HP SVP: Cloud Computing Is 'Real, Disruptive'

By Thomas Claburn, Information Week, October 15, 2008, 11:30

As befits its name, cloud computing is somewhat amorphous. But it's no less real for its lack of clear boundaries.

At the Cloud Summit Executive conference on Tuesday, at the Computer History Museum in Mountain View, Calif., M.R. Rangaswami, co-founder of Sand Hill Group and host of the conference, said he had found 25 definitions for cloud computing. He didn't say whether Oracle Corp. (Nasdaq: ORCL) CEO Larry Ellison's definition -- that cloud computing is industry marketing gibberish -- was among them.

Rangaswami's aim for the conference was to help the tech industry arrive at a better understanding of what cloud computing is and is not. Toward that end, he invited Thomas E. Hogan, senior VP for Hewlett-Packard Co. (NYSE: HPQ) software, onstage to present Hewlett-Packard's view of cloud computing in the enterprise.

Hogan recounted how his wife, after seeing him prepare for cloud computing presentations, finally asked him, "What is cloud computing and do I need to be scared?"That's a question on the minds of many IT executives.

"The cloud is real," Hogan assured the audience. "It's disruptive." At the same time, it's not a panacea, he said.

For Hogan, cloud computing offers a way for enterprises to make IT a source of business innovation. For too many companies, IT budgets are 80% maintenance and 20% value creation, he suggested. "Most aggressive CIOs want to get to 80% innovation and 20% keep-the-lights-on, which is the opposite of today," he said.

Hogan observed that many now argue that IT should be called BT -- "business technology" rather than "information technology" -- because it has become so critical to the success of businesses today.

HP is betting big on cloud computing. Its $12 billion purchase of Electronic Data Systems Corp. (EDS) (NYSE: EDS) shows that the company is serious about infrastructure as a service. So too does the HP, Intel, and Yahoo Cloud Computing Test Bed, announced in July, not to mention its recently formed Scalable Computing & Infrastructure Organization.Cloud computing, Hogan insists, is a "very real paradigm shift for the industry."

It's a shift being driven by the increasing complexity of technical systems and the relentless growth of data that must be managed.

Some 87 billion e-mails are drafted per day around the globe, the digital universe doubles every 18 months, and the number of network-attached storage devices double every two years, he said.

Yet, some 80% to 85% of IT budgets go to operational maintenance. That's a problem, Hogan insisted.

Though there are challenges in moving to a multitenancy model, in security, in availability, cloud computing promises to help IT organizations dial back maintenance costs so they can spend on creating business value. The assumption here is that cloud computing services cost significantly less than traditional enterprise applications."This platform will spawn a huge up-tick in innovative, more niche-oriented services that then allow the CIO ... to shop for services that address business needs and get them very quickly deployed across the organization," Hogan said.

At the same time, traditional on-premises computing will remain essential for large enterprises. "The world won't be 100% cloud in five years," he said.

Cloud computing is good for many applications, not for all of them. A portion of the enterprise technology portfolio will still be optimized around on-premises computing for many years to come, he said.

The challenge for enterprises is to find a way to start adopting cloud computing prudently. "Don't jump in with both feet," said Hogan, "but don't stand on the sidelines and watch."

While Hogan's assessment may not have entirely clarified cloud computing for skeptics, it nonetheless conveyed a sense that there's something worth watching in the mist.To further understand how HP and other companies large and small are approaching cloud computing, InformationWeek has published an independent report on the subject. Download the report here