There are discussions around whether large enterprises will build private clouds or will there be a fundamental shift of computing power from private data-centers to large datacenters “public” clouds.

Fundamentally this is about specialization of skills and economies of scale. Can private clouds operate at the same economies of scale as huge data-centers providing "public" clouds? In my opinion these large data-centers will be like Wal-Mart, they will be getting electricity at cheap rates, plus they will be getting all other services at volume discount. Also they might be located in countries with better operational efficiencies. Of course this doesn't mean that there will be an end to private clouds i.e. relatively smaller data-centers. These private clouds must serve a niche that is not addressed by large data-centers to stay in business. Most of these private clouds are owned by organizations whose core competency and business focus is things like banking services, brokerage, manufacturing etc. Can business leader at the owner of these private clouds justify to their share holders their investments to keep up in the efficiency race and scale with the big guys in the area that is not their core business?

The economic realities and current market conditions are already forcing some of the financial services firms to look closely at cloud computing.  I recently had a discussion with a CIO at publicly traded financial services firm.  He is open to using cloud computing solution to help him in two ways:

• Provide additional capacity thru cloud to save capital spending on datacenter capacity.
• Provide geographic redundancy without having to invest in two or more datacenters.

Regarding security he mentioned he wants to make sure following three items are addressed.

1. Make sure all the servers in the cloud have properly configured firewalls
2. Make sure there is VPN connectivity for sending data between his company and the servers in the cloud
3. Make sure that the data persisted in the cloud is encrypted so that even if someone gets it they can’t do anything with it

Good news is that the all of the above three are simple to implement manually, the technology is already available and widely used in different areas; in our product we will provide easy to use automated solutions for these.
 

Read the original blog entry...