A few weeks ago, I posted my 2009 Cloud Computing predictions. I already had one of my predictions validated (regarding VC funding – #3) with GoGrid partner, RightScale, receiving $13M in funding this week. (Congrats to them!). So I figured that I would ask GoGrid’s CEO, John Keagy, for his Cloud Computing predictions for 2009. What I received from him is verbatim (I know that I can always count on John to provide solid insight coupled with some humor).

John’s predictions are as follows:

1. Asking “is the Enterprise ready for the Cloud” will be analogized to “the Internet is a fad”
2. There will be some Cloud security breaches that will become super high profile
3. Questioning the security of the Cloud will become less vogue
4. The demand on companies to develop Cloud strategies will be likened to Y2K certification
5. Cloud strategies will be proven to be more important than Y2K certification
6. SAN storage will not emerge as being relevant to Cloud Computing
7. NoHardware.com will illuminate the spirit of the Cloud movement
8. RackSpace stock will claw back to $10.00
9. Al Gore will announce he invented Cloud Computing
10. “Cloud Computing will ______fill in the blank______”

I love the fact that John shoots from the hip with many of these predictions. But there are several points here that warrant a bit more commentary from me (are you surprised?).

1. The “Cloud” is not a fad, nor is “the Internet.” In fact, the Internet, in many aspects, it the largest Cloud Infrastructure out there. Read Reuven Cohen’s post on this subject. So using basic logic I learned in high school: IF “internet is a fad” is a false statement, AND, “the Internet is a huge Cloud Infrastructure” is a true statement, THEN we can infer that “Cloud Computing is a fad” is a false statement. (Not sure how bullet proof my inferences and assumptions are but you should get my point here.)
2. Everyone is holding Cloud Computing under a microscope. Every little “glitch” or “downtime” will be amplified 10-fold. However, I agree that there will be a breach that gets public attention that will cause everyone to step on the brakes a bit, but then move forward as before with “lessons learned.”
3. People love picking apart things that are new. It’s an obvious statement that security is a big deal, within the Cloud or not. So, as the hype dies down, “security” will be just another check box right after “save money.”
4. It is inevitable that as companies restructure from an organizational and financial perspective and undergo drastic re-engineering that Cloud Computing will be one of those technologies that will be forefront in many strategies. John likens it to Y2K compliance – the Cloud must be part of your 2009 strategy for success.
5. Y2K certification was required to ensure that the software/hardware within businesses didn’t collapse when 2000 came around. Cloud Computing goes beyond this because it affects your bottom line and profitability in so many areas. Sure, in Y2K your systems could have collapsed but you didn’t have a choice: you had to comply. With 2009, you not only need survive but also try to squeak out a profit in the process. Y2K was a requirement, Cloud Computing is an optional component to a successful company business and infrastructure strategy. If complying also means survival and profit, then it IS required.
6. Cloud Storage offerings will continue to grow, eliminating the need for dedicated physical storage devices (SANs) within the Cloud. SAN technology itself is old, costly and doesn’t work well with the times. Using a combination of iSCSI/NAS might be a better, more cost effective solution.
7. “Hardware? We don’t need no stinkin’ hardware!” Companies will start recycling (hopefully) their old bare-metal servers (in various creative ways) and will move to the Cloud. Get some ideas on how to “dispose” of your old hardware at NoHardware.com .
8. RackSpace did a few amazing things last year. They had one of the only technology IPO’s in 2008. That is a huge accomplishment (kudos to them). As of this writing, RackSpace (RAX) is trading at $5.73/share. Not too far to go to get back to their IPO price of $12.50. Also, their recent acquisition of companies for more Cloud services is compelling.
9. Wait, didn’t he also invent the Internet? Seriously though, Cloud Computing goes a long way with the Green aspect of computing. There is less power consumed and less computer parts needing to be recycled (as they are virtualized). Save the planet!
10. …be the silver bullet to slow or stop the recession? …enable companies to maintain profitability? …bring government into the 21st century? What do YOU think Cloud Computing will do in 2009?

So there you have it, John Keagy’s predictions (and my 2 cents thrown in at no extra charge). What are your predictions for the Cloud in 2009?

After about a year of Cloud Computing under my belt, analyzing trends in the market, talking with various professionals as well as customers in the space and watching our own Cloud Computing product, GoGrid, take off as a Cloud Computing leader and innovator, I feel that it is time to make some 2009 predictions for Cloud Computing. Who would have guessed that 2008 would have been “The Year of the Cloud“? I think that 2009 will be “The Year of the CLOUDS” (emphasis on multiple).

A Quick Look Back

If you look back to January 2008, the players in Cloud Computing were few are far between. Obviously, Amazon was breaking ground in establishing themselves as the front-runner at that time. But the term was too new and largely undefined. One of my first blog posts discussed some trends of grid computing, virtualization & virtualized hosting, cloud computing and “green hosting.” For the most part, many of those concepts have not changed. Rather, they have evolved, grown and become more established as leading technologies for the future. As of the writing of that article, GoGrid was still in Private Beta, but with well over 2 years of development getting it ready for prime time.

Virtualization was definitely the buzzword of the beginning of 2008, mainly because it was something that people could fairly easily understand. There were several desktop virtualization products available for users to host different OS’s within their own OS. As Jeff Kaplan predicted, On-Demand services started to really take off for several reasons that are applicable even today (if not more so). His number 1 reason: “Services are Recession Proof” (more about that later in my predictions). While Jeff’s ideas were largely focused on SaaS, there is a lot to be said when you apply them to Cloud Computing in general.

Close to when GoGrid was launched at the end of March 2008, coincidentally(?) the search term “Cloud Computing” (according to Google Insight) really started a strong upward trend within World Wide Searches:

As the US (and World Wide) Economy fell off the cliff, so it seems, did the interest in the Cloud (but that could be due to other worldly distractions). What is actually a bit interesting is that just after the Economy went south, there was a big spike in interest in the Cloud…were people thinking it was recession-proof? Perhaps. (“Cloud Computing” is the blue line below and “US Economy” is appropriately red).

Analysis of the previous year is probably better handled through a separate post. On to some of my 2009 predictions.

Ten Cloud Computing Predictions for 2009

Below is a list of some trends or ideas that I think will surface or grow in 2009. Note, these are not ranked.

1. Clouds Reduce the Effect of the Recession
   The US Government just announced that the US has been in a recession since December 2007. To most people, this is simply stating the obvious. Many in the Cloud Computing field have been touting how moving to the Cloud can lower high Capital Expenditures (CapEx) and shift this to Operating Expenditures (OpEx). Coupling that with a pay-for-what-you-use, use-only-what-you-need model, and Cloud Computing becomes a panacea for extending the runway of your business. Prudent companies are slashing budgets and looking to weather the turbulent market for as long as possible. Those companies that are heavily dependent on advertising will be seeing the effects of cash hording in Q1 and Q2 of 2009. Utility-based spending is a shift in mind-set that could potentially slow the freefall and domino effect we are currently experiencing.
   Recently, I heard about a similar type of idea that could potentially help the sales of hybrid or electric cars. One of the primary barriers that is preventing users from purchasing “green” cars is the high cost associated with a purchase. If the auto industry were to adopt a cell phone business model where you pre-buy your electrical charges and the cost of the car is “subsidized” through the use of recurring and predicable revenue, users might more readily opt for a purchase (at a discounted price). However, several infrastructure changes would be required in order for such a pricing-shift to take place, meaning that charging stations would have to be abundant (and possibly government subsidized as well). In the long term, building the green infrastructure would reduce the US dependence on foreign oil, establish new businesses and competition for charging station infrastructure and move towards bettering the environment. While not exactly the same, similarities can be drawn between this idea and the shift from self-hosted servers to Cloud Infrastructures. CapEx is reduced (e.g., green cars become less expensive to buy/no need to purchase servers that are under-utilized) and costs are moved to OpEx (e.g., charging your car when you need to/paying for only the infrastructure you use).
2. Broader Depth of Clouds
   Cloud Computing providers are leapfrogging each other with new features and offerings. This will continue in 2009. GoGrid was the first to provide a wide assortment of Windows Server Clouds (Windows Server 2003 at launch and later Windows Server 2008). Towards the end of the year, Amazon’s EC2 announced the availability of Windows Server 2003. Microsoft jumped into the ring as a Cloud Platform with Azure. By far, AWS is leading the field by offering a wide array of Cloud services (EC2 – Cloud Infrastructure/ S3, SimpleDB, CloudFront, & SQS – Cloud Extenders). Their footprint continues to deepen as well. But sometimes it’s not bad being #2. GoGrid is a Cloud Infrastructure provider with Cloud Extenders (with GoGrid Cloud Storage) with an emphasis on mirroring standard IT infrastructure services with a focus on ease-of-use through a GUI and programmatic control through an API. Microsoft will be launching their own Cloud Infrastructure in 2009 as well as a variety of Cloud Applications (e.g., Exchange). Google will extend its Cloud Platform with services for storing and serving large files, larger dataset management, pay-for-use enhanced usage and new runtime languages (beyond Python). RackSpace made its move at the end of 2008 with SliceHost and Jungle Disk acquisitions; look to them putting all of the pieces together in 2009. I am seeing the trend towards a broader range of services by several large players. This may confuse the market in the first half of 2009 as IT organizations struggle to figure out the best Cloud solution and how to put it all together as a financially and technologically viable strategy.
3. VC’s, Money & Long Term Viability
   With the credit market increasingly tight, if not non-existent, VC’s, Angel funders and other investors will be faced with some tough decisions. The Dot-Com era allowed for almost anybody to get money for business plans that were essentially vapor-ware. Web 2.0 was slightly better, you had to have a viable business strategy, an established user base, and well on the path to monetization to receive funding. Even with that, there was no guarantee of survival. Many Web 2.0-ers are now shutting shop, despite the fact that they are loved by many. Web 3.0 will present a much steeper hill to climb from a funding perspective. I have spoken to a few investors and VC’s recently (as the Economy imploded) and they still seemed to be somewhat optimistic, but very cautious. But it is their job to keep a positive outlook as they look for the next best thing. With Cloud Computing services gaining even more momentum, this is a good market for funding. But the VC’s and others are really doing their due diligence this time through (are they finally learning from their mistakes over the past 10 years?). Cloud Infrastructure providers will not be the ones receiving the scarce capital, I don’t think. And SaaS providers are a dime a dozen (not in a derogatory way). The SaaS market will continue to grow (not as quickly as previously, I don’t think), in fact, the first Quarter of 2009, we may see a dip as some SaaS organizations actually go under, unfortunately. I think that Cloud Aggregators (those who work to provide integrated Clouds and management services around them) will be ripe for additional funding. For Cloud Platform providers the outlook is a bit trickier as frequently they are dependent on public run-time languages or maintaining proprietary code to keep momentum. I think the smaller providers may see an influx of capital in order to remain competitive, if not survive.
4. Partnerships Galore & Weeding Out of Providers
   Strategic alliances and partnerships are critical to any business success. Not only do you increase exposure to other audiences but also provide more innovative and robust services in the process. GoGrid recently announced partnerships with RightScale, Appistry and GigaSpaces to name a few, with several others coming in 2009 (GoGrid Partners). We will see several new alliances within the Cloud Computing space but this is where my crystal ball is a bit hazy. Cloud Aggregators will be the big movers here and they really have to be. Aggregators need to ensure their own fiscal viability by broadening and diversifying their offerings. If a provider is too attached to EC2, for example, and if Amazon decides to develop functionality that mirrors that of the Aggregator and offer it for free or at a fraction of the cost, the Aggregator will struggle to remain competitive. Aggregators will be core to driving standards and interoperability (#7 below) as they will have much deeper insight into the workings of each of their partners. If they can’t remain ahead of the curve, a big fail whale is on the horizon. Tied to #3 above ($$$), those providers who can’t remain solvent or make smart decision or even monetize in a clean, clear way will go under. Obviously I don’t wish this on any provider, but it is inevitable. I won’t make any predictions but several Cloud providers are for sale or seeking funding to keep their lifeline healthy.
5. Hybrid Solutions
   Not every corporation or business is looking to the Cloud as the next sliced bread. While the Cloud can be the catalyst for a potentially more sound IT and financial strategy, it will not solve every IT challenge. There are some IT infrastructures that must remain in a private datacenter or running on dedicated, bare-metal servers. Database intensive environments may not be conducive to exclusively residing within the Cloud. This year, GoGrid launched the 1.0 version of  Cloud Connect as a way to allow for these types of hybrid (dedicated servers connected to Cloud servers) solutions. Others are calling Hybrid Infrastructure “Cloudbursting.” I expect that some of the strategic partnerships coming in 2009 will include other hybrid solutions of this nature. In fact, they may give way to full mirrored failover or redundancy solutions where traditional infrastructures are mirrored within the Cloud, sharing common datastreams to ensure near-real-time availability of data and services.
6. Web 3.0
   Web 3.0 is upon us. I have long thought that it will be all about Integration and Standards (#7 below). I have written about “mashups” and integrations as being a large component of Web 2.0. Web 3.0 will make these integrations much more seamless and go well beyond that of simple visible shared data applications. What we saw with mashups was essentially proof-of-viability and with some experimentation thrown in. Like a strategic partnership, successful integrations are critical to the furthering the power of the Cloud. In 2009, we will see integrations taking place at a much lower level of IT. Data integrations will remain as they are fairly established. Infrastructure integration and companies offering this as a solution, either as consultation or aggregation of technologies, will drive the innovation of Web 3.0. These integrations will help create new and unique SaaS and even PaaS offerings to the market. The hurdle here will be in the explanation and usability of said solutions.
7. Standards and Interoperability
   While Cloud Computing seemed like the New World in 2007 and the Wild West in 2008, it has now been colonized and settlements established. 2009 will be that of Civil Engineering. The development of standards and interoperability between the varying levels of Clouds is inevitable. It is also tied directly to the needed adoption by the Enterprise. Without clearly defined standards, best practices and even open interoperability, further adoption of the Cloud will slowed dramatically. Just as Phone Number Portability was an important factor in reforming the telcos during the 1990′s and early 2000′s, I believe that Cloud portability (enabled only through guaranteed standards and interoperability) will be a movement in mid to late 2009. Everyone has “agreed to agree,” and now are making inroads towards standards, a reality. It will be important that the big players in the space (e.g., Amazon, Microsoft, Google) become involved. IBM has tossed their hat into the Cloud ring by announcing a Cloud Computing Certification called “Resilient Cloud Validation” (but only if they collaborate with IBM). Without these big players’ participation, there will be 2 types of clouds (standard and non-standard) and/or companies that provide filters or converters to allow for Cloud Portability.
8. Staggered Growth within the Cloud
   I will go out on a limb here as say that there will be tremendous growth within the Cloud. But that is an easy prediction to make. The Cloud encompasses so much that it would be difficult to really see a stagnation or shrinkage. SaaS will expand (perhaps not as rapidly as previously) and offerings by other layers within the Cloud Pyramid will deepen and broaden. Because of the complexity of building up Cloud Infrastructures (from a provider perspective), the Infrastructure layer will take a less steep growth curve as compared to Platform Clouds and Application Clouds will beat the previous two layers out as well. Cloud Aggregators will come and go, and Cloud Extenders will evolve and become more intertwined with other Cloud layers. 2009 will also see the increased visibility of Private Clouds, especially within the Enterprise, until standards and security concerns are met within Public clouds.
9. Technology Advances at the Cloud Molecular Level
   There is probably a new layer to the Cloud Pyramid that needs to be added, one that resides at the “molecular” level. Chip makers such as Intel, are making plans on enabling Cloud-optimized CPU and other types of chips to allow for a more unique control of built-in switches. They are extremely interested in many of the open and proprietary virtualization technologies out there (Xen, VMware, Virtual Iron, etc.) and are strategizing on how to make their chipsets more compatible and efficient for use in the Cloud. Obviously, their vision is to have all Cloud infrastructures running with “Intel Inside” stamped on them. Many Cloud Computing providers, including GoGrid, already hook into chip-level switches and controls to make better use of the processors. Dell, HP and IBM will most certainly release servers specifically designed and configured for running optimized Clouds. Since all Clouds are powered by physical hardware and as advances are made further propelling Moore’s Law into the stratosphere, Clouds will become more powerful and able to take the place of traditional servers even more readily.
10. Larger Adoption
    If one factors in many if not all of the items mentioned previously, the obvious conclusion is that Cloud adoption will be significant in 2009. The Enterprise will move beyond simply testing the waters and just using the Cloud for project work. Private Clouds will help with their acceptance and the undeniable call for cost-savings through reduced CapEx will be too loud to be ignored. My gut also tells me that Government will play a much larger role as well. In 2008 I spoke with a person from the French government whose mission it was to bring the Cloud to their government infrastructure. This is only the tip of the iceberg. With the 2008 US Election, Barack Obama proved how critical an online presence is to furthering the concept of “change.” The Obama-Biden Technology Agenda points to the obvious importance of Technology, especially with the appointment of a Chief Technology Officer for the US Government.  And, as always, Web 3.0 and Startups will remain on the bleeding edge of hosting technology yet conserving cash for a sunnier day (ok, it can be a bit “cloudy”).

It’s always fun trying to gaze into a crystal ball and predict the future. When peering into it for perspective and predictions on Cloud Computing, a “cloudy” crystal ball is a bit of an oxymoron. Cloud Computing is no longer a just a “newfangled” movement but rather an established IT and business strategy that will be critical to all companies regardless of business models. What are your predictions? Leave a comment!

This week, Gartner, Inc released their list of the top 10 Strategic Technologies for 2009. This information stems from research performed within the Technology sector and factors in their client and research feedback. This list, released at the Gartner Symposium ITxpo, is considered to be potentially “disruptive to your environment or market in some way,” says Gartner analyst David Cearley.

While I sometimes find some of Gartner’s commentary on trends in technology a bit conservative and missing other critical data, this 2009 list does represent current trends that I have seen and mirrors many of my own expectations. Just last week, TechCrunch’s Michael Arrington declared that Web 2.0 was dead. I think that many of us have already moved well beyond Web 2.0. My view, for some time, has been that Web 3.0 (for lack of a better term) will be a combination of Integration and Standards and the coupling of the two, with other enabling technologies such as Cloud Computing providing the necessary lubrication. We saw the term “mashup” become prevalent during the past year or so, where companies sought to integrate similar services (or even disparate ones) in a new service delivered via the Web. A could of quick examples of this is evident with the numerous Twitter services that use Twitter data and either present this data in different ways or full integration into other services, or the advent of Yahoo!’s Pipes.

Key to Integration is making the connections easier through the use of public APIs. As more companies expose their API’s to developers, the wheels for integration become even more greased. This is all fine and good provided that these API are carefully documented, but more critical is that APIs must adhere to some sort of standard. Unfortunately, the “standards” requirement is a lot harder to require and maintain. At a recent Cloud Computing Interoperability meeting that I participated in, most attendees agreed that Standards are a huge priority, however, defining these standards would be a daunting task to undertake. But this interop was a clear step forward by the leaders in the industry towards defining these standards. If you step back a few years, you could view Web Services as a precursor to the API movement we see now (API’s are a subset of Web Services), and XML standards helped to propel the acceptance of Web Services and Integrations in general.

I feel that those companies who are currently working to aggregate (or integrate) various API’s into their business model are well positioned to be the ones who can help drive these standards. Case in point, GoGrid has a public API and recently signed up various Cloud Aggregators (such as RightScale, Appistry and GigaSpaces). These companies use a variety of other Cloud Infrastructure providers within their management services. The more that I thought about it, the more I realized how important these Cloud Aggregators’ roles are in driving some Cloud standards. They have views into all of their partner API’s and can easily find similarities and differences between these API’s. Any API’s that these aggregators come up with themselves are one step closer to a standards-based API that could potentially be generic enough for use by many if not all providers.

What is also interesting, is that this concept of Integration and Standards actually does apply to our current World Financial Crisis as well. We have a bank and financial institution pandemonium with mergers seemingly occurring daily. These institutions will need to integrate diverse systems in order to succeed and the government will be forced to derive some standards to govern their vested interest in these institutions. Sure, this is a fairly broad application of these terms in this comparison between Web 3.0 and Finance, but the ideas are similar.

But back to the Gartner predictions for 2009. First, we need to take off our rose colored glasses here. Any time you make a prediction, the odds are that you could be wrong in the long run. I realize that this is a bit pessimistic, but just look at our Economy right now. There were plenty of naysayers who told us that we were going down the wrong path, but we still proceeded ahead, ignoring these predictions. Technology trends are no different than Economic ones; you can make an attempt to predict based on the past however, the difference here is that technology seem to be a lit less volatile compared to the economy.

So, let’s take a look at Gartner’s 2008 and 2009 Strategic Technologies list:

I’d like to dive into these lists, not all topics but just the ones that caught my attention. Interestingly, I find that several of the items on these lists seem to have blurred boundaries while others clearly stand alone.

Green IT, Virtualization, Cloud Computing, Computing Fabrics/Servers – Beyond Blades, and the Web Platform/Web-oriented Architecture, in my mind, are Technologies where this “blurring” is clearly evident. Cloud Computing obviously is the buzzword of 2008 as well it should be. One can actually lump the others in this short-list under “the Cloud.” Fortunately (or unfortunately), this all-encompassing term is used in every technology conversation nowadays. The problem is, because it is being used as such a generic term, many people are having trouble really understanding what “the Cloud” truly is. Some points:

• The Cloud is definitely “Green” in that there are obvious power and energy savings compared to traditional rack & stack servers.
• Green works hand-in-hand with Virtualization. While power and energy efficiencies can be gained through hardware optimizations (e.g., green chips, reduction of power-hungry servers), these efficiencies can be more dramatically realized through virtualization of hardware appliances and components.
• Similarly, Cloud Computing employs the use of Computer Fabrics; instead of partial resource utilization of a bare-metal server, with Cloud Computing one can target just CPU or memory aspects (infrastructure resources and components) and gain efficiencies through their isolated uses.
• Finally, if you plug in the Web as a Platform or Architecture provider and delivery mechanism, one can clearly see how Computing resources can be delivered via said architecture as opposed to traditional methods (e.g., architect in and deliver via the Cloud vs. bare metal and more static and rigid infrastructures).

Back to my earlier point of Integration being a key driver of Web 3.0, Gartner lists (Enterprise) Mashups as another Strategic Technology to watch. I heartily echo this. It will, undoubtedly, take the Enterprise much longer to realize this from a concept point of view as well as the actualization of this technology, but we do know that integration is critical. Why not leverage experts from various practices and bolster your own services or products through integration with these experts. Mashups is a Web 2.0 buzzword that I would recommend be dropped for a more encompassing term of “Integration.” Mashup has the connotation of being very Web-centric (e.g., only visible on the web). Integration, on the other hand, can be applied to both Web-centric delivery but also to more behind-the-scenes channels of Web Services and specifically, APIs. Integration using APIs will give companies clear competitive advantages versus those SMBs or Enterprises that opt to maintain closed systems. Integration of systems can also help drive BPM (Business Process Management) as well as BI (Business Intelligence). By overlaying dissimilar data sets, new conclusions can be made based on the analysis of the data intersections or relationships, thus presenting more distinct and unique offerings.

Lastly and perhaps the ugly duckling of the group, Social Software and Social Networking, I believe will be core to 2009. During any economic crisis or recession, Companies immediately look to slash Marketing and PR budgets above all other Departments. Prior to Web 2.0, Marketing and PR was all about blasting your product or service messages out to the masses. Web 2.0 introduced the idea of engaging in conversations with groups of users and understanding the needs of those users. More recently, with the huge adoption of Social Networking by all types of users (business and personal), the message became even more targeted, reaching almost a 1:1 conversation. This has evolved into Social Marketing using Social Networking/Software as the delivery mechanism. While more difficult to do well and somewhat hit-and-miss at times, Social Marketing is potentially more efficient than dropping gobs of money on keyword buys, sponsorships, or events. Enterprises are already moving towards engaging their prospects or customer base through community-based outreach and social networking channels. Doing it right, however, is a completely different beast. It’s good to see that Gartner views this as a critical technology component of 2009.

We still have to maintain a clear perspective in all of this though. If the Global Recession truly hits as it seems that it will, the items on the list that directly and positively impact the bottom line of companies will naturally rise to the top. Maintaining a cost-effective, competitive advantage in the future will be much more difficult to achieve. I dare say that adopting Cloud Computing as a primary technology strategy will be one of the main catalysts for technology-savvy business to not only stay in business, but also be successful in the long run.