Cloud or Fog?

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2 December 2010
Bart Narter
Working in the San Francisco, I am not unfamiliar with fog. [caption id="attachment_1936" align="alignleft" width="300" caption="Fog or Cloud"][/caption] It can swirl around you and disorient you, obscuring the reality of what is really happening. I think that the hype around cloud computing is more fog than cloud. What is Cloud computing? From the Celent Report, Cloud Computing, SaaS, and Technology Outsourcing for Banks. We state that cloud computing is the use of computing resources, typically a server or part of a server, over the Internet. To amplify, this means that instead of installing a server on site, a company can take advantage of and utilize a server in some other location without having to manage (or know how to manage) the physical box. This is typically paid for on a per-usage basis over time rather than an upfront fee, meaning that a company could use the server for one hour a day and pay only for that time. In the banking industry we've had "Cloud computing" for thirty or forty years and it is called a service bureau. I am attending HCL's analyst conference in Boston and was gratified to hear another voice blowing against the unrelenting storm of clouds. Vineet Nayar, CEO of HCL stated that he didn't understand what all the fuss was about. He stated that he didn't see anything new on the technology front around cloud computing. There are many new things that are associated with cloud computing: Server virtualization is a big deal, and provided by people like VMWare and IBM. Virtualization enables cloud computing, but isn't new to the enterprise. Enterprises have been using LPARs (IBM's virtual machines on the mainframe) since the advent of the System 370. This is important technology and a big deal. It isn't cloud. We all know that server virtualization will have long lasting implications at large IT departments to increase efficiency and reduce costs. Software as a Service (SaaS) as exemplified by Salesforce.com is a subset of cloud. Software as a Service is when a vendor licenses an application to a client on demand, taking care of the management and maintenance of both the hardware and the software. The SaaS provider may be using the cloud to run its software. This is nothing but a service bureau: firms such as Metavante (now FIS) run software and systems and charge banks by per account per month. There is nothing new here. In a previous blog, I stated that I was won over to the cloud, hearing about banks using salesforce.com for account origination, and customer information. I am still a believer in this. I do believe that banks will continue to use other companies to access information, software functionality, and computing power. They have been doing so for the past thirty years. The term cloud is bandied about with great frequency, but I'm afraid that the reality is that this is more fog than cloud. Use server virtualization. Use the internet to access services from other companies. Call it private cloud, public cloud, or whatever you'd like. Just remember that when you add a lot of hot air to fog, it rises to become cloud.

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