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Enterprises gorging on excess cloud capacity

Is it true that if you don't use it, you lose it? When it comes to the cloud, enterprises are buying excess capacity at lower prices. David Linthicum discusses whether the extra cloud capacity is being maximized.

Buying in bulk is nothing new. From food to technology, everything is offered in bundles, and cloud computing is no exception. Enterprises are buying excess cloud capacity at reduced rates, but what is sparking the movement?

"Ultimately, we move to cloud computing because of the on-demand aspect of it, therefore we're only consuming the compute, storage and things as we need it," said David Linthicum. "But, it looks like they're putting together these deals where you're buying ahead of capacity [and] buying excess capacity of these systems."

Linthicum dishes on the latest cloud trends with Ash Ashutosh, CEO of Waltham, Massachusetts-based Actifio. Other topics include:

1. What should enterprises consider to manage cloud resources effectively? According to Linthicum, excess cloud capacity leads to virtual shelfware. What are the problems with shelved software? Ashutosh believes the problem is in the packaging.

"As a software vendor, you're trying to put together as much capability as possible and try[ing] to put it together in a bundle that makes reasonable 'shelf space,'" Ashutosh said. "That leads to my inability to use 100% of the features that I have, partly because that's how it gets packaged." (6:30-11:57)

2. Although Google added new availability zones, customers are still concerned about data center location. Are Google customers too location-sensitive? Ashutosh believes it's a reasonable concern, and that Google is in the midst of a cultural change.

"It is the evolution of Google from being a flat, consumer-oriented company to being a little more on the enterprise side," Ashutosh said. Is the purpose of cloud computing defeated by needing to know where data resides?

"If you're in a business that requires some compliance with laws [and] some compliance with some geopolitical concerns, you have to draw the cyber boundaries around your data … I don't think it takes away from the cloud," Ashutosh said. (12:00-17:55)

3. Companies are beginning to store larger files with cloud-based services, but is it a step in the right direction? Linthicum believes it is responsible for much of the cloud's continued growth.

"It's going to be an evolving thing over time, but I think they're taking advantage now and it's going to continue to prove successful," Linthicum said. (18:00-26:00)

Next Steps

Compliance and cost issues with cloud software licensing

What you need to know about data center locations

This was first published in August 2014

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