2011: When cloud computing shook the data center

In a year of surging private cloud activity and major build-outs in public cloud capacity, the cloud's promised simplification remains elusive

If I had to sum up in one word the most exciting thing that happened to cloud computing in 2011, I'd have to say it's OpenStack. This open source project, launched by Rackspace and NASA in late 2010, is assembling a private cloud "operating system" for the data center that promises vast increases in operational efficiency. The momentum behind it is phenomenal; at last count, 144 companies back the project, including Cisco, Citrix, Dell, HP, and Intel.

But at the same time, the public cloud is surging -- and not just Amazon and Salesforce, though those two remain the largest public cloud service providers. The telcos (notably Verizon) are gearing up to deliver IaaS (infrastructure as a service) at a larger scale than ever before. Microsoft, HP, and others are also building out huge public cloud capacities.

[ Download the Private Cloud Deep Dive by InfoWorld's Matt Prigge. | See the Test Center review: "Ruby clouds: Engine Yard vs. Heroku." | Download the Cloud Services Deep Dive by InfoWorld's David Linthicum. ]

On the one hand, with OpenStack, we have a vibrant, fast-growing open source project for creating private clouds, flanked by VMware, which offers a proprietary portfolio of private cloud software. On the other hand, we have an increasing number of businesses seriously asking, "Do I really want to run my own data center?" For those that don't, the public cloud is getting more attractive all the time.

Going public
During a recent visit to InfoWorld, Kerry Bailey, president of Terremark (now chief marketing officer for Verizon Enterprise Solutions), was exceptionally bullish in his predictions for public cloud growth. Acquired earlier this year by Verizon, Terremark operates a public cloud IaaS play that's 100-percent VMware -- the enterprise virtualization vendor of choice.

Bailey says Terremark has seen 178 percent growth in its cloud business from 2010 to 2011, with current revenues in the hundreds of millions. He also says that the No. 1 objection to the public cloud, security, has been replaced by performance -- which Terremark has addressed with proximity. According to Bailey, Terremark now has a physical presence "in all the NFL cities" in the United States. And thanks to Verizon, managed routing services enable "direct access to the backbones of the world's leading carriers" to ensure high quality of service.

Recent high levels of customer demand led Bailey to predict that IDC's estimate of cloud growth -- to $148 billion worldwide by 2014 -- may be missing the mark by several multiples. "Try $600 billion or even $750 billion," says Bailey.

Such aggressive numbers may be self-serving, but the ranks of public cloud boosters are growing. I recently spoke to Joe Coyle, CTO of Capgemini, who believes "the telcos are going to be huge" players in public cloud services. Moreover, he says, in some engagements he is "hard-pressed to come up with a reason to be in your own data center anymore."

In economic times like these, up-front cost is clearly a factor. Conventional wisdom says that sunk cost in infrastructure will prevent enterprises from migrating to the cloud. Who would simply abandon all that stuff? But that formulation changes when rack upon rack of servers reach the end of their useful lives. You can gear up for another major capital investment in hardware -- or turn to a public cloud service provider instead.

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