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Thought Leaders In Cloud Computing: Fred van den Bosch, CEO Of Librato (Part 4)

Posted on Friday, Aug 6th 2010

By guest author Shaloo Shalini

SM: Based on your estimates on utilization rates and patterns, do you see IaaS as a replacement for or complementary to existing infrastructure?

FB: I think it depends on the size of the organization. Many small and mid-sized companies will probably choose to not have their own IT infrastructure. I can speak for my own company. I would prefer not to have an IT infrastructure in-house.

For a larger organization, it is probably different because it is mainly a matter of economies of scale. If you see infrastructure-specific services, those are just providing shared infrastructure. Shared infrastructure is more efficient because you can deal more easily with peak load situations. You don’t have to have, on average, as much spare capacity as you otherwise would. So it is more efficient. If you have a large enough internal IT infrastructure, you can probably compete fairly well with clouds in terms of efficiency. For a larger organization, infrastructure clouds are going to be complementary to their own IT, at least for the foreseeable future.

The smaller and mid-sized organizations may decide to just not have internal IT because they can get better economies of scale through public infrastructure clouds.

SM: For a small, mid-sized, or large organization, how does the size of the IT organization shrink as a result of cloud computing?

FB: Well, I think it is very difficult to give a generic answer to a question like that. Again, it is going to depend heavily on what an organization has today in terms of IT infrastructure. Some companies are IT intensive, whereas others are not. It also depends on what part of IT organization is dealing with the physical infrastructure. With cloud-based infrastructure, you still need IT people to manage higher-level IT functions. For SaaS and PaaS, it is a different matter. If you use IaaS, you still need the IT because it is essential if you are to provision your own data center that is built out of virtual objects instead of physical objects. So what you get rid of are a lot of your physical space requirements and functions such as operating the physical data center in terms of power and cooling and things like that.

Though the physical operation and administration of the hardware goes away with IaaS, you still have your own virtual server resources within the public cloud infrastructure service that you need to manage. You still need to deploy your own applications; you still need to do many of the things that you are doing today. I would not expect that this change would shrink the IT organization such that it would become a tenth of what it was before. But it should shrink. It would bring down the capital investment required. It would make a much larger part of the infrastructure a variable expense that was earlier a fixed expense.

SM: As companies’ infrastructures are increasingly being handled in the cloud, what are your thoughts on the evolution of the data center?

FB: I would expect, specifically for small and medium-sized organizations, that as they evolve many of them might choose to have no internal IT or physical IT infrastructure at all. I still would expect that many of them, the smartest ones, will also try to use SaaS and PaaS rather than have an IaaS because that still gives them a data center. The question is, what function would they want to run in a data center that they couldn’t run in a public cloud? That is going to be heavily dependent on the type of company you are. If your need is to have capabilities that are not available as a SaaS or PaaS, you would still need an IT infrastructure.

SM: Can you give me an example of a function that you cannot run in cloud today?

FB: There are probably applications or sort of line-of-business-specific features that would not run in a cloud. Anything that is custom-written software would not run as a SaaS or PaaS cloud. It would have to run on common infrastructure clouds within the organization. So if I write my own software for doing analytics on the big streams in my website and I have very specific requirements, or if I am a financial services company and I run specific custom-written software, I can’t find anybody out in the cloud who will do the same thing for me as the software or platform service.

SM: I see.

FB: Well, if I am just a retailer selling furniture, everything I need in terms of SaaS I can probably find in the SaaS cloud, and I would not need my own data center nor be customer of IaaS.

[Note to readers: Here is an interesting report by Neil Roiter on the cloud and IT staffing.]

This segment is part 4 in the series : Thought Leaders In Cloud Computing: Fred van den Bosch, CEO Of Librato
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