet high standards.”

Willoughby said cloud adoption in Irish State institutions is inevitable but what needs to be conquered is a fear of the unknown. “The key is finding out exactly what the cloud offers and putting together value propositions. The cloud does not mean we’ll be ripping out ERP systems or making changes to core data, what it should mean instead is high availability of services. By moving infrastructure to the cloud, engineers don’t need to spend time in server rooms, they just need laptops.”

Willoughby and Nasiri both agreed that the next version of the cloud will call into question the opening up of data and being able to shift entire IT infrastructures between cloud providers and that brings with it a whole raft of issues.

“Progressive organisations should be ready and willing to rewrite the rules of cloud computing,” Nasiri said.

View video highlights from speakers at the Irish Internet Association’s Cloud Computing Debate:

LGCSB assistant director Tim Willoughby: icon: launch video

Software Innovation CEO Torstein Harildstad: icon: launch video

Tradefacilitate.com’s Conor O’Riordan: icon: launch video

Hasan Nasiri from Bank of America: icon: launch video

Silicon Republic has embarked on its Cloud Centre campaign to better inform businesses about opportunities in cloud computing. To visit our Cloud Centre, click here.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com