Data Centers

What's moving to cloud? Mostly startups and non-critical apps

The 2011 Future of Cloud Computing Survey was released this week at the Structure Conference. Get a look at the most interesting slides and the top comments from cloud leaders.

It won't surprise anyone to hear that established companies aren't moving their most important apps and data to the cloud -- at least not yet -- but, we got confirmation on that from some of the leading cloud vendors and some of the most progressive cloud adopters, who all gathered this week at the Structure Conference in San Francisco to talk about the state of the cloud.

On Wednesday, at a panel called The Future of Cloud Computing, a group of these cloud leaders were put on the spot to provide commentary on the unveiling of the 2011 Future of Cloud Computing Survey, a joint effort between North Bridge, GigaOM Pro, and 451 Group.

The top three points I came away with from the survey and the panelists were:

  1. Cloud computing is still in the first inning
  2. Most companies aren't moving their mission critical systems to the cloud
  3. The most enthusiastic cloud adopters are small businesses and startups

From left to right: Michael Skok, General Partner North Bridge Venture Partners, Lew Moorman, President, Rackspace Cloud, Dries Buytaert, CTO & Founder, Acquia (and head of Drupal), John Dillon, CEO, Engine Yard, Marten Mickos, CEO, Eucalyptus. Photo credit: Jason Hiner

The survey itself had over 400 respondents, mostly CEOs, C-level executives, and directors. Of the respondents, 32% were in large or medium companies and 68% were in small businesses (less than 100 employees).

Here are what I considered the five most interesting slides and data points:

1. Agility, scalability, and cost are top drivers

2. Security, compliance, lock-in are inhibitors

3. Cloud TCO is strong

4. Percentage of computing in the cloud

5. Impact of cloud on hiring


Here are some of the top quotes from the panelists:

  • Lew Moorman, President of Rackspace Cloud, said he's seeing a lot of startups and "new wave companies" building their whole business on the cloud
  • John Dillon, CEO of Engine Yard, said enterprises are highly interested in the cloud but still experimenting with secondary apps. "They're not ripping out SAP or Oracle and putting it in the cloud," he said.
  • Dries Buytaert, CTO of Acquia (and head of Drupal), said he has large enterprises and governments as cloud customers but added, "It's not their big backend systems."
  • Marten Mickos, CEO of Eucalyptus, gave an example of the speed and agility of the cloud. He reported a telecom that deployed the infrastructure needed for an SMS service in a matter of minutes using a Web-based portal. The process used to take weeks and a lot of coordination.
  • All of the panelists addressed the customer fear of vendor lock-in and the desire for a cloud standard -- OpenStack, Red Hat, and VMware are all pushing their platform as the standard -- but the panelists weren't optimistic that a common platform will emerge any time soon. Michael Skok, General Partner of North Bridge Venture Partners, added, "Open source and APIs does not mean standards."
  • The panel also addressed the fact that a lot of the cloud is being handled by business unit heads without the participation of IT. Dillion said, "Most [of them] hate the IT department because they can't get anything done." Skok added that the attitude he sees a lot is "The IT department can't do it, so we'll do an end-around."


Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the book, Follow the Geeks.


Our Charleston real estate firm has recently made the cloud transition mainly due to the added security this technology offers.


Hospitals, insurance agencies, and other businesses with remote employees are moving to a cloud solution for desktops and servers. It's safer for the company to have the desktop stored in the cloud and the remote user access it there, rather than leaving the full system with the employee to compromise it. The biggest thing will be making sure the IT team can stay on top of the cloud


The biggest Cloud roll-out I have heard of is Telstra Australia, they moved over 13 (from memory) critical back-end production systems to a Cloud service (Siebel) with MAJOR problems to start with. Even over 2 years on they still have major issues that the Cloud platform was supposed to resolve. I am a SaaS developer and we run a range of web apps for businesses, SME is our bread and butter, custom apps are a little extra cream on the top and from our business perspective the "big boys" can have their enterprise clients. Managing a mid-large Cloud infrastructure is bad enough without a GIGANTIC customer and ABSOLUTELY MASSIVE server clusters to worry about to boot. At the end of the day Cloud technologies have a long way to go but I think we're heading in the right direction.


Regarding startups. Here's a group of people who have no real legacy to support, so a new advantageous technology will meet much less resistance. For them the cloud also represents a way to cut the dollars needed for their startup capital. Finally, since it is a service and not a durable good, the use of the cloud is 100% deductible as a business expense as opposed to amortised over the 5 year anticipated life of the machine. Anyone else moving to the cloud is going to cautiously test the water with non-critical applications, then by duplicating in house services and migrating users over as a limited test. Finally, more and more users get migrated to the cloud until the migration is complete. I would expect to see people migrating production services on a test basis sometime next year and the full migration the year after. We are currently in the process of migrating production services and will be done by August of this year. So far, no glitches, though I can see where the bandwidth becomes a critical commodity, making the use of the cloud of questionable value for businesses and individuals in rural areas.

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