The same dynamic applies to SaaS vs. conventional on-premise software -- paying as you go can be a lot more palatable than paying for servers and licensing fees up front, especially when it's dirt cheap. To take one example, Google Enterprise vice president Amit Singh recently told me that 5,000 businesses per day are signing up for Google apps, as opposed to 3,000 per day one year ago.
Marshaling the private cloud
It's worth noting that even if Bailey's wildest predictions turn out to be correct, spending on the public cloud would still amount to little more than 20 percent of global IT spending by 2014. The rest will be spent on customers' own IT infrastructure and personnel. In large IT operations, the private cloud -- born of technologies and techniques pioneered by public cloud providers -- will provide the path to new levels of efficiency and agility.
As InfoWorld's Matt Prigge observed in his post "How I learned to stop worrying and love the private cloud," pervasive server virtualization has created a crying need for software to manage pooled resources. So-called private cloud software addresses that need with many moving parts, including virtualization management, metering and chargeback systems, automated configuration, identity management, self-service provisioning, application management, and more.
Though far from complete, the OpenStack private cloud solution is compelling in part because it follows a Linux-like open source model. Today, under an Apache license, the OpenStack "kernel" has three components: Compute (for managing large networks of virtual machines), Object Storage (for massive storage clusters), and Image Service (for managing virtual disk images). Around that kernel -- as with Linux distros -- vendors add value. The leading commercialized version of OpenStack is Project Olympus from Citrix; startup vendors Internap, Nebula, and Piston Cloud Computing also use the OpenStack core.
Between its debut in October 2010 and today, OpenStack has already undergone four revisions. The fifth, code-named Essex and scheduled for release in spring 2012, will include two new components: Identity, for authentication and authorization, and Dashboard, a UI for managing OpenStack services.
But OpenStack is hardly the only game in town. Its best-known competitor is Eucalyptus, a private cloud implementation of Amazon Web Services that enables you to move workloads back and forth between Amazon EC2 and Eucalyptus (which also comes in an open source version). Then there's Puppet, a wildly popular configuration management framework designed to automate almost any repeatable task in the data center. Puppet can create fresh installs and monitor existing nodes; push out system images, as well as update and reconfigure them; and restart your services -- all unattended.
If you're willing to pay the licensing fees, you can even build an all-VMware private cloud. Virtualization is the underpinning of the private cloud -- and VMware still offers the most advanced virtualization management tools. In October 2011, VMware announced three new suites to "simplify and automate IT management," including vCenter Operations Management Suite (an update of vCenter Operations for monitoring infrastructure and managing configuration), vFabric Application Management Suite (mainly devops tools), and IT Business Management Suite (to report on operating expenses, services levels, and so on).