VMware held its annual VMworld conference in San Francisco last week. By far the most important announcement it made there was about the release of its previously promised vCloud API, and initial support for the API from service providers. This is part of VMwares plan to rectify its currently limited presence in the cloud.
For now, elasticity is the game
Virtual servers are portable and easy to create. These are virtualisations biggest benefits for servers, and so far they have been exploited almost entirely inside customers data centres. But in the long term they could transform IT by allowing businesses to extend their operations into the cloud by renting virtual servers from service providers.
The immediate advantages of this external capacity are that it is elastic and can be accessed immediately. But only a minority of businesses strongly need this elasticity: those that suffer seasonal or unpredictable load spikes, or start-ups that cannot afford to buy IT capacity upfront and need predictable scaling costs. Another major use is for the heavy but temporary workload of code testing.
Most businesses have already invested in their own IT systems and deal with predictable application loads. For these customers, the most important and still unanswered questions about the cloud are whether it will be cheaper than on-premise computing, and whether it will meet their security and service-level needs. Many industry players reckon that the answer to those questions will be yes. For those suppliers, elastic compute services represent the first stage of persuading their customers into the cloud.
The elastic cloud is a wisp
Currently the biggest and most influential provider of on-demand computing services is Amazon. This must be humbling for IT giants such as IBM that have cloud ambitions. A big consolation for them is that the battle has barely begun.
Amazon does not say how much revenue it earns from its Amazon Web Services, but it is likely to be around $200300 million this year, judging by the booksellers filings to the US Securities and Exchange Commission. That is small beer. As a comparison, the IT services market pulled in revenues of around $800 billion last year. Amazon is part of a fleet of suppliers of on-demand computing power, but it is by far the largest among them.
Cloud management interfaces will influence the data centre
If raw cloud computing does become popular, there will be a market for virtualisation software to sell to service providers. What they use as a platform will also influence on-premise buying decisions. If youre virtualising your own data centre and also expect to rent capacity in the cloud, youll want compatibility between the two. Virtual server management standards are in development, but it is not clear how well they will work, or how soon.
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