Postcards from the Cloud Summit Executive conference

I'm just now getting back from a full day in Mountain View at the Cloud Summit Executive conference. And if there were themes that summarized the day, they would be "it's all about the business impacts" and "integration of services will be critical."

The conference was sponsored by TechWeb, and hosted/moderated by the experienced MR Rangaswami Co-Founder of Sand Hill Group. The crowd was around 300 folks, just small enough that you could network w/interesting people during the generous lunch/coffee breaks -- nice schedule design. And, while some of the vendor/presenters were definitely commercials, some of the content in the general sessions was really worth the price.

The day opened with Tom Hogan, SVP from HP. Although the talk was (of course) vendor-centric, he did a really nice job of summing-up the challenges IT faces (nearly 85% of budgets going toward "keeping the lights on"), and yet identifying the business opportunities that the "cloud" will enable. Most notably these were spawning opportunities for smaller businesses, including enabling certain departmental-scale projects in larger orgs. The cloud, according to Tom, was just another channel for deploying business services -- not a panacea. Use it as part of your portfolio mix.

Next was a panel moderated by Bruce Richardson of AMR research on "selling the crowd to Wall Street and Main Street. It included Bryan McGrath from Credit Suisse, Robin Vasan from the Mayfield Fund, and Jeff Koser, business author. Again, the tone was decidedly business-focused, with little discussion of technology (in contrast to SDForum, a few weeks earlier). There were some great tidbits within the discussion on how to design a resilient business/model based on using cloud infrastructure -- plus entrepreneurial tips anyone should use (Focus on how to attract customers; maintain a super-low cost-of-sales, and a very scalable sales channel; keep price of product under $50k; ensure a "sticky" product with recurring revenue, etc.)

Later in the afternoon was a very thoughtful presentation/discussion from Vishal Sikka, CTO from SAP. His opening slide:

Where we are: Power, Infrastructure, Operations
Where we want to be: Integration, Integrity, Elasticity

First, he said, businesses are missing "integration", especially between critical applications; cloud computing could make this worse -- but there are initiatives to improve on this. Problem is, they won't happen over night. On "Integrity" he also pointed out that data integrity today is in fact fragmented -- and again, the cloud could make this worse before it improves on things. And finally -- the topic near to my heart -- "elasticity". Vishal strongly said that elasticity (of compute capacity) HAD to be delivered for all apps of all types, and for DBs as well. And he cautioned: Infrastructure will be permanently heterogeneous. Plan for it.

The other Achilles heel for the cloud, he said, was compliance. It's all about transparency and control (distinct from security). Although companies have been outsourcing for years, the "cloud" still needs ways to provide logs, tracking, compliance tools, etc. [sounds to me like a business opportunity...]

Later in the afternoon (after a good networking lunch, complete with Red Bull on ice!) was what I thought was the best panel of all: "Understanding enterprise requirements for the cloud". It was moderated by David Berlind at TechWeb, with Art Wittmann of Information Week -- and featured two diametrically-opposed perspectives on IT: Carolyn Lawson, CIO from the California Public Utilities Commission, and Anthony Hill, CIO from Golden Gate University.

First, Art covered high-points of a recent report on Cloud Computing by InformationWeek: 62% of respondents still had no interest (or not enough info) to consider cloud computing at all. Of those considering clouds, there "likes" included meeting user demand and scale, and avoiding huge capital outlays. But their "fears" were expected: Security, Control, Performance, Support, and Vendor Lock-in.

But then the real great part of the panel began. Carolyn Lawson of CPUC ran a government IT operation. Data was highly sensitive; new capital and employees were hard to come by (literally approving state approval). She faced stiff legal issues around geography (as it related to where data lives), data liability, and data security. And she literally said "going to a cloud architecture would be like stepping off of a cliff", given her current constraints.

On the other hand, Anthony Hill of Golden Gate University had a completely different set of constraints and drivers. He's outsourced nearly every application the University uses -- to nearly a dozen different SaaS providers -- and keeps incremental user costs nearly at zero. He has only a small staff, and has avoided huge capital and operational budgets, while supporting the strategic needs of the business to provide an "online university" environment. To be sure, he has challenges too: very high vendor risk (what if they go out of business? what happens to my data?); very high switching costs (how do I migrate my data?); and, the fact that today, he's doing ALL of the inter-application integration himself.

But the big take-away from this interaction was that it is clear that for some businesses, the "cloud" is a godsend -- but for others, it will make almost no inroads in the foreseeable future. Conclusion: Look at the business needs first, before assuming that technology solves all.

A final note: conferences like this are invaluable for their networking opportunities, and TechWeb had a good mix of content (but please try to reduce the "commercials" in the future), small size, break-outs and long breaks. The audience was qualified, too; lots of CEO and "office of the CTO" on badges, etc. My buddy and Yoda-of-the-Blog James Urquhart was there too, as-was a generous quantity of VCs who traveled a few miles from Sand Hill road.