Expert Witness – In the clouds

Adrian Sunderland, CTO of Griffin Internet

This month Griffin’s CTO, Adrian Sunderland, explains how email may still be the real killer app for the cloud and the opportunity for the channel.

Microsoft

Steve Ballmer was in London in October whipping the press, partners and anybody else that would listen, into a cloud frenzy. He stated back in March that Microsoft had gone ‘all in’ with its cloud strategy and followed his recent visit to the UK with the announcement of Office 365, Microsoft’s productivity software suite for the cloud. Office 365 delivers Office, Exchange, Sharepoint and Lync (formerly known as Office Communication Server) over the Internet; which is very much the Software as a Service (SaaS) model that so many people have been talking about for so long.

Office 365 is going to be available to paying customers some time in 2011, but it isn’t the only cloud offering that Microsoft has. Windows Azure is Microsoft’s Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) offering and has been available since February 2010. It only supports Windows Server operating systems and only Microsoft development tools, but nevertheless, if you’re a Microsoft shop then Azure is a credible cloud computing platform.

Google

Google operates the largest and fastest-growing cloud computing infrastructure in the world; it has to support all the Google products and services. Google’s current cloud offerings are encapsulated in the Google Apps product set. This provides a suite of web-based applications such as email, calendar, word processing etc. Google doesn’t disclose, in its financial statements, the revenue from Google Apps separately, so nobody knows just how much traction it’s getting from its SaaS activities.

Google does not, at the time of writing, have any Infrastructure as a Service offerings and probably won’t until they invent their own operating system. However, you can host simple websites in the Google cloud using the Google Sites service or even create your own web-based applications using Google App Engine.

Amazon

A few years ago it would be hard to imagine the online book seller would become a giant of the emerging Cloud Computing space, yet Amazon has done just that. Although, like Google, Amazon doesn’t divulge its cloud revenues separately, a recent report by analysts puts the estimate at $500m revenue for 2010, which would make it easily one of the largest hosting companies in the world.

Amazon’s current offerings fall into the Infrastructure as a Service (IaaS) category. That is to say that they enable organisations to buy computing capacity within the Amazon cloud to run Windows Server or Linux operating systems. Customers are then responsible for whatever applications they decide to load onto those operating systems. The service provided is provisioned almost in real time and has no minimum contract term.

So, what about the Channel?

Will your customers feel comfortable using hosted applications over the wild, wild web? How secure is your business-critical data over public internet?

They also need fast reliable, secure and costeffective connectivity to access their cloud-stored data. Until this is achieved we will probably see hybrid solutions where they still have some applications and data stored locally.

Very often if you want to understand what the SME market will be buying in 1-2 years time look across the pond at what US SMEs are doing right now. At the very low end (1-5 employees) they are experimenting with public cloud offerings from Microsoft, Amazon and Google and at the very top end (500+ seats) they are building their own private clouds. The interesting bit is in the middle. These guys prefer local trusted suppliers to large multinational vendors and they are big enough not to want to entrust their applications and data to the public internet by signing up to public cloud offerings. They are moving from internet-facing connectivity to private and it is predicted (Forrester 2009) that more than 50% of SMEs will have a private MPLS network by the end of next year.

Furthermore I am convinced that the significant margin opportunity for the channel isn’t from cut down web-based apps, but from providing the rich application experience that customers are used to but with the benefit of being remotely served, remotely supported and paid for on a utility (pay per user per month) basis rather than a big licence cost hit every 12 – 24 months.