Wednesday, August 7, 2013

Snowden's Leaks -- Bad News for the Cloud?

According to Business Insider, Edward Snowden's leaking of National Security Agency (NSA) programs has signaled the end of the so-called "Cloud Bubble".

But was there ever a bubble to begin with? BI cites IBM's own admissions,

IBM used the word 14 times during its earnings call in July. “Cloud computing,” “cloud offerings,” “cloud infrastructure,” it was all there. Revenues from the cloud jumped 70% during the first half, IBM bragged – to cover up an ugly tidbit: overall revenues fell 3.3%, and revenues at its US hardware division, Systems and Technology group, plunged 12%.

Business Insider's Wolf Richter continues,

“Cloud computing you can trust,” is the motto on IBM’s Cloud site. Notwithstanding Edward Snowden’s revelations about the NSA’s unhampered access to data stored in the cloud. And it’s serious business: IBM blew $2 billion in July to acquire Softlayer Technologies, which it praised as “the world’s largest privately held cloud computing infrastructure company.” Whatever that means.

The cloud is also the big hope for another revenue-challenged high-tech hero, Oracle. Its cloud revenues were up 50%, screamed the headline on its earnings release for the fourth quarter, ended May 31, though overall revenues stagnated. In the prior quarter, revenues had dropped 1%, instead of rising, with hardware sales being an outright disaster. At the time, Oracle’s fearless leaders ridiculously blamed thousands of “new reps” for their “lack of urgency.” But the global cloud is where the action is for them.

Facebook, Amazon (its AWS hosts a number of big cloud-based websites, such as Netflix), Microsoft, Google... just about all tech companies, online retailers, social media companies, app makers, every company with online storage products, spreadsheets, calendars, collaboration tools, online data back-ups, photo-sharing sites, and what not, they’re all playing in the cloud. You log into a website to access software and your own data – that’s the cloud. In terms of hardware, it’s data centers and fiber-optic links. Thousands of them. Everywhere. Big Data takes place in the cloud. And the cloud is where the NSA goes to pick through everyone’s data.

Will government surveillance of so much private data cause a re-think of this model? I'm not sure. But I am skeptical there ever was anything besides normal growth for all things cloud. The internet itself *is* the Cloud -- from time immemorial the internet has been depicted as a cloud in architectural diagram, after all. With cloud architecture, servers and client apps can’t do everything. They are the engines for the software in between -- middleware -- that is the end reason the Cloud exists. Since the beginnings of the internet, the goal, IMHO, has been to break down the barriers between end users and the functionality they seek (be it computational power, data, or true information). And application hosting was the first step. For example, Bluedog's first offering was a version of our venerable product, Workbench, running as separate instances, connected to SAP R3 deployments -- the application service provider (ASP) model. But scaling and support for many customers made this approach untenable in the long run. The cloud aspect was there -- access complex software over the internet. But, as the architect of Workbench, I saw the need for a more balanced and flexible approach -- on that would allow much greater scalability when compared to the ASP model. Under my direction, the Bluedog team sought to support end users with direct access to a web-based applications running in a single stack -- all users and their data in one application. This cloud model enabled our customers to gain use of social collaboration tools without having to overhaul their entire infrastructure.
The scalability aspect of the cloud apply to more than just the multiple users, single database model – if the solutions in the cloud are structured correctly. Sometimes an organization will need to ramp up as future needs expand. Sometimes operations contract, entailing the dialing back of resource expenditures. In either case, change is much easier when using the cloud as the platform.

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