By Walter Lindsay, Director of Solution Architecture, Liaison Technologies
If you ask five people what cloud computing is, you will get six answers. Is a cloud what NASA uses for massive computations? Is it taking backups of a PC? Collaboratively editing documents online?
For this discussion, we will focus on only a portion of cloud computing – data delivery and data integration in the cloud.
To discuss this space, let’s reason from what is familiar and what we know, to what is newer and less familiar. In that spirit, using our part of cloud computing is like investing in mutual funds.
My 401k is managed by a broker which provides a set of funds of different risk profiles and sectors of the market, so that I can have a diversified portfolio. Each fund has a fund manager. Some funds invest in companies, which have their own management. Some funds are composed of other funds, similar to how services in a cloud can be composed from other services. There is a value chain in a system of mutual funds similar to the value chain inherent in cloud services, in which services can depend on other services, potentially even services in other clouds.
Investing in mutual funds requires entrusting money to the broker or to the fund. Using a cloud for data delivery or integration requires you to entrust data to the cloud provider. The cloud has services that move, manipulate and store data. Your data. Or data you need. (Without which your business processes shut down.) In a previous job, I worked with companies that needed to have “down” databases repaired. For instance, when a disk drive failed the database stopped working. It was amazing how many companies had never tested whether they could restore the database from their backups. People cry on the phone when they are afraid their business is lost because their database cannot be repaired. As with applications and databases and ESBs etc. that run in-house, a business depends on a cloud that moves or integrates data.
Mutual funds allow diversification. For the last sixty or so years, the rationale for diversifying investments has been clear. However, going back farther in history, we didn’t have the technology to easily diversify investments. People invested in one or a few stocks or ventures, and often faced ruin if a venture failed. Today we have the technology to let even small investors diversify. With cloud computing, one can pick “best of breed” applications and providers. You may choose one cloud application for one part of your business, use a combination of two legacy applications for another part, and so on.
Mutual funds follow a specified strategy and have controls in place. For instance, a fund may keep up to 5% in cash, and invest the rest in mid-cap telecom stock. Holding 30% of its assets in T-bills would violate the strategy. Controls keep too much money from being invested in cash, keep the fund’s assets out of T-bills, etc. Cloud providers offer SLAs.
Mutual funds provide transparency. They state their broad strategy ahead of time so that investors can choose funds that meet specific needs. They then periodically report on their performance.
There is, however, a significant difference between the nature of cloud service transparency and mutual fund transparency. My 5-year-old does not care about 401k fund performance, even though someday she might inherit money from the fund. However, a cloud brokerage deals in data that conforms to data formats. If an application developer considers a change, he or she needs to know the cost of the change. There is great business value in being able to choose between an alternative that would tear the cloud in half and an alternative that would cause only a small ripple in the cloud. There are many such casual users of the metadata of the kind of cloud we are discussing here.
I do not pay the fund manager’s full salary. If I invest a million dollars into a fund, it can handle it. Mutual funds are “multi-tenant” and have “elastic capacity.”
There are, however, some other differences worth noting. If I phoned my fund manager every day, I would break his or her business model. Instead, the fund manager closely watches the assets, and might make frequent changes in how the fund invests. But the manger will not respond to constant requests from me. Clouds respond to frequent service requests.
More importantly, pulling one’s money out of a fund is different than moving a business process out of a cloud brokerage. Pulling out money from a fund is governed by an agreement, and for some for some funds, withdrawing one’s money is really easy. However, if a business process is in the cloud, the process might need to be migrated or re-implemented elsewhere.
And, unfortunately, we must mention fraud. The Bernie Madoffs of the world aren’t confined to Wall Street. In cloud computing, data security, for instance, is critical.
But probably the biggest difference between mutual funds and cloud brokerages of data delivery and integration is newness. We are used to mutual funds. Many of us have used mutual funds for a long time. The mutual fund industry has identified how to report information, and how to run itself, and has built up the confidence of investors. Cloud computing is relatively new. While the techniques of running clouds (like backing up databases) are not new, clouds have pitfalls that new brokers may not understand. Yes, Liaison has provided cloud-like services for years.
Clouds seem novel because we have to entrust data to them, yet we invest in mutual funds without a second thought. The value of a company’s data might far exceed the amount of money I have to invest, but we may distrust clouds because we don’t have long experience with them and because governance and transparency standards aren’t as mature.
Since the cloud industry is relative new, best practices for running clouds may not have permeated the industry. This newness puts on a burden on the user of cloud services to insist on the SLAs that matter most to the user.
Enron didn’t cause investors to swear off financial markets. The cloud broker industry certainly can have its Enrons. Entrust your data to cloud brokers just as wisely as you invest your money.