April 2010
By David C. Wyld

David C. Wyld is a Robert Maurin Professor of Management at Southeastern Louisiana University.


A global look at cloud computing

We have seen revolutionary computing technologies come about roughly once each decade in the modern era of computing since around 1945, when computing came to mean computations performed by a machine, not by man. From the mainframe era of the 1960s to the advent of minicomputers in the 1970s, the personal computer (PC) in the 1980s, the growth of the internet and the web in the 1990s, and the explosion of cell phones and other smart, web-connected devices in the past ten years, computing has been reinvented in many ways over time.

Cloud computing certainly seems to be the phrase du jour in much of the computing world today, and many experts now think that cloud computing will be “the next big thing.” Indeed, Gartner, the world’s leading IT research company, believes that in the end, the impact of the cloud model will be “no less influential than e-business.” Thus, it should not be surprising that in an October 2009 survey of IT executives conducted by CIO Research, cloud computing was the number one subject of interest among an international panel of information technology decisionmakers.

What is cloud computing? Cloud computing encompasses a whole range of services and can be hosted in a variety of manners (Table 1), depending on the nature of the service involved and the data/security needs of the contracting organization. However, the basic idea behind the cloud model is that anything that could be done in computing — whether on an individual PC or in a corporate data center — from storing data to collaborating on documents or crunching numbers on large data sets can be shifted to the cloud. Certainly, cloud computing enables a new platform and location-independent perspective on how we communicate, collaborate and work. So long as you can access the web, you are able to work when and where you wish. With fast, reliable internet connectivity and computer power, it does not matter where the document, the e-mail or the data the user sees on the screen comes from. Cloud computing enables providers to use distant data centers for cloud computing. Still, while some have predicted the end of the PC era with the rise of the cloud computing model, many believe that most organizations and even individuals will continue to make use of traditional PCs and laptops, even if more and more of their use will be to access the cloud.

For individuals, cloud computing means accessing web-based e-mail, photo sharing and productivity software, much of it for free. For organizations, shifting to the cloud means having the ability to contract for computing services on-demand rather than having to invest to host all the necessary hardware, software and support personnel necessary to provide a given level of services. And for governments, the value proposition of the cloud is especially appealing, given both changing demands for IT and challenging economic conditions.

Today, we are seeing the implementations of cloud computing across the public sector all around the world. In the United States, there have been early efforts at shifting IT to the cloud across the US federal government, led by the country’s first chief information officer (CIO), Vivek Kundra. The CIO is attempting to institute massive strategic changes, both in mindsets and operations, in the federal information technology area.

Indeed, Kundra believes that cloud computing represents a “tectonic shift” in computing technology, according to Scott Campbell in “Federal CIO: Government Needs to Rethink Technology for 21st Century.” Kundra has predicted that ultimately, “the cloud will do for government what the internet did in the ’90s,” according to Gautham Nagesh’s article “Agencies predicted to move to cloud computing cautiously.” In mid-September 2009, Kundra announced the opening of the Apps.gov storefront (viewable at www.apps.gov), operated by the General Services Administration (GSA). Through Apps.gov, Kundra hopes to make it as easy for federal agencies to provision cloud services ranging from hundreds to millions of dollars in cost as easy as commercial buyers using cloud services from major cloud providers such as Amazon.com and Google, Inc., who may eventually become providers to the US government. We will also likely see more vendors create government-specific cloud computing products for equipping public sector computers with much of the functionality that today resides on individual machines and agency servers, following the lead of Google, which in September 2009 announced a version of Google Apps that will be specifically geared for US federal agencies.

Cloud computing in European governments

The UK government has re-cently created the “G-cloud,” which is to be a government-wide cloud computing network. It has been targeted as a strategic priority. Issued jointly in June 2009 by the Department for Business Innovation & Skills and the Department for Culture, Media and Sport, the Digital Britain Report calls for the UK government to take the lead in a wide-ranging digital strategy for the country. As Prime Minister Gordon Brown announced in the issuance of the report, “Digital Britain is about giving the country the tools to succeed and lead the way in the economy of the future.”

An important aspect of the Digital Britain strategy is to improve government IT and allow for more services to migrate online. To support this action, the UK’s IT procurement efforts will be focused on enabling the government to become a leading force in the use of cloud computing. The report states that “the Government’s impact on the digital economy goes way beyond its role as policy maker. In delivering public services, as a large customer of ICT products and services and as the owner of data systems, the public sector has enormous influence on the market. In many areas, such as education, health and defence, Government can use its position as the leading procurer of services, to drive up standards — in some cases to set standards — and to provide an investment framework for research and development.” The Digital Britain team from both cabinet offices has an official forum, where interested parties can learn more about the plan and comment on it at http://digitalbritainforum.org.uk

There have been other cloud computing efforts initiated in Europe as well, though none approaching the ambitious scale of the Digital Britain project. Oleg Petrov of the World Bank’s Government Transformation Initiative recently completed a project cataloging active cloud computing initiatives in countries around the world. In Europe, he identified cloud efforts under way specifically in Sweden, France and Spain. He found that in addition to setting up internal, private cloud environments (as Spain is presently working on), European nations were beginning to explore the use of cloud-based computing in the following areas:

  • public sector housing management
  • transportation service networks
  • economic development
  • census
  • health services
  • contracting
  • education services

Likewise, in Denmark, the National IT and Telecom Agency has recently released the results of a pilot effort in which two of its systems, Digitalisér.dk and NemHandel, were shifted from a traditional in-house environment to cloud hosting. The agency reported both significant cost and energy savings through the effort. Presently, the National IT and Telecom Agency is working with Local Government Denmark, a voluntary association consisting of all 98 Danish municipalities, to explore using cloud computing as part of its national and local IT strategies.

On the European Union (EU)-wide level, we will likely see emerging cooperation of member states on an EU-wide cloud computing effort, which analysts say could well lead towards the creation of a cloud-based, common infrastructure for IT in member states. With many of the same pressures and forces operating on EU governments as in the United States, we will likely see just as many — if not more — cooperative efforts and innovative experiments in cloud computing on the national and even transnational level in Europe.

Cloud computing in Asia

In Japan, the national government is undertaking a major cloud computing initiative, dubbed the Kasumigaseki Cloud — named for the section of Tokyo where many Japanese government ministerial offices are located and which means fort of fog. The initiative seeks to develop a private cloud environment that would eventually host all of the government’s computing. The Kasumigaseki Cloud will allow for greater information and resource sharing and promote more standardization and consolidation in the government’s IT resources, according to Japan’s Ministry of Internal Affairs and Communications.

By consolidating all governmental IT under a single cloud infrastructure, the Japanese government believes it will see not just reduced costs and operational benefits, but more “green,” environmentally-friendly IT operations. The Kasumigaseki Cloud is part of the Digital Japan Creation Project. This represents a governmental effort aimed at using IT investments — valued at just under 100 trillion yen — to help spur economic recovery by creating several hundred thousand new IT jobs in the next few years and doubling the size of Japan’s IT market by 2020.

Cloud efforts in China have thus far been spearheaded by local leaders. The city of Dongying in the northern region of the country is undertaking a cloud computing initiative aimed at improving not only its e-government offerings, but economic development, leading the effort to create what is known as the Yellow River Delta Cloud Computing Center. The vice mayor of Dongying, Li Jinkun, envisions that Dongying can become a “city of digital innovation” through the IBM-developed cloud platform that is at the heart of this initiative. Likewise, in the city of Wuxi, located in southeastern China, the municipal government has set up a “cloud services factory” to improve the computing resources available to local companies.

The many start-up firms in the city’s “software park” faced a common problem of not having the financial resources to acquire the IT infrastructure necessary to compete effectively. In response to this need and to attract more firms to its economic development project, the government of Wuxi worked with IBM to build a cloud computing center. Using the cloud services factory, software developers can readily access the computer resources they require for projects. Participating firms have a ready-made, on-demand computing infrastructure, freeing financial resources for other needs and making the start-ups more likely to thrive and create new economic wealth and jobs in the city.

IBM is also working with the Vietnamese government and universities to help the country leverage the power of cloud computing across the public and private sectors of this rapidly changing, formerly agrarian economy. As Willy Chiu of IBM Cloud Labs recently observed, the country’s commitment to the new model is due to the fact that “the government views cloud computing as a way to move to a services-lead [sic] economy.”

The Government Information Technology Service (GITS) of Thailand is establishing a private cloud for use by Thai government agencies. GITS has already established a cloud-based e-mail service, and it plans to add software-as-a-service offerings in the near future. GITS believes that such consolidation will improve service offerings for government agencies, while simultaneously cutting their overall IT costs “considerably.”

Managing IT in the clouds

Today, we are in a transitional stage in the history of computing. Cloud computing appears to be poised for rapid growth in the personal, corporate and governmental realms. Indeed, developments and expectations in the consumer realm are becoming drivers of what can and what is expected to be done in both public and private sector organizations. Kundra, discussing his decision to emphasize greater use of cloud technologies in C.G. Lynch’s “How Vivek Kundra Fought Government Waste One Google App at a Time,” recently stated, “When employees go home, they have access to more technology at home than they do at work. I said ‘wait a minute, people have this access at home, how can I bring it to the government?’ It made a compelling reason for us to move that direction.”

IT leaders should recognize that there are eight fundamental elements that are vital in enabling the cloud computing concept (Figure 2). For the cloud model to work in the public or private sector, it is essential that there be:

  • universal connectivity — users must have near-ubiquitous access to the internet
  • open access — users must have fair, nondiscriminatory access to the internet
  • reliability — the cloud must function at levels equal to or better than current standalone systems
  • interoperability and user choice — users must be able to move among cloud platforms
  • security — users’ data must be safe
  • privacy — users’ rights to their data must be clearly defined and protected
  • economic value — the cloud must deliver tangible savings and benefits
  • sustainability — the cloud must raise energy efficiency and reduce ecological impact.   

Many issues remain to be worked out from a technology standpoint. Yet it is highly likely that as with other major tech-nological changes, the most important issues to be resolved will be people-based, not tech-based. Resistance to cloud computing from end-users is likely to be limited so long as they can count on the same type of IT resources as they have had in the past. As Joab Jackson put it, the key metric for them will be: “When I sit down at that computer, do I see the functionality I need?”

There will undoubtedly however be some resistance among the IT workforce to the advent of cloud computing. Traditional IT staffers are likely to be the most resistant, while those with experience with web development are likely to be supportive of cloud efforts. However, the rising generation in the IT workforce — comfortable in their use of and reliance upon a whole host of web-based tools and services — will be more willing to shift operations and data to the cloud than will be the current generation of IT decisionmakers. They will likely see their older colleagues’ concerns about reliability and security issues regarding the use of cloud computing as exaggerated and quaint.

Many in IT may also perceive the shift as not just changing what they do in their jobs, but as a threat to their very jobs. Martha Dorris, Deputy Associate Administrator for the GSA’s Office of Citizen Services in the US federal government, commented in an article by Steve Towns that the biggest issue in her agency’s changeover to a cloud-based platform was that “our technology team did not want to give up the servers.” She observed that in the end “this isn’t a story about technology. It’s a story of culture.” As we have seen with so many technological shifts that have previously occurred, it is essential to gain cultural buy-in from employees to get them to do something different, as it is absolutely essential for cultural change to accompany the technology shift.

Indeed, many in IT will have to overcome their fear of data and applications not residing within their realm of control within their own four walls. Many IT professionals are growing more receptive to the concept overall, as these cloud computing tools may in fact make their jobs better by freeing them from the “day-to-day hassles” of maintaining software. Certainly, the nature of IT jobs and the skills required to perform them will change markedly over the next decade. There will be less manual work needed internally, both in data centers (“racking and stacking”) and in the field (doing installations and upgrades). At the same time, there will be a greater emphasis on the negotiation, conceptual and people skills needed to manage contracted cloud services. Indeed, in the near future, there will be a great need for developing expertise in specifying, negotiating and managing service-level and organizational agreements. On the executive level, the shift to greater use of cloud computing will enable IT managers to be able to focus on how to best deliver services, rather than where they are hosted or how they are implemented. This will, of necessity, lead to changes in how IT and IT managers are evaluated for their performance.

How will this impact IT employment overall? Cloud computing will undoubtedly create jobs in the near-term. Yet over the next decade, there will be both new companies and new jobs emerging in the area of cloud services, countered by a significant displacement of many of the “nuts and bolts” technology jobs in IT — doing “hands-on” work in maintenance, upgrades and the like internally for organizations. Overall, the technical skills needed for IT jobs will likely decrease, as many jobs in the field become more administrative in nature, such as overseeing contracts and handling customer inquiries. Some have referred to this as a shift away from “blue-collar” IT jobs and careers towards a more “white-collar” IT workforce.

While IT has certainly seen platform transitions before, from mainframe to Windows to the web, the fact is that “human capital is the most difficult kind to upgrade,” according to Bernard Golden. Thus, at a time when cloud computing is emerging so quickly, it will be difficult to train IT professionals on cloud technologies and then retain them. This will require retraining many present IT workers, and those jobs that are found with cloud providers will indeed be away from “traditional” tech centers and major cities and more located in the rural, power-friendly areas where major cloud data centers will tend to be more commonly located.

Indeed, some European governments and companies have expressed concern about working with US-based cloud computing providers out of concern that their data — housed at least partially on US soil — could be subject to US governmental review due to the provisions of the Patriot Act. And in order to encourage economic development, national and regional governments may require cloud providers to either manage operations in government data centers or to even locate data centers within their jurisdictions so that the money and jobs stay in their own local area! Thus, cloud computing may indeed be a way to promote growth in areas that have a properly trained IT workforce, cheap electrical power and reliable connectivity. This will occur in developed nations for now, but eventually, as we have seen in other aspects of technology, such operations and their jobs will likely migrate from the first to the third world over time, so long as the internet and security concerns are addressed.

As government executives consider the move to cloud environments, they must weigh the potential savings, increased collaborative capabilities and operational advantages with the security, reliability, and privacy concerns that “cloud” the overall outlook for cloud computing. Still, cloud computing represents a revolutionary change in the way computing power will be used and procured, and as such, it will have significant impact both in the developed world and in developing nations.