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You are here: Home / CIO Issues / Cloud Computing Definition Disputed
Definition of Cloud Computing Comes Under Fire
Definition of Cloud Computing Comes Under Fire
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Cloud computing is taking the IT industry by storm -- at least conceptually -- as companies from various sectors of the industry scramble to get on board the latest buzz bandwagon. The only problem is that the industry doesn't agree on what the cloud is.

Can we blame it on Google? Google CEO Eric Schmidt mentioned cloud computing back in 2006 and it seems companies have been rushing to roll out cloud-like services ever since. Indeed, virtualization firms, networking giants, and e-commerce legends, among others, are jumping into the cloud head first. Yet basic questions about cloud computing remain.

"I have no idea what anyone is talking about," Oracle CEO Larry Ellison told financial analysts at a conference last September about the cloud. "It's really just complete gibberish. What is it?"

Those come as surprising words from one of the most eminent figures in the world of high technology. But Ellison raised a good point: We need to define cloud computing -- and how much of an impact is it making on enterprise IT. Of course, the answer will depend on who you ask.

Analyst Firm Gartner Weighs In

Gartner defines cloud computing as "a style of computing where scalable and elastic IT capabilities are provided as a service to multiple customers using Internet technologies."

What does that mean? It means Gartner's definition includes advertising, e-commerce, payments, online HR services, and social-networking sites. That expanded view led Gartner to value cloud computing at $46 billion in 2008. The firm also predicts the cloud market will jump to $150 billion by 2013.

Recently though, Gartner's definition of the cloud has come under fire. John Treadway, principal of The Treadway Group, a technology consulting firm in Lexington, Mass., dared to challenge Gartner on its definition. In fact, Treadway adamantly insists Gartner is making a big mistake.

"If I define the cloud the way Gartner does, I could conceivably consider any Internet-delivered service as a cloud service," Treadway said. "That's not a helpful definition from the standpoint of the massive shift that's going to happen over the next 10 years in computing architecture. Gartner is diluting the term and making its figures irrelevant. Other experts don't defend Gartner's definition. Gartner is at odds with the industry."

Berkeley University's Cloud

It's true that Gartner is at odds with at least some in the industry. Like Treadway, the University of California, Berkeley, believes cloud computing will transform the IT industry within five to 10 years. But its researchers offer a definition of the cloud that differs from Gartner's. In a recently published white paper called "Above the Clouds: A Berkeley View of Cloud Computing," Berkeley offers its take.

"Cloud Computing refers to both the applications delivered as services over the Internet and the hardware and systems software in the data centers that provide those services. The services themselves have long been referred to as Software as a Service (SaaS), so we use that term. The data-center hardware and software is what we will call a Cloud. When a Cloud is made available in a pay-as-you-go manner to the public, we call it a Public Cloud; the service being sold is Utility Computing."

The Berkeley paper goes on to say, "We use the term Private Cloud to refer to internal data centers of a business or other organization that are not made available to the public. Thus, Cloud Computing is the sum of SaaS and Utility Computing, but does not normally include Private Clouds."

Gartner Research Director Lydia Leong doesn't dispute Berkeley's definition, but she does defend her firm's assessment. She points to the trend toward consumerization of IT as justification for including advertising in the $46 billion forecast. It's the advertiser, she argues, that often implicitly pays for the consumer's use of an IT service. Therefore, she said, advertising is a significant part of the cloud phenomenon even if it's not necessarily computing.

"From our perspective, cloud computing is an abstraction rather than particular products or services. It is a category that will impact IT significantly over the next 10 years," Leong said. "I would characterize the cloud market at this stage as being much like the beginnings of the PC market or the mobile market. It touches everything, the concept is growing, and it will become pervasive."

Who Should We Believe?

Scott Burns, CEO and cofounder of GovDelivery, a government-to-citizen SaaS communication solutions developer, agrees with Gartner's definition. Burns has been standing on his industry soapbox for the past two years proclaiming the error of defining cloud computing too narrowly. A narrow definition, he argues, misses the rapid evolution of the Internet over the past 10 years from static pages of information to value-added services.

"Google search itself is a cloud-based service. So is Facebook. So it Twitter. So is my online bill pay. If you include them all, my guess is that Gartner's estimate is low," Burns said. "Starting with a big number that makes clear that cloud computing is everywhere is a productive and accurate way to start. Businesses pay Gartner to break those numbers down further, but it's nice to see a major firm recognizing that there is nothing new or emergent about cloud computing... it's the primary use of the Internet and the dominant force in technology."

Other research firms contradict Gartner's forecast. Last year, Merrill Lynch estimated cloud-computing revenues would reach $160 billion by 2011. (Remember, Gartner predicts $150 billion by 2013. That would make Gartner's prediction low.) Meanwhile, IDC predicts cloud computing will reach $42 billion by 2012. (That would make Gartner's prediction terribly high.) Still, Gartner stands behind its numbers.

"You probably won't use our $46 billion figure to make any particular decisions about the cloud," Leong says. "But you probably will use the granular segment-by-segment definition and forecast to make a decision. In much the same way, you wouldn't use the size of the general IT market to the general hardware market to make a decision about where to invest. It's a broad umbrella."

Where Do We Draw the Line?

So what's the conclusion to be drawn? There is no conclusion just yet. Over time, the definition of cloud computing may become crystal clear, or at least less abstract. But today, the definition of cloud computing is still rather cloudy. No good definition has emerged as the final contender, according to Annie Shum, a vice president of BEA Systems and speaker and panel cochair at the recent MIT CIO Symposium in Boston.

"I don't really have a definitive view myself. I'm still trying to find something that is comprehensive but without being either too broad or too narrowly focused. I do distinguish between public cloud versus private cloud. The latter [the private cloud] is really what we talked about at BEA -- virtualized service-oriented liquid enterprises," Shum said. "To me, the current momentum and innovation in cloud computing is more aligned to the public cloud: The long-held vision of computing as a utility."

While there may not be agreement yet on how cloud computing should be defined, most experts expect the term and technology are here to stay.

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