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The Hartford and Johnson & Johnson tout cloud benefits

Now that web applications and test and development are proven uses for cloud computing, finance and pharmaceutical research are set to be the next big adopters.

Large finance and research enterprises are taking steps into the realm of cloud computing, adopting and adapting...

cheap, flexible infrastructures into their massive IT operations. While they caution that adoption will be a steady trickle instead of a flood, analysts say that economic arguments and growing understanding of how to use cloud resources make its continued growth inevitable.

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This heralds a small, definitive step away from cloud computing being thought best suited to the little guy or Web-only business that needs flexible and cheap resources. Now, enterprises with needs uniquely suited to the cloud are kicking the tires and looking towards future adoption.

"We haven't really done more than benchmark [Amazon Web Services]," said Bob Nordlund, assistant vice president for Enterprise Risk Management and Actuarial Technologies at The Hartford Financial Services Group, speaking at the 451 group's conference. Nordlund has no doubt, however, that The Hartford will be shifting its infrastructure needs to the cloud as hardware life cycles come to an end. It's just a matter of realizing returns out of current infrastructure investment, he said; the company can't simply dump expensive hardware for cloud.

Adapting to the cloud
Nordlund said he had no compunctions about using Amazon Web Services (AWS) as an adjunct to The Hartford's vast IT operations, which process insurance and financial data and face very high needs at regular times during the year.

The Hartford is currently using AWS to mock up its grid operations, spinning up machines in its Elastic Compute Cloud (EC2) to run simulations as it does on its own infrastructure. Nordlund said he is preparing for an eventual migration, which will see seasonal number-crunching move into the cloud, and deconstructing some of the potentially moveable older applications.

"We had to go back and 'reverse-engineer' a lot of the agreements [with older systems vendors], as a lot of them are location specific," he said. However attractive it might be to push an old FoxPro application into AWS, for instance, the licensing forbade moving the physical location of the software installation. Security is not a strong barrier either, Nordlund said.

Enterprises] are looking forward to the time when they are going to be able to bridge to the cloud.
William Fellows, principal analyst for the 451 group,
"When we started to think about Amazon as a possibility, the first thing we did was run it by our security people," said Nordlund. They were fine with the basic integrity of AWS, but no user data is going into the cloud as yet, he said. "We're mostly running Monte Carlo [simulations] where data security is not a concern," he said.

Pharmaceutical firm also on the cloud path
Sebastian Piotrowski, systems engineering lead at Johnson & Johnson, echoed the sentiment. He said Johnson & Johnson processes data in AWS but it is fully obfuscated.

"Unless you somehow know the context, the data won't do you any good," he said.

Piotrowski said the pharmaceutical giant's research data-crunching needs were ideal for cloud computing, such as infrequent but resource-consuming projects like analyzing filing data for drug approval at the Food and Drug Administration (FDA). He also said initial success moving research projects into the clouds meant a growing open-mindedness towards the idea.

"We are working with our business partners to move applications out of the grid and into the cloud as we prove the concept," he said.

Piotrowski said that decisions will come down to figuring out which applications cost less to run in-house, due to bandwidth or storage needs, and which could go out to the cloud. In the meantime, Amazon was the default cloud vendor as far as he was concerned.

"Amazon's offering was the most flexible, and quite honestly, the cheapest," he said.

Cloud pushers maintain its day is coming
Piotrowski and Nordlund agreed that cloud is currently a tiny fraction of overall IT expenditure, but they also firmly maintain that its expansion is just a matter of time. They feel that, for the financial and life sciences sectors, cloud is such a natural fit that there's no way to avoid it. Nordland added that The Hardford currently has a $1 billion IT budget.

Piotrowski and Nordlund said that hybrid models, which scale easily out of their grid infrastructures into public clouds as needed, are also too economical to avoid. For them, the viability of using public cloud resources is no longer in doubt.

"Quite honestly, they don't give a fig about anything but what the market is doing," said William Fellows, principal analyst for the 451 group. Fellows, presenting his research along with the panel, said workloads in the cloud hadn't changed much over the last year -- Web 2.0, test and development, online retailing -- but they had been successful. That makes the economic imperative for larger firms impossible to ignore.

"[Enterprises] are looking forward to the time when they are going to be able to bridge to the cloud," he said. Fellows said his research showed that large organizations no longer had fundamental issues or concerns with cloud computing. They instead had specific concerns, such as service-level agreements, software licensing and data management, that they were expecting vendors to solve.

Mostly, Fellows said, it was a matter of turning the ship and bringing management around to something that was already a reality.

"Internal IT manifests have found that they've got tens or hundreds of developers [already] using cloud in a sort of guerilla fashion," he said. All IT has to do is follow their lead.

Carl Brooks is the Technology Writer at SearchCloudComputing.com. Contact him at cbrooks@techtarget.com.

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