Chapter 1

So, what is “Cloud Computing”? As we shall see, the experts disagree on its exact definition
but most concur that it includes the notion of web-based services that are available on-
demand from an optimized, and highly scalable, service provider. Despite the technical sound
of its characterization, it has not only garnered excitement from technologists but has
captured the attention of business leaders around the world.
2009 may long be remembered as the year of the worldwide economic downturn. The impact
across many industries, including IT, was devastating. And yet, even then, there were
bastions of hope in the midst of all the turmoil. One of the most prominent IT analysts,
Gartner, identified cloud computing as the primary source of growth in IT spending,
increasing over 20% year-on-year to global revenues of $56B in 2009 and surging to over
$130B by 2013 .
In other words, while IT managers have seen their budgets decimated in the course of intense
scrutiny over any uncritical or non-urgent costs, they have actually received permission to
spend more in a completely new area that didn’t even appear in any of their proposals a few
years ago.
At the Gartner Emerging Technologies conference in 2008, analysts Daryl Plummer and
Thomas Bittman made a bold declaration that: “By 2012, 80 percent of Fortune 1000
companies will pay for some cloud computing service, and 30 percent of them will pay for
cloud computing infrastructure”.
While it is always difficult to predict the future, the signs are appearing that cloud computing
is poised for a breakthrough. Before you bet your business on it, however, it’s worth
investigating the relationship between the excitement around new technologies and actual

Figure 1-1 Cloud Hype Cycle
Industry analysts use a “Hype Cycle” (originally developed by Gartner and loosely depicted
in Figure 1.1) to describe the tendency for new technologies to garner an excess of interest
long before they are mature enough to be deployed in production environments. The
disappointment that many advocates feel when their initial zeal is frustrated leads them into a
“Trough of Disillusionment”. During this phase many lose heart and redirect their interest
toward other promising ventures. However, as the underlying problems are resolved and
aligned with user needs the systems become ready for the mainstream and interest picks up
There is an element of subjectivity around the precise positioning of any technology in the
cycle. Gartner placed cloud computing in the middle of the initial slope in 2008 and advanced
the position to the peak of the hype curve in 2009. Other analysts loosely concur with this
assessment – there is little disagreement on the level of enthusiasm around cloud computing,
even if it may already be seeing some signs of the onset of disillusionment in 2010.
A more objective, albeit not necessarily extremely reliable, way to gauge the excitement
around any given topic is to use Google Trends (Figure 1.2). You can enter a search
expression and Google will provide a graphic representation that illustrates the relative
frequency of search of this specific expression over time.

Figure 1-2 Google Trend "Cloud Computing"
For instance, the figure below illustrates the popularity of the phrase “Cloud Computing”
over the past five years. Until the middle of 2007, the term was virtually never used in search
queries nor did it appear in news references. Since then, the search requests and appearances
in news articles have grown dramatically.
While it is very interesting to understand the hype around a new technology, it is also helpful
to examine the historical implementation cycle of new technologies.

Figure 1-3 Moore's Implementation Chasm
Moore segments the target market according to the speed with which they adopt new
technologies. He uses five categories (Innovators, Early Adopters, Early Majority, and Late
Majority, Laggards) to designate these segments. While being at one extreme or the other
may give cause for some concern there is not necessarily any value associated with being
earlier or later in the adoption curve. Some companies can gain competitive advantage by
leveraging and showcasing the newest technologies. Others may risk their business if they
pursue areas outside their core competency too early.
Moore’s salient observation is that there is a significant barrier to overcome between the
Early Adopters and Early Majority. Technology enthusiasts often embrace new developments
before the commercial business case becomes compelling. A generally applicable business
case, alongside a reliable and easily deployable technological foundation, pave the way to
widespread adoption which will be recognized and further refined by an Early Majority.
An interesting twist that cloud computing brings to the adoption model is that, in some ways,
the propensity to adopt may be reversed from other technologies. Typically, technologically
savvy organizations prefer new developments while those who like to remain distant from
technology also like to keep the status quo as long as possible.
In the case of cloud computing, an increased trend to outsourcing shifts large portions of the
information technology systems outside the company control and responsibility. This can be
attractive to those Luddites who would prefer to concentrate on non-technical aspects of their
business and are glad to see their fixed IT costs reduced and their computer departments,
which they never considered to be contributing to the bottom line, minimized.
We have established that “Cloud Computing” is one of the buzzwords for 2010. Everyone
wants to know more about it. All the vendors are rebranding their products as being aligned
with the cloud. And still the most common question I hear when I mention the topic is “what
does it actually mean?”
It makes sense to start this discussion with the same question. After all, you will have trouble
building a solid architecture if you are unsure what you are trying to build.
Unfortunately the task of defining cloud computing is much more difficult than you might
expect. It isn‟t hard to find an authoritative definition. Virtually anyone with an interest in
information technology has one. In fact, that is the root of the problem. Everyone has a
different definition of cloud computing.
For instance, some definitions which have circulated in the blogosphere include:
The 451 Group: “The cloud is IT as a Service, delivered by IT resources that are
independent of location”
Gartner: “Cloud computing is a style of computing where massively scalable IT- related
capabilities are provided „as a service‟ across the Internet to multiple external customers”
Forrester: “A pool of abstracted, highly scalable, and managed infrastructure capable of
hosting end-customer applications and billed by consumption”
Wikipedia: “A style of computing in which dynamically scalable and often virtualized
resources are provided as a service over the Internet. Users need not have knowledge of,
expertise in, or control over the technology infrastructure "in the cloud" that supports them.”
This is a comprehensive definition but it hides the primary discovery of the paper that no
single theme seemed to permeate all of the definitions. This observation may be somewhat
discouraging but before you concede defeat you might consider that, although the definitions
are not identical, or in some cases even very similar, they are still not contradictory. They
simply emphasize different aspects of a complex and multi-faceted notion. One popular
analogy is an old Indian story of six blind men who encountered an elephant and attempted
to determine what it was using their hands. One felt a leg and compared it to a pillar; another
felt the tail which he likened to a rope; the trunk felt like a tree branch; and the ear like a
hand fan; the belly was like a wall while the tusk felt comparable to a pipe. Each description
held an element of truth and yet fell short of a complete description.
Similarly, most definitions of cloud computing include elements of the complete description
and yet they typically do not address every single aspect that anyone has associated with
cloud computing.
I won‟t add to the confusion with another attempt at perfecting the definitions that are already
available. For the most part, they all do a good job at giving an idea of what is involved. And
it‟s not obvious to me that there is any particular value in having an authoritative definition.
The most important consideration for any IT manager is not whether a potential solution
satisfies the definition of cloud computing but rather whether it adds value to the business. A
cloud-based solution that does not increase revenue or decrease costs is of little interest.
And a completely non-cloud-oriented solution that does unambiguously improve the bottom
line should be implemented regardless of the name by which you call it.
The key to understanding common interpretations of the term “Cloud Computing” is to
examine the assortment of attributes of typical cloud solutions. This doesn‟t mean that every
cloud attribute is essential to cloud computing or even that there is necessarily any which
qualifies a given approach as fitting the cloud paradigm. On their own, they are neither
necessary nor sufficient prerequisites to the notion of cloud computing. But typically the
more of these attributes apply; the more likely others will accept it as a cloud solution.
Some key components include:
Off-Premise: The service is hosted and delivered from a location that belongs to a service
provider. This usually has two implications: The service is delivered over the public Internet
and the processing occurs outside the company firewall. In other words, the service must
cross both physical and security boundaries.
Elasticity: One main benefit of cloud computing is the inherent scalability of the service
provider, which is made available to the end-user. The model goes much further in providing
an elastic provisioning mechanism so that resources can be scaled both up and down very
rapidly as they are required. Since utility billing is also common this elasticity can equate to
direct cost savings.
Flexible Billing: Fine-grained metering or resource usage, combined with on-demand
service provisioning, facilitate a number of options for charging customers. Fees can be
levied on a subscription basis or can be tied to actual consumption, or reservation, of
resources. Monetization can take the form of placed advertising or can rely on simple credit
card charges in addition to elaborate contracts and central billing.
Virtualization: Cloud services are usually offered through an abstracted infrastructure. They
leverage various virtualization mechanisms and achieve cost optimization through multi-
Service Delivery: Cloud functionality is usually available as a service of some form. While
there is great variance in the nature of these services, typically the services offer
programmatic interfaces in addition to the user interfaces.
Universal access: Resource democratization means that pooled resources are available to
anyone authorized to utilize them. At the same time, location independence and high levels
of resilience allow for an always-connected user experience.
Simplified management: Administration is simplified through automatic provisioning to
meet scalability requirements, user self-service to expedite business processes and
programmatically accessible resources that facilitate integration into enterprise management
Affordable resources: The cost of these resources is dramatically reduced for two reasons.
There is no requirement for fixed purchases. And the economy of scale of the service
providers allow them to optimize their cost structure with commodity hardware and fine-
tuned operational procedures that are not easily matched by most companies.
Multi-tenancy: The cloud is used by many organizations (tenants) and includes
mechanisms to protect and isolate each tenant from all others. Pooling resources across
customers is an important factor in achieving scalability and cost savings.
Service-Level Management: Cloud services typically offer a Service Level definition that
sets the expectation to the customer as to how robust that service will be. Some services
may come with only minimal (or non-existent) commitments. They can still be considered
cloud services but typically will not be “trusted” for mission- critical applications to the extent
that others (which are governed by more precise commitments) might.