Notes from the Goldman Sachs Cloud Computing Conference

Last Wednesday Goldman Sachs held its annual software retreat in NY.  The topic this year was cloud computing.  This year’s program consisted of a series of panel discussions around the hardware, communications, hosting, services, and software aspects of cloud computing and SaaS.  Noteworthy:

• Each participating panelist provided their own definition of cloud computing that was aimed at showcasing each vendor’s cloud computing solution.  My sense is that today cloud computing is a “vendor push” solution rather than a “market pull” solution.  As a further validation of this statement I offer the opinion of a few CIOs participating in the event who stated that even by the end of 2011-2012 at most 15% of IT loads will be executed in the cloud, including SaaS applications.  This number is consistent with the one recently published by Goldman Sachs after they surveyed several CIOs on this issue.
• The early adopters of cloud computing are the companies that have already determined that IT is not one of their core competencies, and have the least IT to amortize.
• CIOs will use the cloud to:

1. Better control the expenses of running core applications, i.e., they won’t have to invest on IT infrastructure to be used only during peak conditions, .e.g., Black Monday for e-commerce retailers,
2. Save on resources that are used to run non-core applications,
3. Run SaaS applications, and
4. Achieve higher quality of service for business unit users at lower cost.  Through cloud computing CIOs would like to provide business units with the opportunity to decide how much to spend on running a particular application and under what SLAs.

• Two years ago the discussion was whether the enterprise will adopt any SaaS applications.  Today the conversation is about which on-premise applications will be replaced by their SaaS equivalent.  SaaS has penetrated the enterprise, is showing strong ROI which is in turn resulting in accelerating adoption.
• Infrastructure as a Service (IaaS) requires management skills that most IT shops today don’t have.  Most IaaS efforts are still in testing environments rather than production environments.
• Security, compliance (e.g., PCI, HIPAA), data transmission and data center connectivity are some of the biggest issues that will continue inhibiting the adoption of cloud computing in the enterprise.
• CIOs don’t want a single, ubiquitous stack for cloud computing but the ability to work simultaneously with multiple stacks coming from different vendors.
• The capital requirements of cloud computing startups will be high as they will look to create offerings and value propositions that can effectively compete with those from large IT vendors, e.g., IBM, Cisco, Microsoft, EMC, and be adopted by CIOs.

Comments

[Adolph_Cahm]

Recently i attended the cloud computing conference. The conference was about the latest trends and changes in the cloud computing world. It was more helpful for my career. It is the 1st annual virtual conference. I attended the conference by registering in http://cloudslam09.com. Cloud computing provides a various type of services for the internet users.

[duvalCS]

Awesome, can't wait for the next one!