How the Cloud Changes Enterprise Tech

At today's Bloomberg Enterprise Technology Summit, there was a lot of discussion about moving to the cloud and how that impacts businesses and the IT infrastructure that supports it. Many of the newer companies and vendors are convinced that almost everything should move to the cloud quickly, but older organizations were clear that many legacy applications will remain either on-premises or in "private clouds" for a very long time.

Everything Moves to the Cloud

Google's Benjamin Fried, MongoDB's Dwight Merriman, Scott Weiss of Andreessen Horowitz, and Cory Johns

Benjamin Fried, Google's Chief Information Officer, talked about how organizations now need to adapt to enterprise technology in a world where PaaS and SaaS are dominant. "No one starting from a clean slate would do anything other than SaaS if they could," he said, believing that platform-as-a-Service (PaaS) and SaaS are inevitable.

One big change Fried talked about deals with security, saying that with such services, effectively there is no corporate network, and you shouldn't trust any network more than the Internet. Google has internally been using the idea of "zero trust" networks for a year and a half.

Andreessen Horowitz partner Scott Weiss said the top five enterprise vendors all look vulnerable. The combination of mobile SaaS and cloud infrastructure is shaking the foundations of IBM, Oracle, SAP, and HP, he said. Weiss predicted that the big public cloud players, particularly Google and Amazon, will "wipe out" the private cloud and data center model. Facebook and Google are pioneering data center capacity (with Amazon just a fast follower) and even the big Software-as-a-Service companies are not architected for a public cloud model and don't have good mobile solutions. "The world will have to get on the public cloud cost center or die," he said.

Fried said the same thing is true for corporate applications. He has 86 enterprise applications running on AppEngine, but has zero system administrators and spends no time worrying about scaling. He said the future was building on deeply integrated, economy-of-scale data center economics.

But Weiss said large enterprises have a way to go, in part because "Google and Amazon don't speak enterprise," as compared with companies such as Oracle and IBM. He said that eventually all internal enterprise applications will go mobile "and they haven't really started."

Tech Providers Moving to Cloud 2.0

Infor's Duncan Angove, Rackspace's Mark Roenigk, Kirsten Wolberg of PayPal, and Felix Gillette of Bloo

A number of technology providers also discussed moving to the cloud.

Mark Roenigk, COO of Rackspace, said his company was mostly a service company, not a technology company. Many companies are not DIY companies, so they need help, which he said Rackspace could provide. In particular, he talked about building an infrastructure on top of OpenStack.

Kirsten Wolberg, Vice President of Technology Business Operations of PayPal, said the company runs on its own "private cloud" and now has about 20 percent of its infrastructure running on OpenStack. She said the company has moved to the cloud for agility, and as a result has been able to introduce 56 new products over past 12 months instead of 1-2 a year.

Perhaps the biggest change has come from Infor, which has moved its entire application stack to open source software, and now offers its products both on-premises and as a cloud service, hosted on Amazon Web Services, according to company president Duncan Angove. (Infor is actually one of the largest makers of business-specific software, with $3 billion in revenue and 70,000 customers. The new stack uses things like Linux, PostgreSQL, JBoss, and Node.JS.)

He said the company has seen dramatic cost savings in going to an open source stack, and said that brands like Ferrari and Boeing are now moving ERP systems to run on open source.

Roenigk said many of Rackspace's customers were running internal ERP on a dedicated environment; customer-facing environments on a private cloud; and using the public cloud for "burstability." Clouds can be very expensive. One big goal, he said, is to build security into their application rather than completely depend on their environments.

Angove said that customers are beginning to understand that cloud providers offer more security than a typical on-premises solution, noting that the CIA has signed a $600 million contract with AWS. He said a lot of companies struggle to keep up with all of the changing regulations in their own data centers, but this was built into the cloud infrastructure. As a result, he said, even many hospitals are running everything in the public cloud.

A CIO View of the Cloud

ADP's Mike Capone, Kaplan's Edward Hanapole, Xerox's Stephen Little, and Diane Brady of Bloomberg Bus

Another panel involved more large customers, and in general, this group had a wide variety of views about what things would be kept within a company's data center as compared with in the cloud. For instance, Mike Capone, Corporate Vice President of Product Development and Chief Information Officer for ADP, noted the company was both a cloud provider and a consumer. He said that for client data, ADP keeps all of the client data it hosts in its own data centers, but for everything else, ADP uses the public cloud.

Edward L. Hanapole, Chief Information Officer at Kaplan Inc., said he had a "no IT mentality" around the enterprise technology, saying he wants to get as much technology from third parties as possible. Kaplan moved 20,000 employees to Google and Hanapole said it was a natural experience.

At Xerox, Chief Information Officer Stephen Little said he was trying to drive global efficiencies by working to rationalize its environment (for instance, the company has 12 billing systems). But it is mostly focused on private, not public, cloud solutions, he said, noting the company has 140 applications that need to be PCI compliant, and others that store HIPPA data.

"I struggle with value proposition of the public cloud," Little said, citing Xerox's enormous roadmap of technology.

Hanapole agreed that unlike an application like Facebook, "the enterprise isn't that simple." He noted that it was flexibility, more than cost that drives public cloud adoption, and that getting buy-in from the business is crucial. "You need to choose your pace," he said.

One issue is that new regulations designed to protect information are actually getting in the way, the panelists agreed. Capone noted that ADP has a data center in Europe to deal with privacy laws there, but noted that we're now seeing different regulations in different states in the U.S. to the point that it is getting ridiculous.

Overall, enterprise IT departments need to partner with the business to let them know what's possible with technology, Hanapole said, rather than creating all the technology itself. "We need to pivot," he said, believing that IT leaders "need to embrace the changes in technology and be the thought leader within the company."

Little agreed, saying that IT has a perspective on the business that no one else has, as it sees across the whole business. We are "partnering with people to develop business strategies using IT as an enabler," he said.

Different Kinds of Clouds

Verne Global's Tate Cantrell, Verizon Terremark's John Considine, and Sunil Khandekar of Nuage Network

In a discussion on data center strategies, a number of big hardware and data center providers offered different ideas on the kind of clouds: private, public, and hybrid.

Jay Kidd, Chief Technology Officer of NetApp, said it was a false question, because there will be lots of different types of cloud providers. "We're just at the start of this game," he said. He expected there will be vertically oriented clouds aimed at particular markets, which will be a hybrid of infrastructure and SaaS providers. Tate Cantrell, Chief Technology Officer of Iceland data center provider Verne Global, agreed on the need for vertical market solutions.

John Considine, Chief Technology Officer of Verizon Terremark, said he thought the public cloud would win out in the long run, as private clouds, almost by definition, will either be too big or too small. Sunil Khandekar, Founder and CEO of Nuage Networks, said that initially, anything that moves top or bottom line stays inside in private cloud, but other things move to the public cloud. But what he really wants is for a provider to make it so that you don't have to worry about compliance rules in both public and private clouds.