1. Private Cloud is In for Big Enterprises: Nicholas Carr
Though Private Cloud may ensure security and privacy, and is increasingly preferred by large
companies; eventually they will end up being operated only to meet legal or regulatory
requirements. Read Nicholas Carr’s Afterword to his bestseller The Big Switch: Rewiring the
World, from Edison to Google and know what’s new in the offering for the CIOs looking for
Cloud Computing Services with respect to their own vertical.
What may, over the next few years, represent the largest cloud-inspired area of investment
for large companies has little to do with the purchase of web based services from outside
utilities. Rather, it involves the construction of so called private clouds highly virtualized,
dedicated data centers that essentially serve as in house IT utilities. A private cloud can be
owned and operated by the company that uses it or, as is increasingly the case, it can be built
and run on the company‘s behalf by an outsourcing or hosting firm or other IT services
company. Because the transformation of traditional data centers into private clouds typically
requires substantial investments in new hardware and software, to facilitate high degrees of
virtualization and automation, their construction has been a boon to many IT vendors.
Deutsche Bank predicts that investments in private clouds will reach $20 billion in 2012.
The case for a private cloud is often compelling today. Because they typically have much
higher levels of capacity utilization and scalability than the traditional data centers they
replace, they can allow a company to gain many of the scale economies and speed and
flexibility benefits of the public cloud while avoiding the security concerns, contracting issues,
and other uncertainties that currently surround pure utility computing. Just as many large
manufacturers originally constructed their own in house electricity generating stations early in
the last century, so many large businesses today are building their own in-house clouds.
FedEx, a long-time IT pacesetter that relies on an array of custom applications to coordinate
time sensitive shipments around the globe, is in the process of moving to a private cloud. It is
in the midst of a major effort to retool its core apps to run on a standardized and highly
virtualized computing platform, drawing on a common data store as well as a shared set of
data services, such as the provision of a delivery address. As each app is updated, it is being
moved into a large new cloud data center the company has constructed in Colorado Springs.
FedEx CIO Rob Carter is convinced that the cloud model represents a fundamental
breakthrough in corporate IT. What's happening now, he recently told InformationWeek, is
there‘s truly a general purpose computing environment that‘s workload agnostic. You can
throw different kinds of workloads on the same computing server infrastructure. Despite the
significant data center and application investments entailed in building a private cloud, the
modernization effort is delivering a very high return on investment, according to Carter. For
the first time ever, he explains, you can make investments in a whole new class of technology
for about the same price of just maintaining the base.

2. It‘s important to recognize, however, that dedicated private clouds will in most cases be a
transitional technology, a stepping stone on the way to true multi tenant systems. At some
point, after all, private clouds will begin to pay diminishing returns; further gains will require
the greater scale that can only come from infrastructure and services that are shared among
many companies rather than within just one company. Even today, the divide between private
and public clouds can be blurry. It‘s possible, for instance, to operate a private cloud as a
virtual private data center or virtual private cloud a virtualized assembly of network, security,
storage, and compute resources that is dedicated to a single client but runs on a multi tenant
system. Just as most companies today are comfortable using virtual private networks to
ensure secure communication while gaining the scale benefits of shared infrastructure, they
may well come to embrace virtual private data centers quickly. In the long run, truly private
clouds may end up being operated only when required to meet legal or regulatory
requirements for security or privacy.
It is also likely that we‘ll see the emergence of vertical clouds clouds dedicated to particular
industries, or to groups of related government agencies or educational institutions, with
resources and performance standards geared to the unique needs of those industries. Bob
Rudy, the Avago CIO, has begun talks with other semiconductor CIOs in hopes of creating
vertical clouds in that industry. Sundeep Reddy, vice president and head of IT infrastructure at
Toys R Us, believes that vertical clouds may provide a way for retail firms to share custom IT
infrastructure while also giving them the leeway to maintain competitive differentiation in their
applications. It‘s also easy to see how specialized vertical clouds, providing the benefits of
multi tenancy while ensuring tighter controls than is possible with purely public clouds, could
be attractive to industries with unique data security requirements such as health care and
defense. Vertical clouds could also enable the efficient sharing of infrastructure and
applications among state governments, schools, nonprofits, and other organizations serving
similar constituencies.
However the tensions between dedicated and multi tenant resources and services play out,
one thing seems very clear: for the foreseeable future, most organizations will operate in a
hybrid IT environment, using some combination of traditional in-house IT resources, private or
virtual private clouds, vertical clouds, public clouds, and software-as-a-service applications.
Developing tools and processes for managing that hybrid environment and integrating diverse
sets of assets, services, and data stores will be a key challenge for IT departments, and a key
competitive battlefield for the IT industry. One area particularly ripe for innovation is the
creation of user interfaces and dashboards that allow companies to easily build, integrate,
and monitor complex virtualized systems that draw on the full set of cloud assets and
software-as-a-service offerings. HCL‘s MyCloud, HP‘s CloudSystem, BMC‘s Cloud Lifecycle
Management, and CA‘s AppLogic are examples of the kind of cloud management platforms
that could fundamentally change corporate IT operations, and further reshape the IT industry,
in the near future.

3. In addition to new tools for integrating and managing cloud services, the fulfillment of the
promise of cloud computing will require cloud providers to join together in adopting the kind of
clear, coherent, transparent, and measurable performance standards required to support
contracts, service level agreements, regulatory compliance, and interoperability. Much
progress remains to be made in this area. A 2010 study of current cloud computing contracts,
undertaken by the Cloud Legal Project at the Centre for Commercial Law Studies, Queen
Mary, University of London, revealed a lack of consistency in terms, and also indicated that
most cloud providers currently seek to avoid any warranty of service or acceptance of liability.
The World Economic Forum‘s cloud computing research group has underscored the need for
more consistent and comprehensive approaches to accountability for how cloud services are
provided as well as the establishment of clear standards for data portability and
interoperability across cloud services.
Competition among cloud providers may solve these problems, as those vendors that offer
the clearest terms and standards will likely gain a competitive advantage in the marketplace
forcing other providers to follow suit. But if the industry fails to address these critical issues,
governments may need to establish licensing or other certification programs for cloud
providers, guaranteeing a basic level of performance, reliability, and security. Establishing
and certifying minimum standards in such areas as privacy, intellectual property protection,
and data compatibility will be essential to the broad and accelerated adoption of cloud
computing in the future, argues R. Srikrishna, executive vice president and head of
infrastructure services at HCL.
An Excerpt from the Afterword
To read entire Afterword, visit http://cloudsrollin.com

4. About Nicholas G. Carr
Nicholas Carr (aka Nick) writes about technology, culture, and economics. His books have
been translated into more than 20 languages. Nick has been a columnist for The Guardian in
London and has written for The Atlantic, The New York Times, The Wall Street Journal,
Wired, and other periodicals. Nick is a member of the Encyclopedia Britannica's editorial
board of advisors, is on the steering board of the World Economic Forum's cloud computing
project, and writes the popular blog Rough Type. He is a sought-after speaker for academic
and corporate events. Earlier in his career, he was executive editor of the Harvard Business
Review. He holds a B.A. from Dartmouth College and an M.A., in English and American
Literature and Language, from Harvard University.
For more information, please visit http://cloudsrollin.com
About HCL ISD
HCL Technologies Infrastructure Services Division, also known as HCL ISD, falls in the
category of the 4 percent American new public companies that have crossed, or are set to
cross, the one billion revenue mark in the first 10 years of their inception. HCL ISD manages
mission critical environments and handles over 3 million devices for over 1.7 million end
users. The company’s clientele includes 20 percent of Fortune 100 organizations and has
over 250 customers, Fortune 1000 companies. The company's fast growth has attracted
several bestselling authors to include the HCL ISD case study in their bestsellers.
For more information, please visit www.hclisd.com