Is Private Cloud a Sustainable Solution for the Enterprise?
There has been a lot of press about the coming private cloud revolution. According to a 2011 IDC report widely touted by Microsoft, by 2015 private cloud enterprise servers are projected to reach revenue of $5,881,900,000. On the surface that might seem like a sign that the anticipated widespread adoption of private cloud by the enterprise has final arrived. However, the primary reasons that companies adopt cloud computing is for cost savings and the ability to deliver business agility.
The public cloud clearly provides both, so why should companies undertake building expensive private cloud infrastructures? Do they expect to be able to match the economies of scale and flexible delivery models enjoyed by AT&T, Rackspace, Google, or Amazon?
For the typical enterprise, when the CIO announces the company is implementing a cloud initiative, the natural instinct is to build on existing in-house expertise. Since close to 100 percent of the top global enterprises have extensive VMware virtualization installations in their data centers, it would seem logical to build an infrastructure cloud using the vCloud Suite of cloud management tools and the VCE vBlock hardware.
However, to the dismay of many enterprises, they have found vBlock is expensive and needs to be configured for a specific use case—something that is not always known in advance—and the vCloud Suite is still a weakly linked hodge-podge of infrastructure and development tools. Once the licensing costs are included, enterprise IT organizations often start rethinking this strategy.
Most enterprises should not be in the data center business at all—cloud or otherwise—as Tim Crawford, former CIO and member of US DOE/EPA industry consortium on data center efficiency notes. Building data centers is extremely capital intensive and requires highly specialized knowledge. For the enterprise that wants to take advantage of the cloud, the best approach is to leverage the expertise of existing public cloud and data center providers that have both the investment and the expertise in building real large-scale systems.
The problem is that there are no truly enterprise-ready elastic cloud alternatives in the market today. OpenStack is promising, but it’s more suited to service providers that can build the required ecosystem to support it—and few of the service providers have cost effective products targeted at the higher security, global access, and availability needs of the enterprise.
Looking into the crystal ball for the next few years, there will initially be an interest in building in-house cloud infrastructures, but as companies find out how difficult and complex they are, expect more companies to turn to outside providers to fill the gap. The service providers that are not creating enterprise grade cloud services at a reasonable price point are missing a great business opportunity.
