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On July 19, 2010, Rackspace led the announcement of OpenStack, with a goal of creating an open source cloud software solution for use on industry-standard hardware.  The initial releases contemplate solutions for both cloud compute and object storage.  While these are the first two releases, they are separate offerings.  Remember, cloud storage is not just the storage target for cloud computing, it is one potential storage target for cloud computing, and is in and of itself a stand alone cloud offering of programmable storage.

Now, I have purposely used a term from the clothing industry, "off the rack", to spend a moment looking at a framework for evaluating the opportunities this may present.  With dress shirts, you can buy off the rack, semi custom, or custom, each with a unique value proposition based on fit, choice and cost.   Interestingly enough, this may be a good lens through which to consider the possibilities of OpenStack, and in particular, OpenStack Object Storage.

Rackspace has made no secret of its motivations for leading this initiative, and its desire to focus on "fanatical" service as it's key differentiator versus the fundamental technology on which the service is based.  Fair enough, and so the question becomes, is the rapidly emerging and immature cloud marketplace already "mature" enough to seek homeostasis?  (Homeostasis is the property of a system, either open or closed, that regulates its internal environment and tends to maintain a stable, constant condition.)  Have enough models and innovations, from startups, academia, open source movements and large tech companies, been tested in the marketplace to the extent that we can already race to the common denominator?  Perhaps now is a good time to start, as long as you are willing to acknowledge that the desired results are a good ways off.

Before we jump off into "Off the Rack" software, a quick look back at open source is helpful.  For more reading on the open source software industry a good introduction is The Cathedral and the Bazaar. Six things are particularly interesting: 

1. An open source alternative can emerge as a follow on to a successful commercial technology and can become pervasive versus the commercial offerings it succeeded (LINUX versus UNIX is the reference case here).
   
2. A second result of this approach can also end up with a big success, although in more of a niche than a pervasive replace for the earlier commercial offerings (MySQL versus Oracle, IBM and Microsoft in the relational data base space).  
   
3. An open source effort can also emerge earlier in a technology cycle and come of age as a pervasive solution (Apache Web Server comes to mind here).
   
4. Open source generally requires very careful cultivation of the community of developers, with active interest by academia (and partnering with NASA is part of the formula here).  Commercially sponsored open source efforts are becoming more common, although it as of yet has not been proven as the typical "breeding ground" for most great open source successes.  Eucalyptus, with its roots at University of California Santa Barbara, seems to be a more traditional route.
   
5. Open source is not necessarily reflective of rapid commercial opportunities for success.  Eucalyptus is obviously beginning to maneuver towards a repeat of the commercialization model.  OpenStack is taking the approach most favored by other open source successes like Apache.  A couple of good reads here are this article from BusinessWeek and this. See also Derrick Harris' post over at GigaOm.
   
6. There are also hundreds of thousands of open source projects that had mixed success or languished altogether. A quick look at  SourceForge (an open source project hosting site) shows nearly a quarter million hosted projects. How many of these have languished or had little impact on the market.
   

So, the first issue is that there will exist for some time to come a real question as to the adoption potential of OpenStack.   I believe that adoption is driven by applicability to need.  In a moment we will address a serious issue which OpenStack Object Storage must overcome to be successful, at best, and at worst, will confine it to a niche market.  My views are very much directed at the Object Storage offering, versus the compute offering, which I believe exists in a different space and as a different type of solution.  With this backdrop, let's have a look at the cloud storage marketplace today, and use the analogy of off the rack, semi custom and custom:

• Off the Rack:  implement as is, one size fits all, each with unique approaches for performance, scalability, bit integrity, may or may not provide geo services.
• Semi Custom:  Select from storage types (DAS, SAN, NAS, JBOD), shared or distributed file systems and object systems, mix and match storage for different SLA and cost/usage patterns on the same infrastructure, multiple APIs, meta data and catalog abstracted from storage layer, geo services.
• Custom:  Generally a service only offering and not available as deployable infrastructure, specifics will vary widely based on service provider offering strategy.
  

Infrastructure	Type	Comments
Eucalyptus	Off the Rack	Limited S3 APIs
OpenStack	Off the Rack	CloudFiles APIs
Scality	Off the Rack	S3 APIs
Mezeo	Semi Custom	Mezeo ReST APIs and S3 APIs
NetApp	Off the Rack	Bycast APIs, NetApp storage
EMC Atmos	Off the Rack	Atmos ReST APIs, EMC storage
Service	Type	Comments
Amazon S3	Custom	S3 APIs
Microsoft Azure	Custom	Windows centric
Rackspace	Off the Rack	Is the basis for OpenStack
Nirvanix	Custom	SOAP APIs, multi node
Google	Custom	Offers S3 APIs
AT&T Synaptic	Off the Rack	Based on EMC Atmos
OpSource, SoftLayer, Layered Tech and others	Custom	Based on Mezeo

As you can see from the summary above, there exist as many views of what constitutes either a cloud storage service or a desirable cloud storage deployable infrastructure as there are service providers and vendors.  Note that a semi custom infrastructure results in a "custom" service as implemented.  "Off the rack" results in very similar services by those who utilize the same infrastructure unless they make their own major additions.  Any offering can be differentiated by service, and the degree and quality of service is critical to customer satisfaction and plays a strong role in value creation.

The OpenStack announcement as it regards Object Store and its approach to cloud storage seems to view cloud storage infrastructure as highly akin to an operating system (or at least a "hypervisor") and more similar to a selection of LINUX or Windows than that of an application or middleware layer.  While I agree that cloud compute is very close to this model, cloud storage is a service oriented architecture, with programmability for new applications that can tolerate Internet latency because of Web Services (like ReST APIs). The industry constantly overlooks this key point as it is consumed with the low cost, pay for use and thin provisioning capabilities of this storage tier.  Solutions for thin provisioning and low cost have been available far longer than cloud storage. Further, pay for use is more of a business decision than a technology. 

In the earliest days of cloud storage, there existed initial confusion that cloud storage was defined by cost, scalability, pay for use, and thin provisioning only and not programmable access (usually via ReST APIs).  ParaScale paid a huge price for not understanding that cloud storage requires Web services (like ReST API) access.  Now, with OpenStack Object Store, we see a follow on case of this same perspective, but with basic APIs for Put, Get and List.   Yes, it provides for Internet access via ReST APIs, but the focus continues to be primarily cost based versus new application enablement based.  It could be argued that the open source approach will provide for the appropriate additions of "advanced services" to be added.  However, even the use of the platform by NASA is more focused on cost of storage than on advanced functionality because NASA stores much more data than almost any institution or enterprise in the world.

I think Savio Rodrigues states this view very well in his post:

"Select products based on business needs, not license alone: It's also interesting to note that very few enterprises are in NASA's position with regards to size of IT investment and skills in-house. While NASA engineers were ready and willing to contribute new features into the Eucalyptus open source community, few companies have the skills or governance to consider allowing their developers to contribute to open source projects.  Summary trend number 7 from the 2010 Eclipse survey results highlighted this issue.

To suggest that NASA's buying or IT decision making patterns represents much more than the top 1 percent of IT buyers would be a stretch."

The overwhelming majority of enterprises would rather pay a vendor to deliver, maintain, support and enhance their private cloud software infrastructure than place that burden on internal IT staff. Whether the enterprise is paying for a closed source commercial product, a commercial product based on an open core product, or a subscription to an open source product, the product selection decision will be made based on business requirements much broader than 'is the product open source or not?' "

Keep in mind that cloud storage is a stand alone service associated with application delivery over the Internet and also associated with low cost, pay for use, scalable storage resources.  Social media applications and many Web based applications exploit these capabilities; for example publishing a file to a URL and significant tagging of files.

This view of cloud storage as nothing more than cost and volume-based ignores its extraordinary importance as a service-oriented architecture for new application enablement.  I believe both views are equally important and need to be equally served.  Will OpenStack, with its pervasive cost focus, be able to drive its community to this additional view of needed contributions of advanced services for cloud storage?  Lydia Leong of Gartner Group provides an interesting view of the open source community issues associated with this in her post:

"At the same time, open sourcing is not necessarily a way to software success. Rackspace has a whole host of new challenges that it will have to meet. First, it must ensure that the roadmap of the new project aligns sufficiently with its own needs, since it has decided that it will use the project's public codebase for its own service. Second, it now has to manage and just as importantly, lead, an open-source community, getting useful commits from outside contributors and managing the commit process. (Rackspace and NASA have formed a board for governance of the project, on which they have multiple seats but are in the minority.) Third, as with all such things, there are potential code-quality issues, the impact of which become significantly magnified when running operations at massive scale."

One last comment on this business of vendor lock in and cloud storage APIs (another focus of the OpenStack announcement).  I would submit that while a specific set of APIs has the potential to create vendor lock in, this is a much smaller problem than what is experienced in other technologies.  If you are really worried about it, you probably have never actually written a ReST API call.  It is written in many languages, and we have seen cases where applications that run on S3 run unchanged on Mezeo.  Others need very minor modifications, and still others are excited to take advantage of some of the unique Mezeo services.  It just is not a problem, and this is much more related to FUD (fear, uncertainty and doubt) and marketing zealotry than it is associated with technological reality.  The APIs of choice will shake out, and it is far to early to say if it will be S3, OpenStack, CDMI or a combination of all of these, and others, as yet unforeseen.  (At Mezeo, we have never believed there will be one winner, and instead focused on architecture to enable easy and effective delivery of whichever APIs stand the test of time.)

The interesting view that seems to be missing here is that marketplace competition by service providers already serves to drive down the price of cloud storage, so a commoditized stack embraced by most is unlikely to yield extraordinary incremental savings.  At the same time, while the competitive market conspires to drive cloud storage costs ever lower, the need to differentiate, and deliver solutions as well as a programmable storage to enable multiple new and exciting types of applications will rapidly replace the pure cost and scale focus of current cloud storage offerings.  Sometimes, the "new" application is simply enabling it in the cloud, to produce the same result at a lower cost!  This requires significant cloud storage functionality in order to make this easy and productive.  Amazon continues to prove this with their many additions and capabilities which differentiate their service.  Mezeo sees much the same view on the part of our customers.  The focus is on what cloud storage can do, what problems will it solve, what business opportunities does it create, what new applications can it enable and all of these views assume it will be competitively priced.

Cloud storage represents significant opportunities for institutions, the enterprise (see my recent post on the business case for enterprise cloud storage) and for the IT service provider.  Cloud storage is substantially different from cloud compute, and requires that you understand this difference in order to effectively evaluate the impact of this announcement, as well as your next steps.

There is no doubt that every enterprise has devoted some time and energy to evaluating how cloud technologies can best be put to work in their ongoing pursuit of cost reduction and to a lesser extent for potential improved service levels particularly around rapid provisioning of compute and storage resources.  Mezeo has recently begun to work with various enterprises, and I want to share some of the opportunities that appear to align strongly with these two goals.

In terms of cost, most enterprises are experiencing continued and significant growth in unstructured data.  As they look at the cost of this growth, it is more than just physical storage, data center occupancy, bandwidth utilization and power and the accompanying management demands; it is also the backup and disaster recovery requirements and the ability to quickly satisfy users who need more storage in order to execute whatever tasks and jobs they have.  Against this backdrop, the drumbeat of Amazon S3 and other public storage clouds advertises storage at costs that are generally below the internal "advertised" cost of the typical Fortune 500 company.  What gives?

First, cents/GB/month is only the tip of the iceberg, and bandwidth along with access charges gives a more realistic cost appraisal.  Next, real and legitimate concerns about data security exist (will someone gain unauthorized access, by accident or via an attack, to company data stored in a multi-tenant public storage cloud?).  Also, data integrity concerns are well founded (will the bits I store be returned, and will they be backed up and appropriate DR measures taken?).  Finally, can I absolutely trust the service provider to execute to the extent deemed necessary, and if they do, can they really save me any real money versus the assumed risk profile?  Private cloud computing is an appropriate strategy for addressing these issues.  

Not all unstructured data is a candidate for the latency of cloud storage as delivered from an IT service provider via the Internet.  So, while some tiers of data may be appropriate for a cloud storage service, it is a subset of the enterprise unstructured data requirement and not a lower cost panacea.  Hopefully, CIOs can easily make this case with their peers in senior management, although it may sometimes seem like they are making an excuse for keeping control and not exploiting new technologies.

Question one surrounds the cost proposition, and our analysis suggests that, even at sub petabyte initial cloud sizes, the enterprise can deliver economics for in-house cloud storage that compare very favorably.  In fact, it may even be lower than what is available from a service provider.  The Mezeo team comes from both a hosting and a cloud storage background, and this just reinforces our view that the cost proposition for private cloud storage has favorable economics.  However, if you are being forced to allocate capital for data center build outs, or you are otherwise CAPEX constrained, the hosted public cloud economics can be quite appealing.  Since businesses require positive margins, this further drives up the cost of cloud storage as hosted at a public service provider.

The case for improved user satisfaction is similar, regardless of public versus private, because the cloud gives users the capabilities they want.  First, with rapid provisioning of pay-as-you-go low cost cloud storage, the end user gets what they need when they need it via a frictionless interface.   Second, several benefits drive end user demand for cloud storage; including: avoidance of workstation storage upgrades, one solution for file sharing and collaboration, new capabilities and applications that exploit file search, tagging and publishing to a public URL, and the ability to access your storage anytime, anywhere and on any device.  Third, the solution is also ideal for implementing a workstation backup solution with sync.  It is not hard to see why end users would find all of these capabilities appealing.

Cloud storage clients, gateways and edge devices are also beginning to appear, and can solve many different issues.  For example, a client gives the end user access to multiple cloud storage accounts at multiple providers.  Why not replace that tape backup operation at a remote location with an iSCSI interface directly to a storage cloud, for a scheduled backup without local user intervention (get rid of the tape backup of your local file server, forever)?  Speaking of file servers, multiple solutions for replacing or even displacing file servers are coming to the market.  The savings from removing an entire layer of infrastructure are quite compelling.

New applications, including use of social media, may require file publishing.  Cloud storage allows you to store training videos, and make them easily available at every end user in the company.  Tagging and search offers new application capabilities, and new opportunities to support existing compliance requirements.  Secure file sharing, versus file publishing, may be a significant requirement as you work with customers and business partners.  Partner, customer and employee portals can reach new levels of capability with API accessible cloud storage, as the availability and the management of information is delivered via the cloud.

Our observation is that the early adopters have begun the move to cloud storage.  Why?  Simply, enterprise private cloud storage allows you to gain many of the benefits and set aside the security and data integrity concerns of public cloud storage.  At the same time, data tiering and private and public could solutions will drive "hybrid" cloud approaches that will allow the enterprise to exploit the best of both worlds.  In an upcoming post, we will offer up some tools to examine the cost and the benefits of cloud storage for the enterprise. 

It is a little difficult to discuss an article like What's a Hybrid Cloud and Where Can I get One? without at least agreeing upon some sort of definition.  We've already heard many of these definitions, but I'm not sure they're good enough.  Note: we did try to define the term hybrid earlier, as part of our Cloud Storage Maturity Model.

Well, what is it? 

First, let's look at the textbook definition of the word hybrid:

A hybrid is the combination of two or more different things, aimed at achieving a particular objective or goal.

A "hybrid car" has both an electric motor and an internal combustion engine, and the combination of the two serves to propel your automobile while providing a more efficient use of fuel.  So, a hybrid cloud is a combination of a public and a private cloud, aimed at providing a common cloud computing experience.

But for what purpose?  Hybrid computing clouds provide cloud computing that delivers the appropriate offerings with provisioning, pay-as-you-go for relatively limitless capacity, and improved security, and some would say at a lower cost than an internal cloud. Hybrid clouds can and do offer the opportunity to provide baseline processing within your own facilities, and use service providers for peak requirements.  By doing this, they can lower the cost versus private cloud computing. 

I've seen some hybrid cloud definitions that include edge or gateway devices, but I do not think that is definitive for hybrid cloud.  Now, with this definition, we can sort out what a hybrid cloud actually delivers.  In general, the argument that a multi-tenant public cloud is lower cost (on an absolute cost basis) than a private cloud is hogwash, in my experience.  I have seen examples of all of these, and in the case of a large enterprise, they may very well run private clouds for their own use that cost less than what they can buy the resources for on an open market basis.  (Now, before the switchboards light up with capex versus opex and idle resource arguments, I want to assure you that even taking these issues into account, the theory holds water).  This still begs the question as to what purpose does hybrid cloud serve?

In its most general case, the business value of hybrid cloud lies in its ability to bridge the gap between baseline computing and peak computing, assuming all things are equal or if not equal, at least acceptable (in terms of security and other incremental costs associated with hybrid cloud).  Otherwise, why go to the trouble?

There are other examples that are associated with backup and disaster recovery versus cost that also can be of high value with a hybrid approach, particularly if you only have one data center.  I store my backup locally, in case I need to do a speedy recovery.  I store an encrypted copy remotely, at a service provider, for DR purposes.  Voila!  Low cost, secure, multiple requirements solved.  Hybrid, it's a beautiful thing.

The hybrid cloud can also allow you to "bridge the gap" if you are in a data center bind, i.e. out of space or between build-outs.  This is a special case of bridging the gap.

Where can you get this, now? 

This is exactly our game plan (at Mezeo), and working with backup and archive providers, as well as Mezeo-based cloud storage service providers, and Mezeo private storage clouds for the enterprise, we deliver this solution today - in a matter of days and weeks, not months!

Cloud Storage Strategy interviewed Gladinet co-founder Jerry Huang on cloud desktops, cloud gateways, and his company's business model. 

[NOTE: Gladinet is a customer of Mezeo Software.]

Cloud Storage Strategy recently interviewed Layered Tech CEO Jack Finlayson on the economic benefits of cloud computing, the downturn, and virtual private data centers for the enterprise. 

NOTE: Layered Tech is a customer of Mezeo Software, the underwriter of this blog. 

Layered Tech has obviously focused on building a trusted infrastructure for customers.  How do you sustain that trust level?

As customer requirements and expectations continue to change, we've evolved in order to handle more detailed and complex requirements. We continually evaluate every aspect of our IT infrastructure and network to ensure we have the appropriate resiliencies and protections in place. We also take pride in our culture of continuous improvement in all aspects of customer service; it's the best way we can support our customers.

This is why we're here - to manage our customers' infrastructure so they can concentrate on their business.  From the beginning, it's all about providing superior levels of customer support. When we begin a new customer relationship, we learn the customer's specific business needs and provide counsel on the best infrastructure solution to best support those needs and meet overall business goals. 

This is how we've built our reputation as a trusted provider with our customers around the globe, and our customers know they can count on Layered Tech for the highest quality infrastructure solutions and service.  With seven top tier data centers on three continents, we deliver secure, scalable and ultra-reliable solutions for IT infrastructure that support even the most complex enterprise requirements. 

We also maintain relationships with leading technology partners and keep up with our extensive certifications to ensure that we have the resources and expertise to deliver the best in managed dedicated hosting, cloud computing services and cloud-based storage.

Has the economic downturn helped accelerate the migration to cloud based data centers? 

Absolutely. The economic downturn has forced almost everyone to do more with less, which is why more companies are turning to cloud computing. 

Increased scalability and flexibility and a pay-per-use model creates a more cost-effective and agile infrastructure solution.  Customers leveraging Layered Tech's cloud computing and virtualization solutions reduce capital and operating expenses while enabling IT staff to focus on higher priority business needs rather than their infrastructure. 

Customers can also choose from a range of support options from Layered Tech's tiered managed services, ranging from the highest root-level access down to the lowest self-managed option with varying levels in between.  It's all about helping them to be flexible and do more with less.

Can you explain what the Virtual Private Data Centers (VPDC) platform service is?  Is this a flavor of the cloud computing model that people have been talking about?

Sure. We pioneered Virtual Private Data Centers - or VPDCs - which offer enterprise-class security, choice and flexibility.  It's a hybrid approach that gives customers dedicated, unshared resources in their off-premise cloud infrastructure rather than placing their data into purely public clouds.  VPDC platforms and private clouds are becoming popular cloud computing approaches for enterprises because they provide more control and security than public cloud offerings.

Whether it's an "internal private cloud" created and maintained by the enterprise's IT staff and housed within its onsite data center, or it's an "external private cloud," where the enterprise engages with a third-party hosting provider like Layered Tech to develop and operate a private cloud within one or more of the hosting company's data centers, enterprises want to have their own cloud infrastructure.  In other words, we believe that enterprises will not want clouds with shared resources, like those that exist in purely public cloud environments.

So, with the VPDC, customers gain the on-demand scalability of the cloud with all the reliability and security of dedicated servers.  The integrated virtualization platform also offers levels of managed services, security and flexibility via a proprietary API that were previously unavailable in an integrated offering. 


We created a maturity model for cloud storage just a few weeks ago. Can you tell us if it matches with your experience in the industries you serve?

Yes, it does. We believe that 2010 will be the first meaningful stage of cloud computing's rocket-ride of growth and enterprise usage, and it's all fueled by the need for further operational and financial improvement.  We've found that enterprises are seeking cloud computing benefits such as lower costs, higher productivity, greater speed to market, and near-instantaneous scalability of computing resources. 

It's important to note that CIOs now have an easier time showing their CEOs and CFOs the value of migrating to cloud computing and virtualized environments, especially considering the competitive advantages they create. The investment required to migrate to the cloud alone generates immediate short-term value, while also delivering long-term upside.  

Like your cloud storage maturity model, we think that custom migration plans and hybrid approaches to cloud computing also will be an emerging trend in 2010.  Enterprises will evaluate business drivers and align technology solutions to their corporate needs more closely than ever before.  The result will be the growing adoption of a hybrid approach, where a portion of the IT infrastructure stays in the physical, dedicated server world, while the remainder migrates into the cloud.

Finally, can you tell our readers about LT Depot, your cloud storage solution?

As you know, we just launched our new cloud storage solution called LT Depot, which is powered by the Mezeo™ Cloud Storage Platform.

LT Depot allows you to create and select scalable, reliable, and secure storage for your application and service needs. If you need storage for images, videos or critical documents without significant capital expense, LT Depot is your answer.

Not only is LT Depot designed as a robust and reliable storage avenue, it provides customers the extended advantages of sharing and collaboration. This provides features such as access, create, manage, and edit documents and files no matter where your users reside -- even from their mobile devices. Whether your team exists in one office, or multi-site locations around the world, stay connected and work together seamlessly and efficiently.

We see a lot of coverage about cloud storage these days - and why it is or is not being adopted. One way to look at cloud storage adoption is to view it as an evolutionary process which changes over time, as both the organization matures and becomes adept at leveraging the new technology, and as the technology itself evolves to meet the real needs of the end-user.  The common name for this sort of thinking is a "maturity model."

With that in mind we developed this simple maturity model for cloud storage, based on the actual cloud storage adoption process we're witnessing in the industry. We'd like to hear your thoughts - are you seeing the same trends?


PHASE ONE: Public Cloud Storage

Description
There remains significant marketplace confusion about what constitutes cloud storage.  Cloud storage is a persistent storage for unstructured data accessed via Web services APIs over a network (LAN or WAN), with the additional  characteristics of rapid provisioning of both new accounts of any size as well as rapid provisioning of increases (or decreases) in account size, along with a pay for use model, Some believe that cloud storage is just the provisioning and pay for use model with access method being varied between older technologies (CIFS/NFS) and http (Web services API access).  Public, multi-tenant storage clouds as delivered by service providers clearly meet our definition, as traditional access methods like CIFS/NFS are not useful over the Internet.

Many technologists and almost all non technologists, make the initial mistake that cloud storage is simply the storage used when using cloud computing.  In fact, a cloud computing image (CCI) may very well be provisioned and stored when not in use on traditional iscsi type storage systems, and is often dependent on very high speed access associated with a locally attached device.  Many times, the data needed for the application supported by the CCI is often stored on shared storage devices within the same data center as the CCI, for application performance reasons.  The data for these CCIs may also be block, or data base data.  This is storage for cloud computing, but it is not "Cloud Storage"!  This confusion permeates the marketplace in Phase One.  Many vendors, particularly traditional storage vendors, have confused the marketplace by claiming to be cloud storage based on "thin provisioning" attributes with traditional data center access versus HTTP access. Cloud storage may also be accessed and utilized by CCI based applications, but that is not a defining attribute of cloud storage.  Cloud storage is accessed by applications on both CCIs and dedicated servers, as well as clients on PDA's and PC's, wherever they are and whenever they need access.  The use cases are very tolerant of the latency associated with the Internet. The thin provisioning and pay for use model of cloud storage does deliver the important cloud storage attribute of transferring storage costs from a CAPEX to an OPEX basis, if you are acquiring your cloud storage form a service provider on a pay for use basis.

 The IT service provider space is the earliest adopter of cloud storage, for both offensive and defensive purposes.  Many service providers are hosting workloads on dedicated or virtual servers (CCIs), and the workloads are new applications that utilize cloud storage from companies like Amazon S3, Rackspace Cloud Files, Nirvanix, and SoftLayer CloudLayer. Since the amount of data can be very large, it is difficult to move without downtime. And since the processing is relatively easy to move, IT service providers recognize the need for their own cloud storage service in order to provide a complete offering to their customers and to promote retention.  Without the associated cloud storage, the application server workload can easily move, usually to the provider who provides the storage cloud.  This is the defensive argument for service providers to offer their own storage cloud.  On the offensive side, cloud storage is growing rapidly in terms of adoption, provides a new revenue stream, can attract new hosted workloads (cloud or otherwise), and drives increased (and very profitable) bandwidth use.

The web hosting industry also saw the initial development activities associated with adoption of Web services APIs, which provide many programming capabilities that are now resident in the storage, and easily enabled new applications that are delivered via the Web.  These services, including tagging, searching and filtering, sharing, publishing, and collaboration, all exist within the APIs of a storage cloud, and are easily implemented within the application.  While the enterprise has not yet adopted this new functionality, it has become quite pervasive within social networking apps, enabling new apps on mobile devices, file sharing services, and online file services, and backup and archive services.

Cloud storage is currently offered by only a few service providers including Amazon (S3); SoftLayer (CloudLayer); Rackspace (CloudFiles), Nirvanix, and is only available as a service.  Enterprise adoption is limited to development only, primarily testing, and enterprise adoption has not yet occurred, primarily because of security concerns.

Key attributes

Adoption Drivers:
Business drivers: low cost, rapid scalability and on-demand capacity
Technology enablers: New programming capabilities

Adopters:
- SMBs/ SMEs
- Developers
- Consumers

Use Cases:  
- Testing and application development
- SaaS (Consumer & SME/SMB users: Backup, file sharing, additional device storage, rich media)

Differentiators:  
- SLA variability
- Pricing elements

PHASE TWO: Public & Private Cloud Storage

Description: As large enterprises start to fully comprehend the benefits of cloud storage, their interest grows.  While security concerns keep them from adopting the public cloud, they begin building private clouds behind their firewall. A private cloud provides them with the level of control and security that they are comfortable with and improves the utilization rates of their existing storage infrastructure, because of thin provisioning and potential for technology reuse. Enterprises start to roll out advanced capabilities such as file sharing and collaboration to their employees and their partners. The initial use of storage cloud services allow the enterprise to begin initial development of storage cloud based applications.  They also start to move backup and archives into their  own clouds. Since these applications do not require the highest performing storage, enterprises are able to reuse decommissioned hardware. This effectively starts the process of "tiered storage." 

At the same time, the public cloud storage offerings continue to grow.  The availability of deployable solutions to create your own storage cloud begin to arrive in the market, enabling IT service providers to quickly implement storage clouds versus being faced with a roll your own development effort.  Public storage cloud service offerings become more pervasive and better accepted as security and awareness increases.

Key attributes (Private Cloud Storage)

Adoption Drivers:
Business drivers: low cost, rapid scalability, high security and control
Technology enablers: new programming capabilities, cloud gateways (such as Blue Thread, Entropy)

Adopters:
- Enterprises

Use Cases: 
- Application Development
- Testing
- Backup
- Archiving
- File Sharing and Collaboration

Key attributes (Public Cloud Storage)

Adoption Drivers:
Business drivers: Low cost, rapid scalability, on-demand capacity
Technology enablers: new programming capabilities, cloud gateways generating multi-cloud usage

Adopters:
- SMBs/SMEs
- Developers
- Consumers
- Enterprise Evaluators

Use Cases: 
- Testing and application development
- Backup
- SaaS (Consumer & SME/SMB users: Backup, file sharing, additional device storage, rich media)
- Personal cloud storage with access clients
- Backup and archiving using cloud gateway
- Special use cases enabled by cloud gateway
- File server replacement
- Availability of CIFS/NFS access within the data center

Differentiators: 
- SLA variability
- Pricing
- Scalability and performance
- Access options

PHASE THREE: Public, Private and Hybrid Cloud Storage

Description: The maturity of the cloud (both private and public) has enabled many new applications which now require all the advanced services of a storage cloud (Web services API access, tagging, search, sharing, collaboration, etc).  Capabilities such as Geo Access (accessing files from a repository closest to the requester) and Geo Replication (policy driven replication across geographies to facilitate disaster recovery) are realized.  As Internet latency is constantly improving, more and more applications become "cloudy" in terms of storage, and cloud location becomes slightly less important as associated with performance.  Cloud storage is now a requirement of developers and development platforms.  Most SaaS applications also expect the availability of cloud storage.  Everyone is storing everything!  Most importantly, the improved security in public storage cloud offerings begins to blur the distinction of importance of security as being where data is stored (in public or private clouds).  Instead, applications utilize both public and private clouds, for reasons associated with location of data, disaster recovery and backup, and CAPEX versus OPEX.   Only the most sensitive data still retains a private cloud requirement.  Performance is a more salient driver of where the data is stored, does it need to be on a LAN in the same data center as the application?

This use of both public and private clouds as solutions for storage, often by the same application, becomes what we refer to as the Hybrid Cloud.

Key attributes (Private Cloud Storage)

Adoption Drivers:
Business drivers: Low cost, high security and control, rapid scalability, compliance and forensics
Technology enablers: New programming capabilities, cloud gateways
 
Adopters:
- Enterprises

Use Cases:  
- Application development
- Backup
- Archiving
- File sharing and collaboration
- Geo access

Key attributes (Public Cloud Storage)

Adoption Drivers:
Business drivers: low cost, rapid scalability, on-demand capacity, clouds become more pervasive
Technology enablers: new programming capabilities, cloud gateways generating multi-cloud usage

Adopters:
- SMBs/ SMEs
- Developers
- Consumers
- Enterprise evaluators

Use Cases:  
- Testing and application development
- SaaS (Consumer & SME/SMB users: Backup, file sharing, additional device storage, rich media)
- Personal cloud storage with access clients
- Backup and archiving using cloud gateway
- Special use cases enabled by cloud gateway
- File server replacement
- Availability of CIFS/NFS access within the data center

Differentiators:
- SLA variability
- Pricing elements
- Scalability and performance
- Access options
- Multiple clouds vs. single cloud

Key attributes (Hybrid Cloud Storage - a mix of Public and Private Cloud Storage)

Adoption Drivers:
Business drivers: lowered average cost obtained via a mix of public/private cloud, reduction of DR/BC costs, optimized mix of capex and opex
Technology enablers: improved security

Adopters:
- Enterprises

Use Cases:  
-  Incorporates use cases for private and public clouds

Differentiators:
-  SLA variability
-  Pricing elements
-  Scalability and performance
-  Access options
-  Multiple cloud vs. single cloud

PHASE FOUR: Federated Cloud Storage

Description: With the advent of greater security, flexibility and interactivity, users will demand applications that provide real time dynamic interaction within their supply chain. Regardless of where their data may reside, partners, customers, employees and consumers will want a seamless, transparent access capability. Enter the Federated Cloud. Through a common management layer, Federated cloud will connect private and public clouds exposing all storage as a single name space. Through federated identity management and creation of trust relationships amongst various vendors and enterprises, authorized users (human or programmatic) will be able to authenticate to their cloud and be able to access information that resides anywhere across the globe. Excess capacity will be easily pushed over a grid and be sold and consumed as a true utility. Ultra-high utilization rates will be achieved, and within the trust circle security and compliance requirements will be defined and met. Interoperability will be ensured by continued maturity and standardization of APIs and applications.

This truly will culminate in a meaningful internet of knowledge and commerce.  The "Semantic Web" has arrived!  Note that, for matters of very high security, agencies and enterprises will continue to use private clouds.

Key attributes (Federated Cloud Storage)

Adoption Drivers:
Business drivers: need for real time dynamic interaction with partners/customers on different clouds, ability to sell excess capacity within the trust circle, optimized infrastructure utilization, establishment of trust relationships
Technology drivers: federated authentication and provisioning across clouds, streamlined cross-cloud management, standardized APIs  
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Adopters:
- Service providers
- SMEs/SMBs
- Consumers
- Enterprises

Use Cases:  
- Supply chain management
- Ad-hoc capacity capacity enhancement
- Non-sensitive and sensitive data hosting

Differentiators:
- SLA variability
- Pricing elements
- Scalability and performance
- Access options
- Security
- Governance and regulation compliance

Based upon our experience in the marketplace, a large majority of the organizations are still in the first two phases. There is an undeniable appetite by the early adopters to be at the forefront, however, unlike many other emergent technologies, cloud storage comes equipped with a very compelling economic model and that is really helping justify the move into the cloud.

There are relatively few options for early adopters to implement private clouds that deliver the appropriate capabilities.  This is why Mezeo focused on a deployable platform versus only offering cloud storage as a service.  With the deployable platform, enterprises can implement their own in house cloud, and also take advantage of a "private" cloud hosted on their behalf at a service provider.  See my discussion of this topic in my post: Cloud Storage for the Enterprise - Part 2: The Hybrid Cloud

In summary, those of us who hail from the IT service provider industry are very comfortable with cloud storage.  We see the adoption as proceeding, and the issues are being knocked off as they arise.  We are in an early technology cycle but with innovative early adopters we see a bright future.

According to a recent Gartner press release, 20% of businesses will own no IT assets by 2012:

Several interrelated trends are driving the movement toward decreased IT hardware assets, such as virtualization, cloud-enabled services, and employees running personal desktops and notebook systems on corporate networks.

The need for computing hardware, either in a data center or on an employee’s desk, will not go away. However, if the ownership of hardware shifts to third parties, then there will be major shifts throughout every facet of the IT hardware industry. For example, enterprise IT budgets will either be shrunk or reallocated to more-strategic projects; enterprise IT staff will either be reduced or reskilled to meet new requirements, and/or hardware distribution will have to change radically to meet the requirements of the new IT hardware buying points.

This is a bold statement. If we believe Gartner, it means that we are at the beginning of an explosion in cloud-based services managed by trusted providers on behalf of the enterprise. Of course not all businesses will choose this path, but a substantial number of industries can and will. As I blogged about earlier, the message from the CFO office is clear. We will see adoption rates rise dramatically as the benefits of cloud services become more obvious to business leaders.

A second point of interest is the prediction that by 2012, India-centric IT services companies will represent 20 percent of the leading cloud aggregators in the market (through cloud service offerings).

Here’s the take-away:

Gartner is seeing India-centric IT services companies leveraging established market positions and levels of trust to explore nonlinear revenue growth models (which are not directly correlated to labor-based growth) and working on interesting research and development (R&D) efforts, especially in the area of cloud computing. The collective work from India-centric vendors represents an important segment of the market’s cloud aggregators, which will offer cloud-enabled outsourcing options (also known as cloud services).

We are witnessing examples of what GE innovation consultant Vijay Govindarajan calls reverse innovation in IT. Natarajan Chandrasekaran, the CEO of Tata Consultancy Services notes:

I’ve seen the new cloud-based computing models for applications and processes gaining currency in emerging markets. Rural cooperative banks and small and medium businesses in India are actually far ahead of their western counterparts in adopting these models. In fact, companies from emerging markets, buoyed by strong domestic revenues and revival in growth, have been making adjustments to their global strategies and fine-tuning their investments in order to be part of the recovery process in the west and build on their global expansion plans.

As the enterprise embraces the cloud, they’ll need a maturity model to help them on their journey. My next post will explore what the maturity model for cloud storage looks like. 

The Parallels Summit has been very successful for Mezeo, with excellent booth traffic, a number of leads and we still have this afternoon to go. Our business development and partner discussions have also been productive.

Why blog about this? Because this is representative of two secular trends in the hosting industry. First, the industry is maturing, the business issues are more compelling and the opportunities and the vendors are more serious and engaged. Second, the interest in the cloud and cloud storage is at an all time high. It’s really that simple and that visible.

A recent report by Forrester's Andrew Reichman titled Business Users Are Not Ready For Cloud Storage: Current And Planned Adoption Of Storage-As-A-Service Is Minimal For Now paints a picture for cloud storage adoption, that at first blush, is not encouraging.

He states:

In Forrester's Enterprise And SMB Hardware Survey, North America And Europe, Q3 2009 survey, we asked businesses about their interest in "hosted storage capacity" offerings. Interest was minimal at best. Forty-three percent of all respondents said that they were simply not interested, and another 43% said that they were interested but had no plans to move forward.

While it could be argued that as a cloud storage supplier, I am necessarily bullish about the ultimate prospects, I believe the data is actually quite good and clearly represents what we are experiencing in the marketplace.  Now, Mezeo is engaged with many service providers, as well as the early adopters in the enterprise space as they begin their evaluations.

When I look at enterprise cloud-storage adoption based on Everett Rogers' diffusion curve I see a pretty clear view of the typical market place approach to adoption of disruptive technologies:    

For new, emerging, and potentially disruptive technologies, we should look for what the next practices are, i.e. the practices of the innovators and early adopters. The survey reflects the typical technology adoption cycle and re enforces what we are experiencing in the market place.

11% of companies are taking the plunge - these are the early adopters and innovators.  The early majority (43%) is interested, and watching.  The late majority is not in the game, yet.

So we are on track. And to prove it, let's look at one of these enterprise-level innovators: General Electric.

According to IBM storage expert Tony Pearson, GE has implemented cloud-based backups and archive for GE Corp, NBC Universal and GE Asset Management divisions running at only 32 cents per GB/month, representing a 40-60 percent savings over their previous methods. This includes backups of their external Web sites, archives of their digital and production assets, RMAN backups including development/staging databases. They plan to add out-of-region compliance archive in 2010. They also plan to monetize their intellectual property by offering "CloudStorage Manager" as a software offering for others.

1. Security will continue to be a big issue for the cloud, and, unfortunately, there will be at least one event this next year that is disruptive to Cloud Storage adoption, be it data loss or unauthorized data access.  Security will be an even more important point of evaluation for the use of specific Cloud Storage service offerings. The “trusted service provider“  becomes a requirement when selecting a cloud offering.
   
   
2. Cloud Storage will be characterized by a single word, “more”!  More adoption, more cloud storage offerings by more IT service providers, more variation in cloud capabilities, and more worries and concerns about the cloud.
   
   
3. The intersection of enhanced mobile devices with better wireless bandwidth will be combined with Cloud Storage to create exciting new work/life blended digital life applications. The user experience is of paramount importance.
   
   
4. Cloud Storage will see extraordinary adoption as a solution for backup, archiving and for policy-based georeplication for disaster recovery.