In an article published Friday I wrote about cloud computing in the corporate world — its slow embrace so far, despite all the marketing hype, and signs that the pace may be picking up.
But in the business market, cloud computing — computer resources and services delivered remotely — will progress at a rate largely shaped by two constituencies: the customers and the major software companies.
The big software suppliers, including I.B.M., Microsoft and Oracle, have all hopped on the cloud bandwagon, but with a twist.
They talk of the cloud transforming the distribution of software, but not much about its potential to upend the economics of the traditional corporate software business. These companies have huge software businesses, relying on large annual sales contracts, licensing and subscription fees, and maintenance charges.
To their customers, the established companies say they offer a safe bridge to the promising yet uncertain world of cloud computing. They are particularly enthusiastic about “private” clouds, which are built inside the data centers of corporate customers but using more efficient cloud software, which companies like I.B.M., Microsoft and others sell on conventional terms.
“The first step most companies are taking is to private clouds,” said Robert Wahbe, a vice president of Microsoft’s server and tools division.
The insurgents in the cloud market, led by Amazon, see private clouds as mainly a means of account control for software’s old guard, holding onto customers and high profit margins.
“Private clouds are essentially the same thing that large, established companies have offered for years as managed services,” said Adam Selipsky, vice president of product management and developer relations for Amazon Web Services, its cloud unit. “It amounts to a rebranding.”
Perhaps, but many customers do find moving toward the underlying cloud technology a big money-saver, even in a private cloud setting.
The University of Pittsburgh Medical Center, an $8 billion-a-year enterprise with 4,000 physicians, 20 hospitals and nearly 50,000 employees, has moved much of its computing chores to a private cloud in the last few years.
The efficiency gains are evident, so much so that the center canceled a previous plan to build a new $80 million data center. “We don’t need it now,” said Paul Sikora, vice president of technology services.
In the next few years, Mr. Sikora said, he could see moving the medical center’s e-mail system to an outside cloud services provider. But his concerns about the security and privacy of data held outside the walls of his data center make electronic patient records and payroll systems off-limits for now.
“The economics are compelling, but you give up a lot of control,” he said.
Paul Maritz is chief executive of VMware, a leading supplier of the software that makes it possible to share computing resources in data centers more efficiently and flexibly than in the past, opening the door to the cloud.
“In the long run, companies want to get out of the digital plumbing business, so they can focus on what really differentiates them from competitors,” Mr. Maritz said. “But that has not really played out yet.”
But in the business market, cloud computing — computer resources and services delivered remotely — will progress at a rate largely shaped by two constituencies: the customers and the major software companies.
The big software suppliers, including I.B.M., Microsoft and Oracle, have all hopped on the cloud bandwagon, but with a twist.
They talk of the cloud transforming the distribution of software, but not much about its potential to upend the economics of the traditional corporate software business. These companies have huge software businesses, relying on large annual sales contracts, licensing and subscription fees, and maintenance charges.
To their customers, the established companies say they offer a safe bridge to the promising yet uncertain world of cloud computing. They are particularly enthusiastic about “private” clouds, which are built inside the data centers of corporate customers but using more efficient cloud software, which companies like I.B.M., Microsoft and others sell on conventional terms.
“The first step most companies are taking is to private clouds,” said Robert Wahbe, a vice president of Microsoft’s server and tools division.
The insurgents in the cloud market, led by Amazon, see private clouds as mainly a means of account control for software’s old guard, holding onto customers and high profit margins.
“Private clouds are essentially the same thing that large, established companies have offered for years as managed services,” said Adam Selipsky, vice president of product management and developer relations for Amazon Web Services, its cloud unit. “It amounts to a rebranding.”
Perhaps, but many customers do find moving toward the underlying cloud technology a big money-saver, even in a private cloud setting.
The University of Pittsburgh Medical Center, an $8 billion-a-year enterprise with 4,000 physicians, 20 hospitals and nearly 50,000 employees, has moved much of its computing chores to a private cloud in the last few years.
The efficiency gains are evident, so much so that the center canceled a previous plan to build a new $80 million data center. “We don’t need it now,” said Paul Sikora, vice president of technology services.
In the next few years, Mr. Sikora said, he could see moving the medical center’s e-mail system to an outside cloud services provider. But his concerns about the security and privacy of data held outside the walls of his data center make electronic patient records and payroll systems off-limits for now.
“The economics are compelling, but you give up a lot of control,” he said.
Paul Maritz is chief executive of VMware, a leading supplier of the software that makes it possible to share computing resources in data centers more efficiently and flexibly than in the past, opening the door to the cloud.
“In the long run, companies want to get out of the digital plumbing business, so they can focus on what really differentiates them from competitors,” Mr. Maritz said. “But that has not really played out yet.”
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