Wait, what are cloud services? What you need to know

As the cloud computing services market evolves, cloud service providers of all types are on a steep learning curve to change the IT services delivery model for enterprise customers. Find out who's playing in this market, what infrastructure is being deployed and the types of services being developed.

Understanding cloud computing services

"Cloud computing services" is the umbrella term for a growing number of virtual and managed technology services that have already split into cloud market sub-segments. It is nothing short of a paradigm shift in how IT services are delivered to organizations. The goal of a wide array of cloud service providers is to transition customers from a business model where they own and manage IT services themselves to a network-enabled, multi-tenant, usage-based, on-demand subscription model. And with that, enterprises can access applications, data, infrastructure or platforms via the provider's facilities.

For telecom operators in particular, cloud computing services have their roots in the applications services provider (ASP) market of the late 1990s, although the Internet has vastly changed their ability to deliver applications access over their networks. The cloud computing services market is in the early stages of development, and wild market hype has led to the creation of dozens of cloud computing definitions. Cloud computing technologies and services continue to evolve with solutions available from providers that include computer manufacturers like Dell and Fujitsu; systems integrators like Accenture, CapGemini and HP/EDS; IT management consultants like IBM; telecom carriers like AT&T, Orange Business Systems and Verizon Business; and a new breed of transitional IT service providers (ITSPs) that include Google's App Engine and Amazon's Elastic Compute Cloud (EC2) service.

The benefits for customers are expected to be about reduced cost (both CapEx and OpEx), flexibility, automated provisioning and energy efficiency thanks to leveraging economies of scale of the assets by the provider.

What you need to know about cloud computing service infrastructure

Cloud computing services are currently offered on three infrastructure types, with customers choosing the option within their comfort zone and budget, or a variety of options.

Public cloud: The original cloud computing model where a service provider offers resources over the Internet. These clouds are not on the customer's premises and may be located in the provider's' data center or collocation facility. Public cloud infrastructure is maintained by the cloud provider, not by the end users. Small and medium-sized businesses with less in-house infrastructure have largely been the early adopters of public cloud services, whereas large enterprises may test the public cloud with non-core business processes.

Private cloud: This option is usually designed and managed by an IT department within an enterprise or organization. This option offers internally hosted services behind a corporate firewall to specific authorized people. This "internal" or "corporate" cloud option appeals to enterprises that want to retain more control over their data than they can in a cloud service hosted by a third-party.

More cloud computing services resources

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Hybrid cloud: This option combines public and private cloud options and allows customers to manage some resources in-house and some externally through a third-party cloud provider. Many enterprises choose this option to keep sensitive data under their own control for security purposes.

Cloud computing services lead to secondary markets

Cloud computing services include the following subsets, with more options expected over time:

  • Software as a Service (SaaS): Applications are delivered over the network (usually the Internet) on a subscription and on-demand basis. Example: Software.com. This market is still in the early development stages with no clear market winners, although traditional telecom providers have less expertise to offer in this market than IT service providers.
  • Platform as a Service (PaaS): Operating systems, software development frameworks and associated services delivered over the Internet without downloads or installation. PaaS also supplies hosted development and testing environments for developing APIs.
  • Infrastructure as a Service (IaaS): Network, computing power and storage delivered to customers on a usage basis. Many telecom service providers are positioning themselves in this segment. Outside traditional telecom, Accenture formed an alliance with Cisco to enter the IaaS market. Market examples include: Verizon Business's Computing as a Service (CaaS), BT's Virtual Data Centre, AT&T Synaptic Hosting, and Amazon EC2.
  • XaaS: A collective term that can stand for anything or everything as a service, including the network and storage. For example, Security as a Service is another SaaS cloud service.

Why you need to know about cloud-based services

There is a disconnect between the hype surrounding the uptake of cloud-based services and the number of enterprises actually embracing the new business model. To make enterprises comfortable enough to make the move, cloud providers must be ready to address any issue that enterprises see as negative compared with owning and managing their own hardware, software and network facilities.

Traditional telecom service providers have an advantage and expertise that comes from owning a network, but they also have to embrace IT services including the security and regulatory compliance aspects. While companies like Amazon may have excellent cloud services, they also have to be able to guarantee network access, end-to-end security, service level agreements (SLAs) and Quality of Service even though they don't own the network.

The need to provide seamless end-to-end cloud services that cross networking and IT expertise may lead providers to partner with one other in order to be more credible with enterprises rather than trying to do it all themselves. Each type of provider in the emerging cloud business has its own core competency, but no matter what, providing enterprise-class controls is an across-the-board requirement so customers have the right tools to monitor and manage resources in cloud environments.

According to Current Analysis Managed IT Services analyst Dustin Kehoe, enterprises will start moving to a cloud environment in clearly defined phases only where they can measure each step with hard metrics like return on investment (ROI), total cost of ownership (TCO), lower energy costs and increased utilization. Enterprises will probably take a cautious approach and move applications and infrastructure to the cloud in pieces. If cloud services have cost savings, providers need to be able to quantify savings for customers, not just go with a general one-third to one-half savings over in-house costs.

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