Future of the Cloud: Cloud Platform APIs are the Business of Computing

Future of the Cloud:
Cloud Platform APIs are the
Business of Computing

Written by Mike Kirkwood

Sponsored by

Contents
Sponsor Message from Intel & VMware 2

Executive Summary 4
Open APIs: The Marketplace of the Cloud Economy 5
Coding for Clouds: Build and go everywhere 6
Security at the Endpoints 6
Real-Time Data Distribution 7
Ghosting the Social Graph 7
Summary 8

Clouds of many shapes and sizes 9
The Infrastructure Clouds 10
The App Store Cloud 11
The Enterprise Cloud 12
The App Hosting Clouds 15
Clouds Can be secure (just add water) 16
The Distributed-Data Cloud 18
On-Premises Clouds 20
The Identity Cloud: Us as a Service 21

Conclusions 23

ReadWriteWeb | Future of the Cloud | 1

snapshot

Opus InteractIve | pOwered clOud cOmputIng enables
superIOr servIce
The Foundation of Virtualization

Opus Interactive (Opus) is a leading managed services provider based in Portland,
Oregon. The company manages its own state-of-the-art data center and continues
to invest in best-of-breed technologies to ensure that it can accommodate any
mission-critical hosting need.

Using a combination of VMware and Intel technologies as the foundation for its
datacenter allows Opus to provide a flexible pool of resources for its customers.
“Virtualization means that we can spin up additional resources for our customers
at the drop of a hat to meet their needs,” says Jeremy Sherwood, strategic account
manager at Opus. “The time and cost savings versus having to deploy rack-and-
stack servers is dramatic.”

Opus Interactive customer White Horse, a Portland, Oregon based digital
marketing agency, agrees that virtualization allows Opus to provide a superior
level of service. “Let’s say I’m putting together a Web site promotion for one of

CHALLENGE SOLUTION
snapsHOt Providing clients with VMware® and Intel
VMWARE AND INTEL INDUSTRY
business hosting services technology creates a pool of
summarY Technology
requires a flexible, always on resources that can easily be
IT infrastructure adjusted to meet client needs

our clients,” says Jeff Hulbert, CTO of White Horse. “In the past, getting a new
server to support the project would have required two weeks of documentation,
and a one year lease at minimum—and if a promotion only runs for six months,
the physical box sits unused for the remaining six months. Now, our clients only
pay for what they need because Opus supplies computing power like a utility. ”

Opus feels that it can continue to provide even greater value to its customers as
the VMware and Intel technologies continue to evolve together. “We’ve deployed
VMware vSphere on the new Intel 5500 series processors, and the performance
has been amazing,” says Sherwood. “We get double to quadruple the performance
that we could on the previous architecture.”

Copyright © 2010 VMware, Inc. All rights reserved. This productis protected by U.S. and international copyright and intellectual property laws. VMware
products are covered by one or more patents listed at http://www.vmware.com/go/patents. VMware is a registered trademark or trademark of VMware,
Inc. in the United States and/or other jurisdictions. All other marks and names mentioned herein may be trademarks of their respective companies.

snapshot

“VMware and Intel have a perfect marriage, in my eyes. You can really see that
in the way their new products are specifically designed to work
together and harness each other’s strengths.”
The Foundation of Virtualization
Jeremy Sherwood
strategic account Manager, opus Interactive

R E S U LT

Improve service levels and availability.
“Features like VMware VMotion, VMware High Availability, and VMware Distributed Resource Scheduler
give us a high degree of redundancy and protection,” says Sherwood. “And Intel Flex Migration ensures
we can shift virtual machines across hardware, regardless of what generation of CPUs they’re running."

R E S U LT

Increase performance—not footprint.
“With the 5500 series processors, I’m doubling or quadrupling performance just by a chip upgrade,” says
Sherwood. “To quadruple the number of customers we can serve without increasing our data center
footprint—or our power and cooling—is a beautiful thing.”

R E S U LT

Provide better value to clients.
“Having a virtual infrastructure in our datacenter means that our clients pay for what they need, when
they need it,” says Sherwood. “And, they get all the built in clustering, high availability, and disaster
recovery that they normally wouldn’t get in a dedicated server environment.”

VMWAREAND INTEL DEPLOYMENT
AT WORK ENVIRONMENT
VMware® vsphere 4, featuring: • Guest operating systems: Microsoft
Windows 2003, FreeBsD, Red hat
• VMware EsX™ 4 Linux
––hp BL460 servers with Intel Xeon • Virtualized applications: IIs, sQL,
5500 series processors attached share point, Microsoft Exchange,
VMWARE AND INTEL to Left hand network san apache, Mysql, Firewalls, Load
• VMware VirtualCenter 2 Balancers
• VMware VMotion™
• VMware Distributed Resource
scheduler (DRs)
• VMware high availability (ha)

Copyright © 2010 Opus Interactive, Inc. All rights reserved. Brite is a registered trademark of Opus Interactive, Inc.
Copyright © 2010 VMware, Inc. All rights reserved. This product is protected by U.S. and international copyright and intellectual property laws. VMware
products are covered by one or more patents listed at http://www.vmware.com/go/patents. VMware is a registered trademark or trademark of VMware,
Inc. in the United States and/or other jurisdictions. All other marks and names mentioned herein may be trademarks of their respective companies.

Executive Summary
This report focuses on how the cloud landscape will change
in the next several years. The changes underway are pivotal,
and the need for companies to make the cloud part of a
long-term strategy is becoming a deeper priority as cloud
computing powering open APIs starts to extend its reach
beyond its roots as a way to reduce infrastructure expense.
In the near future, the emerging cloud will reach consumers
and open the door for businesses to build additional channels
like the Web did once before, but this time as a set of service
directories that are organically distributed across markets,
technologies and applications.

As an industry, we are emerging from a phase of infrastructure
cloud computing that has been driven by server virtualization
and scaling compute. Now we are moving to the next
phase of cloud platforms where higher order jobs such as
collaboration and communication services are the drivers. In
this phase the action will be in how the cloud scales the work
done by people, and in how an always-on, always-available
infrastructure supports applications that both cut expense and
generate revenue.

It’s in this phase that we’ll discard our previous categorization
of IaaS, SaaS, and PaaS, and private, hybrid, and public types
of clouds, and instead focus on platforms that extend end-to-
end and enable emerging ecosystems. The foundation of the
emerging ecosystem is based upon the following:

Open APIs:
The Marketplace of the Cloud Economy
The API is the channel for generating business, and first movers in API services are becoming the
new backbone of commerce. APIs will increasingly drive the ability to exchange transactions through
trusted partner relationships and real-time transactional services that are focused on the core business
of a company.

These APIs will include business transactions (transaction payments, rate limiting, ad exchanges) that
will start to replace the B2B and B2C engines that have focused on the process of selling and marketing
a company’s products. In this new world, the API is the product, and the customers will interface the
business model through it.


Coding for Clouds: Build and go everywhere
Today we are at an inflection point. In the earlier phases of cloud computing it was very attractive for
enterprises to leverage the cloud as a way to improve the infrastructure. Now we see an emerging
generation of cloud platforms that offer developers (inside and outside of the enterprise) the ability
to scale the infrastructure as one feature, but also focus on ease of building and scaling cloud
applications.

These platforms are very attractive to developers and give a fresh look at what Web infrastructure and
tools could look like. These platforms thrive in the open Web landscape, and as they grow we expect
to see developers convincing enterprises that being native on the open Web is more valuable than
centering Web infrastructure around enterprise applications and systems.

Security at the Endpoints
As the ecosystem turns towards APIs as a path to commerce, we will see new services crop up to
support this form of business. An important part of the new security profile is protecting business
data in a way that either wraps it (encryption) or scrubs it (cleanse) and leveraging these techniques
to reduce the risk of exchanging information using the public cloud. By enabling secure systems to
leverage “non” secure systems the industry is finding ways to route information around the security, or
in fact reducing the surface area of the data, rather than the surface area of the computing system.

In our emerging world of API communication and portable systems, a lot of security work will be
focused on tracking the movement of data, rather than restricting it. Instead of minimizing the surface
area of the enterprise, the next phase will be about tracking where all data is being shared, consumed,
and altered.

Today, B2B systems have controls and logs that track the batch data that is sent and approved for
consumption in business-critical systems. On the other side, consumer-facing Web applications
generate logs and traffic analysis based on user patterns and aggregate transaction analysis. As
open API use by the enterprise grows, and as open APIs reach consumer applications, we will we see
consumer-facing transaction analysis and compliance mashed together, which will create a view of
the consumer across multiple channels. As the ability to connect individuals to transactions and logs
becomes more granular, we will see a call for common rules and practices emerge in data portability,
privacy and vendor-consumer relationships with this social transactional data.

6 | ReadWriteWeb | Future of the Cloud

Real-Time Data Distribution
It’s outside the enterprise where we’re seeing new ways to effectively distribute data to applications.
A few trends in this space are going to tip power away from traditional databases.

First, large-scaling Web applications that use cloud resources need the data tier to keep up and keep
in-sync. Second, the noSQL object databases show distinct advantages in dealing with streams of data
that evolve over time. In essence, letting the schema build itself based on the data is more attractive in
the world where sharing services and data is the norm. Finally, developers are increasingly looking to
thin layers such JSON as desired packages for data being consumed by applications.

This gives developers a new target output with a goal towards simplicity and a focus on the data
server. As the API increasingly becomes the focal point, the tiers consolidate to focus on architectures
with the least amount of moving parts. Although the relational database won’t go away overnight, its
role as the default model for front-end Web applications and serving APIs will start to loosen. It will be
replaced with targeted data delivery engines that by default enable distribution and caching of data
for fast reads to frameworks and APIs.

Ghosting the Social Graph
The recent domination of social hubs Facebook and Twitter give us key insights to the emerging cloud.
Both of these services have evolved in ways that are repeatable for businesses that want to adopt
cloud services and participate in the new economy of APIs. Cloud infrastructures are going to live
alongside and leverage the social graph for everything from transactions to authorization. This pattern
will change the nature of the architecture of privacy, personalization and consumer engagement
through the services consumed.

Social graph clouds already offer third-party log-in, which we’ve called “identity as a service”. This
pattern is emerging as a replacement for a log-in identification or password, and shows that the hub of
identity for individuals lives very close to their personal stream – friends, family, and life moments.

These identity APIs enable developers to hook into the stream and specialize the message and channel
of the application. This pattern has helped make sites like Facebook and Twitter the center of gravity
– something we see other consumer brands wanting to join in on. Finally, the science of scaling this
generation of real-time applications shows both these organizations in the forefront of cloud and
data distribution. We see them as early, large-scale user of Memcached, Cassandra, Unicorn and other
specialized data distribution technologies as a way to meet the need for speed in delivering the real-
time web.

When looking at the future, innovation in scaling the social graph and transactions around it will be
the model to follow in the next phase of cloud computing architecture.


Summary
Cloud computing is evolving quickly into a race for computing power, communications and
transactions. As it merges further with social and identity services, it even challenges the idea of
national boundaries and resource management.

In the next few years there will be a massive building phase with a lot at stake for traditional and new
service providers. We predict cloud platforms that emphasize open data exchanges through APIs
will become the dominant force for building ecosystems that will tip the balance of the developer
mindshare – and perhaps set the social boundaries for this generation.

The future will be driven by the relationship between transactions. The architecture of the enterprise
will evolve beyond standards-based B2B data exchange and will instead develop real-time APIs to use
with its partners; to the extent these interfaces are real-time, the enterprise itself will need to become
real-time to keep up with location-driven and personalized relationships.

Real-time is the life blood of the enterprise. As APIs continue to develop, the next evolution of
enterprise software will look like advanced Twitter-bots or real-time algorithms that track the moment-
by-moment pulse of a business. This ability to take a transactional view of an enterprise will create
an opportunity for a new future for accounting – a new and tangible way for setting the value of
organizations based on an index of brand activity.


Clouds of many shapes and sizes
Several different types of cloud patterns exist.
Using the principles above, we’ve looked at what the next
steps those clouds must take in the open-data ecosystem.

The Infrastructure Clouds
The market leader’s core engines are a mixed model of open
vs. proprietary. In this way, they’re similar to Apple, where
there are core advantages to seeing their technology win in
the marketplace.
The cloud computing movement has from its beginnings been infused with the ideas of open source
and portability. As a market, it is scrutinized more than others because of those roots. The reality is that
hosting a workload in the cloud creates the ability to spin up resources in other clouds.

These companies have, to a large degree, embraced the open-source community by sharing APIs and
creating an open-source layer on top of the core engine for public cloud and server virtualization.

Today, extending vertically is a focus for all types of infrastructure clouds. This is represented in a tug
of war between private and public clouds as they evolve. In the next years, we’ll see more attempts
at portability by cloud providers (following the leaders Amazon and VMware), and we see a distinct
possibility of interoperability and partnership as the companies race to grow the core offering of
powering the computing workload.

OTHER APIS OffEREd TOdAy Compute (EC2, VMware ESX), Storage (S3), App as a Service
(software virtualization)
UPCOMIng AREA Of InTEREST Open data exchange between XEN, EC2, and VMware
(standards plus vendors)

LAndSCAPE VMware’s recent deals with Google, SalesForce.
Amazon as a ruler of computing, Microsoft and IBM as software.
Citrix Receiver on iPad is enterprise cloud ready.


The App Store Cloud
Apple started a revolution by offering secure, connected,
monetized mobile applications. Other companies are
following this pattern, and at the same time extending it into
the core of all computing.
Apple is a great example of a company that has built a massive cloud that supports its businesses
through APIs. The company has learned where to share, and has baked in developer-facing APIs and
services into its business. Apple has a powerful end-to-end, model-driven architecture. It runs on
multiple types of devices and form factors, has the ability to control the app store and distribute content
to its different devices, and it has ubiquitous cloud services designed for delivery for each form factor.
Because it’s reached this point first, the company has built in controls and information segmentation that
no other vendor has. Apple is building the first consumer cloud – and it is rocking in the marketplace.


iTunes plays a role in the cloud by aggregating music that’s available for sale, and then tracking
it for consumers in a portable library. This music is then securely distributed by the cloud to local
devices. Local developers writing applications for the iPhone can use a well-defined API to access and
manipulate the library so that the mobile, real-time user has it when they need it.

Apple is one company that is using the cloud to build a business, without using the term “cloud” in
their offerings. However, the company is an innovator in enterprise cloud computing precisely because
of its focus on the end-to-end consumer experience and the use of a cloud in the back-end, powered
by easy-to-understand APIs in the front. When building APIs, the mantra we’ve heard from Apple is that
you must “treat everyone as being supported for life.” This, of course, isn’t entirely true, as deprecation
happens even in iOS, but it is an important goal in terms of building a core set of expanding building
blocks – even at the price of having tighter control and fewer choices for developers.

In the end, it may be where there are the fewer choices (e.g. Apple) that we may see the highest
longevity of loyal developers, namely because of the simple reason that the rules are more solid.
Apple’s cloud will emerge as the first end-to-end safe zone for personal computing. In Steve Jobs’
recent keynote at WWDC 2010, he explained that Apple has taken a position that there are two
platforms, the App Store and Web (specifically HTML 5). In the next several years we’ll see the App
Store emerge as the model for the cloud, where payments, security, and great applications live. The
Web, which is the rest of the world, will continue to be the driver of the rest of the Web and bring
disruptive force of the cloud directly into the mobile experience.

Nokia and Google have started their app store products and largely follow the pattern that Apple
has set in the market. In the western U.S. market, Google and its partners have spent considerable
marketing effort in promoting the Google app store and the power of the mobile marketplace. This
pattern will continue for all handset manufacturers and will mean that carrier-sponsored offerings will
enter the landscape.

APIS OffEREd TOdAy iPhone, iPad, iAd SDK, StoreKit and APIs.
UPCOMIng AREA Of CLOUd Grand Central Dispatch for core computing. MobileMe,
And API ExPAnSIOn iTunes music streaming services.
LAndSCAPE iPad in enterprise creates more demand for cloud devices
in toughest markets.

Apple buys streaming music company Lala and
is yet to announce plans.


The Enterprise Cloud
The open vs. free discussion will be a key driver in
determining the success of software companies making
a bet on cloud providers. As the Apple examples above
demonstrate, the right balance may have proprietary
components to it. As long as it meets the needs of developers
and consumers, open, proprietary and portable can be a big
part of any organization’s business.
There is a lot of ongoing discussion of the “open” cloud, where vendors will absorb other services into
their clouds to better capture the value of computing resources through a piece of the revenue (e.g.
app stores). And the “race to the bottom” of infrastructure pricing will continue. The wild card in this
discussion is the mixed model, which enables an organization to participate in open standards while
retaining key intellectual properties and the business models that benefit from it.

In the next several years, we will see a change in how the largest providers go to market with their stack
and how they open it up further. Open is attractive to the developer ecosystem, and portable will create
trust and value with consumers and developers. As Microsoft establishes it’s cloud offerings, it may be
well positioned to benefit as it has been a key integrator in the enterprise market.

Connected applications will be the driving force in determining the interaction with partner
applications and the infrastructure to support it. If it’s possible to do a SalesForce transaction via
Twitter, then SalesForce will customize to meet that ability.

Our prediction is simply that companies will move further towards portability as a receiver and as
a producer. The natural tendency will be to absorb services that can be disrupted, and we’re clearly
seeing a lot of activity like that with platform cloud providers like SalesForce and Google offering
relational databases as a service, storage, and social media data feeds.


APIS OffEREd TOdAy Google Apps is leading in its integration of business productivity tasks and
delivering the APIs that join them. Google’s APIs have already generated
billions of transactions. Google identity services are the leading third-party
authorization.

SalesForce cloud platform is available through AppExchange; VMforce
partnership will offer RDMS in the cloud.

Microsoft Azure is moving to a position where it will leverage its work in
identity, Web services, and productivity tools.

RECEnT ACTIVITy Google and SalesForce partnering with VMware and SpringSource
to empower Java developers and add relational database services.
Both companies now have an enterprise focus that starts to counterbalance
.Net and breathes further life into Java and the development community.


The App Hosting Clouds
The practical issues of releasing and testing software will
continue to affect platforms the same way it does today (Mac
vs. PC, iPhone vs. Android), and the vendors that try to do it all
will likely fail to optimize for the local platform. Public cloud
companies like Engine Yard are already creating templates for
Ruby apps to connect to mobile (Web and non-native) as a
base part of the platform.
There are exceptions of course, but until portability of computing is more baked into the system, we
will see more fracturing in the short term – even as the biggest vendors work to deliver. The industry
tends to get into stalemate such as the standardization in the enterprise of messaging services
(enterprise services bus and web services interoperability) where adoption splits along technology
corridors. Java and .Net are another example where this has existed in the past, creating parallel
markets for tools, patterns, and standards. The area in-between can be a scary business and technical
proposition. In today’s market, the VMware vs. Baremetal discussion is a great example of where
companies may be forced to make short term decisions for the benefit of simplicity. What is unique at
this point in the cloud evolution is that higher order battles are happening alongside the changes in
cloud technology. Platforms, like Heroku move higher up the value chain for web developers (Ruby),
and platforms like Rackspace are showing us that a world with many flavors of virtualization and cloud
services is very viable.

Looking at Ruby platforms Engine Yard and Heroku we see into the future. These companies are taking
advantage of another model-view controller architecture, Ruby on Rails, and using it to abstract the
infrastructure behind the application. This pattern allows developers to bring applications into the
cloud without having to worry about any of the scaling architecture across the tiers, where traditional
cloud and database systems are still evolving.

This is attractive to developers, and is creating a new set of ecosystems that give developers the ability
to quickly scale Web and Web-plus-mobile apps. Like the app store, the Ruby platform and associated
open-source projects give developers a way to focus on creativity and worry less about systems.
In this approach, we move the motivation for cloud to “scale with my business” instead of “reduce
my infrastructure exposure”. These platforms strike and emotional core for developers, giving the
average person an ability to be a star and focus on the goodness of the application. This alone creates
inspiration and a canvas for creative projects.


APIS OffEREd TOdAy Heroku and EngineYard live on Amazon and give natural access to
other Amazon services such as Memcached.

Rackspace lives on XEN and VMware.
Portable compute.
Take your Ruby with you.
UPCOMIng AREA Of InTEREST Scaling Enterprise Ruby, Public and Private merging, Charting
developer cloud preferences.
LAndSCAPE Scaling Ruby to meet the enterprise
Rackspace support both XEN and VMware

Clouds Can be secure (just add water)
Using the public cloud for scaling is becoming a default
way for scaling consumer-facing Web applications. In these
applications, security is a secondary concern. The economics
are an amazing attractive for these applications and the ability
to scale up incrementally when needed has been a big win for
companies that have hit products.
Using the public cloud for sensitive data is taking longer. Ensuring that private data (e.g. health
records, financial data) is managed tightly down to the hardware level is a hard problem. But the
economics of using public-cloud resources for computing is so attractive, investments are being made
to make public clouds good enough to support sensitive information. The question, “Is your own data
center any safer” is a valid one, and before it can be answered, public cloud services will need to reach
parity with most data centers in terms of security and compliance features.

We’ll see success in this area from companies who employ smart data management practices. Looking
at this from the public cloud perspective, we see new services that join the powers of computing,
persistence and networking. This will create the long-sought-after ability to inventory of all the
physical assets that are used when a computing workload is run. So for example, if you’re a running
sensitive job at Amazon, you’ll be able to track all of the disk, memory and CPU resources that were
used on any given job, for any particular data, in a particular time frame.

Practices such as scrubbing sensitive data at the end points and having specific patterns for identity
matching will be forced to catch up with the computational power of our clouds. One way to think
about it is as a well-organized network of information that filters and inspects the data as it leaves, and


unscrambles it as it completes its work in the public cloud. It doesn’t send batch data – it sends micro-
transactions. It builds on real-time to build trust fabrics that reduce risk.

There’s going to be an increase in services from cloud hosting and utility providers that solve those
problems. For instance, we’ll see cloud management vendors specializing in services around compliance
focused transactions. Instead of trusting scientists, analysts, and IT leaders to solve security, we’ll look to
vendors to provide the bridges for enterprises to cross. RightScale, for example, is one company that has
put a focus on vertical market cloud solutions that are tailored to businesses needs.

What is emerging is the smart practices of data management, optimized for open API, portability and
distant endpoints. In this way, cloud computing is creating the demand for a better trust pattern for
information that scales in the same way that computing does. It’s an inspiring part of this facet of the
cloud to know that security will have to keep up with what’s cool (e.g. apps).

Both consumers and enterprises are moving to cloud services. Here is a sample transaction that runs
through many clouds to complete its life cycle.

LAndSCAPE Identity as a service with third-party logon services
Securing Google apps with third party apps
Third party logon takes off on consumer sites


The Distributed-Data Cloud
The database is one of the key bottlenecks in scaling. With the
new, always-scalable computing in the cloud, this challenge
has been met by a number of companies such as Cassandra,
Mongrel, Memcached and Hadoop, each with Memcached
unique variants. Open source and social scaling are the new
currency of engagement and have re-crafted the rules.
When we try to map the meta landscape of the database market, we see real time in memory growing
dramatically. The new layer of data that is represented in the social graph and Web apps contains the
end-state of the consumer world. By adding open APIs to this pattern we see a future where data-
distribution technology literally speeds up the economy. If your transactions are in real-time, the
enterprise will be forced to detach from its processes of batch files, jobs and ERP into a new world of
automation engines. Companies like Amazon, Paypal, Apple and Google have a clear advantage.

In-memory caches, which can offer scaling as a core feature and can be built on-top of existing
infrastructure, are replacing databases in terms of importance. We see a future where the standards
of today will become part of a broader platform, which will re-invent the cost infrastructure of the
database.

SalesForce, Google, Amazon and others will grow in the short term by offering cloud-based RDMS, but
the big win will be luring developers and core business processes to drop out of the big enterprise
solutions. In the next several years, Oracle and IBM will end up caring as much about distributed data
sources as they do about enterprise services. But the game will be complicated as the open-source
vendors that don’t have requirements with enterprise software will be that much further along.

In initial implementations of private clouds and virtualizations, the SQL database wasn’t distributed
like the rest of the software due to issues with data concurrency, replication, and other features that
are embedded in SQL. For large, distributed Web applications such as Facebook, Twitter and a host of
others, this type of scaling simply would not work. Now that new, open-source solutions fit the needs
of large Web applications, their utility as a data service for the enterprise is clear. As we move systems
the cloud, the data must go too.

Below is a conceptual view of the difference between a single SQL server and a distributed database
where distribution is handled at a different point in the system. This takes responsibility off the local
system and creates a lighter weight set of responsibilities for the node instance.

It’s this big architecture change that enables multiple writes across physical environments, and enables
controller architecture that will keep everything in synch. Although it was innovated on the Web,
enterprises with a need for fail-over solutions or that want to distribute locally will want it, too.


This class of technology will work alongside hardware virtualization so that local containers or mini
clouds can be distributed physically to branch offices instead of replicating large data sets and keeping
the local office in synch and in context with other services across the globe.

Even more valuable is that many of the processes of the enterprise have turned to the consumer Web.
Instead of these systems being seen as adjunct to the core processes (e.g. Oracle or SAP), and instead
of them being at the heart of the transaction, we see that there is tremendous value in using Web data
as the brains of the enterprise.

dEVELOPERS dIg ObjECT dATAbASES And SQL fAILS TO SCALE
The key to getting technology deployed is having a person to do it. Tools like MongoDB, Cassandra,
Memcached are gaining loyal fans with Web architects because of the way they model data in a way
that assumes there will be evolution. And as platforms like Heroku start to take responsibility for
scaling the data tier and give patterns, we find that having all the “power of SQL” is attractive, but like
working on your own car, it’s mostly going to be a thing of the past – something for hobbyists and
people who scale on the world stage.

One of the keys to a growing cloud are Web services that power the ever-connected real-time data.
Instead of data warehouses, we’re building data layers that are abstracted as objects. This model
increases the utility and flexibility of data services to adapt to all types of situations.

Real time decisions for medical, financial and retail, and the connection to consumer movements, will
drive disruption of the enterprise data tier and force it to catch up with Google’s index, Facebook’s
posts and Twitter’s timeline.

UPCOMIng AREA Of InTEREST New data servers emerging around JSON, Javascript, Node.js.
LAndSCAPE Northscale raises bar and series B
Yahoo uses big-data to fight spam


On-Premises Clouds
We see the mix between private clouds and the public
infrastructure making significant advances.
Price pressure and the growth of computing make virtualization and public cloud implementations
even more attractive. For some jobs, including scaling Web application hosting and designing Web
architecture, it can feel like maintaining a Cobol mainframe in the past. The label used in IT shops is
“legacy” – or simply stated, it should be on the way out.

With the pace of change in infrastructure clouds and app-hosting clouds, the desire to host locally will
continue to recede, and tools for developers will further optimize always-on resources and tools. IT
will continue to feel pressure in the short term when it comes to rationalizing the infrastructure cloud.
We believe companies that just do it will gain significant market advantage in areas where business is
data-driven and time-sensitive.

The public cloud becomes a clear option for secure workloads. As enterprises grow accustom to seeing
changes in each other’s business in real-time – rather than in big data feeds and business intelligence
tools – they will evolve towards running their business logic in the real-time data they are consuming.
The companies, like Amazon, that are positioned for this change will respond better to demand and be
able to take advantage of pricing and in setting the standard for acceptable computing for private data.

APIS OffEREd TOdAy VMware as core, Open protocols (e.g. storage).
UPCOMIng AREA Of InTEREST Rack solutions, Amazon internally.
LAndSCAPE VMForce for Java developers
Hitachi releases private cloud device


The Identity Cloud: Us as a Service
The ability to effectively use the social graph for smart apps
that enabled transactions and respond to real-times needs is
very attractive. The “point of intention” has been very successful
for Google and now Facebook and Twitter. The future will be a
response to the social graph, and will rely on the “versions of
me” on the Internet to conduct key business transactions.
Moving to a level where transactions and currency are involved in our social status and activity stream
means becoming directly connected to the enterprise. Responding to the real-time consumer input
will further drive the enterprise to evolve and react.

In the coming years, the bonds between social and personal information services will become more
expected and integrated into the basic model of the enterprise. Whether it is people liking your Web
page or tweeting a service request, the linkages are already in place and replacing traditional forms of
communication. We have already moved past the point of inflection in advertising engagements as
a relationship pattern for enterprises. Now we are merging these relationships so that they are truly
transactional, where “Like” means “Buy” – and of course it means now. This is disruptive for software,
retail and communication all at once.

This will put short-term pressure on user experience and privacy. But as these patterns of
communication between enterprise and the individual continue to be invested in, we will see more
and more #fixmycable @comcastcares, or #renew @GoogleDocs, or #blockmyboss @Facebook. The
bridge between these services will be a new layer of the Internet that will be formed between personal
information clouds and enterprise clouds through real-time services. We see a rift in capability
between companies that move in this direction vs. ones that don’t, similar to the shift made when
the Web was first popularized. Innovators are companies that take advantage of the disruption; leaders
seem to be Amazon, Netflix, and Apple leading the way, and meeting Twitter and Facebook in the
middle.

Another key trend is the unique opportunity in connecting workforce (employee) and consumer
social clouds.

Google has a front-row seat in the merging of personal and enterprise systems, and is disrupting the
technology stack all the way from mobile, with Android, to the core technology of the Internet with its
work in Chrome. These browsers are being tied to a model of rich interaction driven by cloud services.
Google has lined up an impressive array of APIs and core technology and may be the key innovation
hub for connecting enterprise developers and Web developer paradigms.

Google, with its massive push to the enterprise, is in the unique position to see both user and
enterprise views of the same person. With Gmail, it has co-opted email as a trigger for identifying and


marketing to individuals, and has found a stronghold in the enterprise collaboration services. Buzz, on
the other hand, is a different example of the company trying to find context with its users. In this case,
the company had found success using the Buzz tool for itself, but when it introduced it to the rest of
the world it stumbled because Buzz was missing a piece of the consumer DNA.

As time goes on, we need to watch how Google approaches payment services, mobile app stores, and
Apps Marketplace payment engines. The question is going to be whether the company is able to find
the right balance needed to win on a broader platform where it will have to siphon off the needs of
enterprises converting towards cloud computing and always-on dialog with consumers.

APIS OffEREd TOdAy Facebook Connect, Twitter Anywhere, Open ID, oAuth.
UPCOMIng AREA Of InTEREST Transactions from social applications into the sales process.
Privacy.
LAndSCAPE Twitter asks for our phone number.
Healthcare needs a cloud.
LadyGaga is a killer app
My boss is chatting at me with Salesforce
Facebook: Privacy does matter


Conclusions
The cloud we see forming today will emerge into different
platforms. These will be a mix of open and proprietary technology
employed to create advantages in the ecosystems. Like in other
businesses, these cloud platforms have different and overlapping
features, and many of them will peacefully coexist.
By combining the social graph and commerce with consumers in the cloud, we see an increased and
accelerated investment the process of sales, leads, and overall collaboration with individuals. Decision
makers in large businesses will see a distinct opportunity in investing in cloud computing as the tool to
service consumers’ real-time appetite.

It could be said that the first phase of the cloud was about defining what “the cloud” is, and developing
the foundation for the services it provides. Now that those fundamentals have been set, it’s time to
build on them. Today we’re in the middle of a massive transition. The next phase of the cloud will be
about powering social enterprises, and will be even more disruptive than the first. Companies that see
the potential in this transition will not only thrive, they’ll help determine the path the cloud will take
for years to come.


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