Though cloud computing seems to be everywhere, there are a number of hurdles to getting enterprise IT pros to accept and embrace the technology for mission critical apps. Matt Rubins, a venture capitalist who invests in enterprise infrastructure and cloud related technologies for Boston-based MC Venture Partners, expects that to change, but not until the young cloud computing platforms mature.
Rubins, who holds a BS in applied and engineering physics from Cornell University and an MBA from the Harvard Business School, said cloud computing is a vastly over-used buzz term used to describe a very simple concept; external resources that are provided on a pay as you go basis.
IT folks are still skeptical and hesitant to use cloud computing, yet vendors are coming out of the wood-work with their own flavors of cloud platforms. (Microsoft Windows Azure, Amazon EC2, VMware's Virtual Data Center-OS, SalesForce.com, Terremark, and the list continues to grow). Is there really a market for all of them?
Matt Rubins: I think the market right now is really a subset of the managed hosting business - which is a $9 to $10 billion a year business that just continues to grow. It is early to tell, but I think there is a market for all of these players. People comfortable with Microsoft and Hyper-v it will logically use Azure.
Does it make sense for a company like Microsoft to get into the cloud computing platform business?
MR: When you look at the competitive landscape, guys went into this because they had extra capacity to sell. Amazon EC2, then Google apps, Microsoft has been in and around the cloud space and are making a go of it with Azure, and VMware - they can't be discounted.
Our view though is that the guys for whom outsourcing servers and application support makes the most sense are the people in the managed hosting space – like Rackspace. They lease servers to customers who then host their apps on those boxes. The only difference between cloud and managed hosting is that managed hosting isn't a pay as you go model.
A lot of the enterprise IT [pros] I chat with think cloud is a fad, or they simply don't want to let their data outside of the four walls of their data center, because of concerns over things like security and availability.
MR: The hard part of the business is consistently delivering service at a good value proposition to customers and with no downtime. Selling the service to the enterprise IT guys is difficult - the bigger the company the less they want to outsource - they are what we call the server huggers. For them, we need to have bullet proof SLAs, bandwidth and security to sell the services. The people who have been using clouds successfully so far are in areas like social media; they put things in the cloud that don't need five- nines (%99.999), but can live with three-nines of availability and they need to put up and take down CPUs quickly.
[Widespread acceptance of clouds] will happen in stages - a couple pieces still have to be built. Management platforms are nascent and security is a big part of the story. People also have to see reliability in their models.
The first stage is to get people comfortable with virtualization, and once that happens, you break down those silos. With virtualization, most people start out using it in testing, then into production, and once comfortable with that, they could move to clouds. We are still a ways away from that.
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