VC’s Guide to Enterprise Cloud Computing – Jam Today, Not Tomorrow

Grazed from Sys Con Media. Author: Cloud Ventures.

The backbone of our upcoming submission to the Canadian Government on how they can best manage their $400m VC industry booster, is a deep expertise in Enterprise Cloud Computing.

We will be able to describe a high-growth fund because we’re able to define where the high-growth industry sector opportunities are. As Gartner describe, Cloud is booming amongst an overall lackluster IT sector growth, forecast to reach over $200 billion by 2016.

This will be shared via various ongoing activities, starting with this first document, my snapshot of ‘The Investors Guide to Enterprise Cloud Computing‘…

The paper details hot sector trends like:

• The role of Cloud Best Practices as a service innovation framework
• Cloud 2.0 and the role of Cloud as “Overlay Architecture”
• Hybrid SaaS and other innovative new service models
• And much more…

Download: 12-page PDF

The headline refers to an article I wrote for the same purposes, but ten years ago, with the point being that Cloud isn’t a new technology that has suddenly appeared, but rather represents what is a steady, ongoing evolution of Internet-centric technology that has been underway for a number of decades now.

To illustrate all of these points check out this white paper I wrote in 2002, “XML Web services – Jam today, not tomorrow“. Almost ten years ago the same underlying principles offered business benefits under the umbrella of ‘Utility Computing’ that are the same for today. Fundamentally this technology offers virtualization and workflow automation for IT infrastructure, so that the repeated “manual labour” can be systemized to reduce HR cost and downtime through eliminating operator error.

Swap the concept of an XML “services grid” for Cloud Computing and you’ll see this paper describes elements of Private Cloud, with this automation of IT labour the same principle business benefit. For VCs this is hopefully quite helpful, because the start-ups I profiled in it were all acquired in the following couple of years.

It highlights the type of deal opportunities this market will present. The vendors who were profiled in this article were essentially the Cloud software providers of the time, and all were quickly acquired by the big players moving into the market, such as Sun and Terraspring, Veritas buying Jareva and also Ejasent, as well as IBM grabbing ThinkDynamics.

Sun touted their N1 vision as the equivalent to Cloud at the time, as did HP with their Utility Data-Centre vision, ultimately killed in 2004 but as described in this white paper it offered a solution for automating data-centre operations.
ITaaS – The Rise of Service-Focused IT

Dial forward and sure it’s the same core message but also it’s fair to say the technology has advanced considerably as well. Amazon didn’t exist then so it was more theory than fact, whereas now we have extensive availabilty of on demand ‘credit card IT’.

Even just the economics of this is a game-changer for CIO’s, who can now transform what IT can do for the business, given the opportunity to harness this new market.

In my Jam Today article I focused mainly on data-centre automation, so that the IT department can act more as a service provider to the organization, improving business process through this platform.

This is the same message as today, with the overall term being ‘ITaaS’ – IT as a Service.

Cisco explain this effect in their recent white paper Enabling IT as a Service (11-page PDF), and also in their blogs here, with the white paper making the most critical point right at the start:

“Frameworks such as ITIL have provided an impetus for this service mentality, but with an emphasis on IT operations and less focus on infrastructure and application development. The result was still a siloed IT environment held together by heroic efforts. The majority of IT spending is dedicated to “keep the lights on” activities, hindering IT’s ability to keep up with the pace of business innovation. Enter virtualization and cloud computing: essential building blocks for the agility, flexibility, and “services” focus that IT needs to deliver to the business.”

Bingo. “Why Cloud Is Important To CIO’s In A Nutshell”.

Programs like ITIL have stipulated service processes but this is based on fixed-asset IT. Service-oriented IT is literally that, technology that you consume (and then internally supply) as a service.

This new approach goes to the heart of the new transformational role for the CIO, in particular the alignment of IT agility to business process improvement.

“the CIO, who is gradually becoming a broker of IT services with a business-first mentality that guarantees a service will be delivered via the best method possible. In the future, a service could be delivered via IT internally or through an external cloud provider, depending on the needs of the business.”