marketspace envisioning the cloud

© 2008 Marketspace® LLC, A Monitor Group Company — CONFIDENTIAL — NOT FOR DISTRIBUTION© 2009 marketspace® LLC, a monitor group company – CONFIDENTIAL: NOT FOR DISTRIBUTION

Envisioning the Cloud:The Next Computing Paradigm and its Implications for Technology Policy

Google DC Talks The Newseum555 Pennsylvania AvenueWashington, DC

Jeffrey F. Rayport & Andrew HeywardMarketspace LLCA Monitor Group CompanyMarch 20, 2009

© 2008 Marketspace® LLC, A Monitor Group Company — CONFIDENTIAL — NOT FOR DISTRIBUTION 2www.marketspaceglobal.com

Overview

Every dozen or so years, a revolution changes the way we use computers. Huge mainframes in the 1960s, minicomputers in the 1970s, personal computers in the 1980s, cell phones and smartphones in the last decade, and now the emergence of cloud computing.

Understanding the Cloud

Benefits of the Cloud

Enabling the Cloud

Government and the Cloud

Concluding Thoughts


Seeding the Cloud

Mark Kryder

StorageStorage

Andy Grove

Connection SpeedConnection Speed

Gordon E. Moore

Processing PowerProcessing Power


Defining the Cloud

Cloud computing represents a new way to deploy computing technology to give users the ability to access, work on, share, and store information using the Internet. The cloud itself is a network of data centers – each composed of many thousands of computers working together – that can perform the functions of software on a personal or business computer by providing users access to powerful applications, platforms, and services delivered over the Internet.

Social Networks

Smartphones

Photo Sharing

Online Video

Online Music

Web-mail


Layers of the Cloud



Founded in 1999 declaring the “end of software”

Offered cloud-based version of CRM software

Became first cloud-based service to generate $1 billion in sales

Sells “on demand” contract and proposal management systems

Built a prototype in a “couple of weekends” using Salesforce’s Force.com platform – company profitable within nine months

Focused on customer needs, not development or infrastructure

Anytime Anywhere

Access

Anytime Anywhere

Access

Specialization & Customization

Specialization & Customization



CollaborationCollaboration

Storage as Universal Service

Storage as Universal Service

Held InnovationJam in 2006; world’s largest online brainstorm, designed to share IBM’s advanced research and technologies

Included over 150,000 participants from 104 countries

From concepts developed during sessions, IBM launched 10 new businesses with investments totaling $100 million

Digitized 150 years of archives, which comprised 11 million articles representing 1.5 terabytes of memory

Utilized Amazon’s Simple Storage Service (S3) to digitize complete archival content page by page in under 36 hours



Processing Power on Demand

Processing Power on Demand

Cost SavingsCost Savings

Provides web-based software for creating presentations using photos and music uploaded to the web

Increased traffic to 750,000 from 5,000 a day after a successful Facebook marketing campaign

Added capacity on Amazon Web Services infrastructure at a cost of 10 cents per server hour plus related expenses

Utilized Google Apps to provide Office-type productivity software for its workforce of over 16,000 people

Achieved estimated savings of $80 million by not building its own data center or hiring more engineers to manage it


Enabling the Cloud

In 2007, the United States ranked15th in the world in broadband penetration and 13th in overall Internet connectivity

If the United States falls short in universal access, cloud benefits will fall short, too

Open AccessOpen AccessUniversal ConnectivityUniversal Connectivity

“The point is that no one should be denied access to [online resources] because of who they are…. So this is a fairness issue more than anything else.”

- Vint Cerf, Chief Internet Evangelist, Google

This raises complex issues that emerged in the debate over “net neutrality,” and powerful commercial interests are at stake

Any barriers that restrict access to the Internet limit the potential of the cloud

“There will be 499 million in-home consumer broadband connections worldwide by 2012 – an extraordinary number, but it represents only 25% of the world’s households.” - Gartner Group


Enabling the Cloud

Interoperability and User ChoiceInteroperability and User ChoiceReliabilityReliability

Even best-known providers of cloud services fail from time to time – stiffening resistance of IT departments

Service that comes close to 100 percent reliability is a prerequisite for widespread adoption of cloud computing

“It is not just about being ‘always on’; it is this idea of reliability. If this is reliable, that’s a big thing. If it isn’t, then what do we turn to?”

- Kevin Kelly, Founder, Executive Editor, Wired Magazine

“If a customer doesn’t like our service, they can cancel.”

- Polly Sumner, President, Platform, Alliances, and Services, Salesforce.com

As of now the major players operate proprietary cloud infrastructures, with varying degrees of open standards

If large providers move to dominate with proprietary clouds, it will be difficult to realize the full potential of cloud computing


Enabling the Cloud

PrivacyPrivacySecuritySecurity

In the United States, the law treats personal information differently once it’s handed over to a third party

Cloud providers must protect user data from unauthorized government access and ensure integrity of commercial use

“The best medicine is accountability and transparency.”

- Dan Burton, Senior Vice President of Global Public Policy, Salesforce.com

Notion of making a third party responsible for keeping data safe continues to provoke debates in corporate IT departments

Cloud providers must demonstrate that data is safer than in current systems

“If we give this data to a cloud computing company, and there is a security breach or if that company gets sold, how do we address that? I am accountable.”

- Carolyn Lawson, Chief Information Officer, California Public Utilities Commission


Enabling the Cloud

SustainabilitySustainabilityEconomic ValueEconomic Value

The cloud is creating new business opportunities and new markets by offering high-end computing at lower cost

The real test will be for the cloud to reduce costs, increase productivity, and enable faster innovation at the enterprise level

“The classic challenge of addressing a new market is to do it at a lower cost, make things available where they could not previously be delivered, or remove complexity. The cloud can address all three of those.”

- Russ Daniels, VP and CTO of Cloud Services Strategy, HP

EPA estimates that by 2011, consolidating computing into data centers could reduce carbon dioxide emissions by 47M metric tons

As enterprises come under increasing pressure to go “green,” sustainability is critical to the viability of cloud computing

In 2006, data centers consumed 1.5% of all electricity used in the United States.

- Environmental Protection Agency


Government and the Cloud

Who Decides?

MarketPolicy

Universal Connectivity

Institutional Adoption

Cybercrime Enforcement

Privacy

Sustainability

Security

Reliability

Interoperability

Economic Value


Cloud Ecosystem

Device ManufacturersISPsMedia CompaniesData Centers


Living with the Cloud

Netbooks

Electronic Readers

Set-top Boxes

Music Players

Consumer Appliances

Medical Devices

Retail Touchpoints

Video Game Systems

Transportation Vehicles

Home Automation


The cloud is a reality for consumers and will become the “new normal” in corporations and organizations

The cloud is one avenue for the United States to re-assert economic and technology leadership on a global stage

What government can do best is clear the road for the cloud’s expansion, not pave it