Battle brewing in the cloud

Amazon, better known for peddling books and CDs than selling leading-edge technology, surprised much of the tech world by rolling out, and actually attracting customers to, its version of cloud computing. Sure, there's still plenty of reason to be skeptical -- indeed, cloud computing is one of those technologies that can sound more like a buzzword than a solution to real-world IT problems -- but other players are jumping into the game.

And that's good news for business. Competition will force vendors to keep prices low, improve the technology, and, more importantly, prove once and for all whether cloud computing is more than, well, pie in the sky.

Earlier this week Google launched App Engine, a service to host Web applications. Google App Engine is still in diapers; at the moment, it only supports applications written in Python and only has room for 10,000 developers to use the service. But it's likely to grow. IBM's Blue Cloud will go live later this year, though it's more geared to selling tools to build clouds than to hosting them, and Salesforce.com is beginning to position itself as a cloud vendor with Force.com.

Who's next? EMC.

"We will compete with Amazon," says Joe Tucci, the storage giant's CEO. "There will be an EMC storage cloud; in fact, there already is," he said during a meeting with a small group of reporters at the RSA conference in the US.

EMC's bid for the cloud

When Tucci said that EMC has a storage cloud, he was referring to Mozy, the company's online backup and recovery service, acquired in the buyout of Berkeley Data Systems. Tucci's ambitions go far beyond simple, online backup. "Big companies can't do small things. If I don't see a $1 billion business, I don't go into it," he said.

Like Amazon, EMC's cloud will include both storage and computing resources. The timing of the offering isn't clear, but Tucci, who has broadened EMC's capabilities by buying 37 or so software, document management, and security companies, isn't given to vaporware pronouncements.

EMC's cloud play will focus on businesses through its computing and storage offerings, but the company sees an opening on the consumer front as well.

Driven by the bottomless well of content produced at home by digital cameras, MP3 players, and DVRs, a typical consumer may well have as much as a terabyte to manage before too long.

"If I'm a consumer, I'd rather trust EMC to [secure] my data than myself," says Art Coviello, who manages EMC's security business. That may well be true, but won't IT execs, skittish about losing control of their own data and resources, be a harder sell?

"It's not as if you don't have outsourcing today; it's not as if you don't have a Salesforce.com today," replies Coviello. Fair enough, but rightly or wrongly, many IT execs view those strategies as much less radical than cloud computing.

And remember, we're not just talking about parking data; it has to be securely accessible to a variety of employees, partners, and, in some cases, customers.

Earlier this year, I spoke to Doug Menefee, CIO of the Schumacher Group, which finds temporary staffing for hospital emergency rooms across the country. Menefee is an early, and generally happy, adopter of Salesforce's cloud technology, but he's quick to say, "Single sign-on service and password management were the biggest pain points."

With all due respect to EMC's execs, it surprised me that they weren't more specific in their discussion of security risks in the cloud. Tucci acknowledged that IT managers may well keep the most sensitive data at home and out of the cloud, and said "there's no reason why we can't create a secure cloud." That's nice, but I'd like to hear more. Similarly, Coviello, who has a very thorough knowledge of the threat landscape, was awfully casual, if not dismissive, in answer to questions about the risk to data, saying "I'd never suggest there is a perfect security system."

I'm not suggesting that EMC doesn't care about security. Far from it. But making the cloud acceptable to big-time IT is going to take some serious, and very concrete, thinking.

Security aside, there's another business opportunity here as well -- selling hardware and software to enterprises big enough to build and manage their own clouds. That's exactly what IBM will be doing via Blue Cloud, and Tucci figures that EMC will partner with customers in financial services and other big verticals to do that as well.

The move to cloud computing is obviously gaining some traction, but more than once "next big thing" fell flat when it failed the test of real-world use. I'm not making any predictions here, but keeping an eye on this nascent trend is likely a good idea for investors as well as serious consumers of technology.

(Disclosure: I own a small number of shares in EMC)

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