I recently read a post by David Linthicum in which he proposes that a key benefit of cloud computing is the ability to transfer risk from the enterprise to the cloud provider.
At first glance, this seems an obvious benefit of using a public cloud for computing resources. Cloud providers take care of the onerous task of providing computing resources across an organization. If the resources need to be updated, require critical maintenance, or need emergency action, the cloud provider will provide those services. Enterprise IT departments are left to devote effort toward delivering technological capabilities to the business. However, does any of this imply a transfer of risk?
I'd answer that question with "It depends." Whether or not an enterprise has transferred risk by contracting with a public cloud provider depends on the provisions in the Service Level Agreement (SLA) that exists between the enterprise and provider. In some cases (maybe most) the SLA simply provides a refund for a portion of the service fee based on the impacted services. This is clearly not a case of transference of risk. The loss of current and new business sustained by the enterprise during the service outage is not indemnified by the cloud provider. In this sense, the enterprise has done nothing more than transfer the management of their risks to a third party.
True risk transference can be achieved, but it means that SLAs provide both service fee refunds and business loss indemnification. During a service outage, an enterprise's risk is not the fee they are paying for the service but instead the impact on current and future profits. There must be stipulations in the SLAs to address these losses for risk transfer to have taken place.
The differences between transferring risk and risk management may seem obvious, but it does serve to underscore the importance of SLAs in the cloud computing world. Enterprises need to fully understand these SLAs in order to accurately assess the benefits of using a cloud proider. SLAs are poised to be critical in the cloud computing world, and I'm interested to see how they will help shape the competitive landscape of the industry.
Dustin Amrhein[Read More]
A view from the clouds: Cloud computing for developers
with Tags: computing X
Recently, IBM has made its presence in the cloud computing market known with a series of offerings and partnerships that position Big Blue nicely. There have been announcements of university partnerships, new cloud services and clients, and intent to deliver IBM software with Amazon Web Services. To further cloud computing and IBM’s offerings in cloud computing, teams of technical evangelists have been formed to spread the good news. I have joined one of these teams, and I’ll be here from time to time to talk about IBM’s work in the clouds.
Since we are just getting started, I figure it’s appropriate to touch on the definition and composition of cloud computing. I have read and heard hundreds of definitions for cloud computing, and they all make good points. Nearly every single definition describes a computing solution in which resources, both hardware and software, scale up and down to meet the needs of the cloud consumer. That consumer may be an end-user accessing applications that run in the cloud, or it may be the application running in the cloud that depends on the lower layer services of the cloud. Most of the existing definitions also imply some autonomic capability in which not only does the cloud scale up and down, but it does so without administrator intervention based on policies declared by the consumer. Personally, I like many of these aspects, so I have tried to combine the elements that I think are most important: Cloud computing provides computing resources in a scalable, autonomic, governable fashion. These resources may be software, application infrastructure, or physical infrastructure, and the overall solution enables IT to be delivered as a service.
Attempting to define the anatomy of cloud computing seems to elicit as many opinions as defining cloud computing. For me, the three-layer approach sums it up quite nicely. While it’s true that some cloud solutions span multiple layers, the Google App Engine comes to mind, it provides at least a reference point for the discussion of cloud products.
Looking at all three layers, it’s plain to see that starting with application services, each layer builds on the other. However, that does not mean that each layer cannot be used independently of the other. In fact, companies often construct on-ramp paths to cloud computing that start with services in only one of the layers (i.e. virtualization of hardware).
So, there's my shot at defining cloud computing! To be sure, my view of the cloud has evolved over time. The more opinions and thoughts I read, the more I challenge my own view. For that reason, I’d like to hear what you think. What is the definition and anatomy of your cloud?
Dustin Amrhein[Read More]