DMR: That’s an interesting view, because I think most of the telecoms are looking at one level higher. They say: “we have so many industries and verticals – we have banks, we have oil companies, we have manufacturing – how do we provide a platform for all industries? Telecoms are often organized in industry lines, and now every industry line is thinking about which platform they I offer on or in the Cloud.

Lew Tucker: There absolutely will be vertical, industry-specific plays, but if you start with a basic Infrastructure-as-a-Service platform, you aggregate all of your customer demand and can pass the cost advantages you get in scale down to your customers. This is what makes cloud computing different from the older hosting model which unfortunately inherited all the complexities of traditional data centers, and therefore all of the cost.

DMR: So, where is that all going?  Let’s say we meet again in ten years or way in the future…   

Lew Tucker: One of the more interesting announcements of late has been the US government’s expressed interest in cloud. Vivek Kundra, the federal CIO, has said that many government agencies will use cloud computing. To facilitate this shift, the US government is taking a cue from Salesforce.com's AppExchange site and building an apps.gov site, where government agencies will choose the Cloud services they need. Instead of building or expanding their own data center, government agencies will go to the marketplace and get Cloud computing services to run their agencies. With this initiative, I expect to see a government Cloud forming, which will hold the set of services, data centers and providers that can meet the requirements established by the government. From a global perspective, even the World Economic Forum has expressed interest in Cloud computing and the hope it brings to help the developing world take advantage of the information and services to build their economies. It will be interesting to see if much of the developing world is able to take advantage of cloud computing and entirely by-pass the buildout of private data centers. 

DMR: We saw a couple of companies that had a private Cloud, and it failed. The reason why it failed was because their internal processes for security testing, approval, and setup were very complex.  

Lew Tucker: That is a real threat. Right now, regulatory requirements, existing IT policy, and government requirements were built for traditional data centers that were behind firewalls. They have to be adapted. Forward looking CIOs are recognizing that just as PCs came into the enterprise through a line of business and individual users, Cloud Computing is having an impact in the same way. The sooner CIOs embrace Cloud and recognize the need to look at governance and best practices, and engage the line-of-business people who are using the Cloud the better. CIOs need to become a real partner and trusted advisor for departments who are ready to engage in this new style of computing.  What the enterprise sees is real cost advantages, particularly when the market is now pricing computing at less than 10 cents per CPU hour, 15 cents per gigabyte per month stored. CIOs are now looking at their own data centers and thinking, “How is the market able to provide these things at a fraction of the cost that my own department charges for these services?” The reason is that Cloud Computing strips away a lot of the unnecessary complexity that has built up over time and moves towards a more centralized, standardized model for physical resource management. Then it uses virtualization and self-service to give end-user customers the flexibility they need. This is a win-win for both the IT service provider and the end-user.