With more and more organizations opting to store their data on cloud computing systems rather than under their own roofs, outsourcing data centres are springing up like mushrooms to answer the demand. That development, say the folks at this Colorado-based thinktank, spins off into all kinds of good stuff, including savings in manpower, savings in money and—here’s where the world’s interests kick in—savings in energy. Indeed, say the analysts behind the research, this cloud business could help reduce the world’s energy costs by almost a third over the next decade.

First up, the stuff that lines the pockets.

Revenue from these proliferating data centres, predicts the new research, will inflate to a compound annual growth rate over the next decade of 29%. In hard numbers, that means a revenue climb from $46 billion in 2009 to $210.3 billion in 2015. More than that, says the report—titled “Cloud Computing Energy Efficiency”—new investments in the stuff will continue to spur greater efficiency for those dollars spent.

Indeed, Pike Research’s analysis suggests that, absent the cloud, only the very largest commercial or governmental organizations would have the capital and expertise required to achieve the same kind of efficiency at a comparable cost.

Green Shoots

But it’s the trending transformation of another kind of green, says Pike’s senior analyst Eric Woods, that’s even more impressive.

“Cloud computing revenue will grow strongly over the next decade,” Woods says. “But the reduction in energy consumption will be even more significant.”

Pike forecasts that, if the world continues along its current cloud-computing adoption curve, overall data centre energy consumption will be slashed by a dramatic 31% in the period between 2010 and 2020.

This news comes on the heels of other publicly stated initiatives that acknowledge the wasteful footprint of the globe’s infinite IT goings on. Facebook, for one, recently announced that it intends to make public the details of its data centres such that others might benefit from this massive operation’s evolving understanding of energy efficiency. According to the social media giant, the servers in its refurbished data house—which apparently took two years and tens of millions of dollars to complete—run 38% more efficiently, and 24% less expensively, than those in their comparable peers.

One Centre, Less Energy

Simply put, goes the report, clouds are better utilized and less expensive to operate than traditional, siloed data repositories are. The more disparate operations they take in under their generous eaves, the more efficiently is this channel of energy expended.

And all signs point to a continued drift in this direction. As increasingly more of the work that was conventionally performed in internal data centres is consigned to the cloud, the world’s basket of energy consumption, associated energy expenses and greenhouse gas emissions suffers ever fewer hands dipping into its bounty.

Consider, too, the very prickly subject of cloud security, heretofore much maligned for its apparently inherently contained contradiction but, in a recent show of enlightenment, perhaps rewritten as saviour rather than villain.

Big Picture Author

In this Wall Street Journal article, a big-picture pundit introduces the extraordinary idea that the cloud may in fact be the safest place to store our data, the deafening cries that have long argued the opposite notwithstanding.

The article’s author, John Bussey, submits that data consigned to the cloud actually enjoys an abundance of sophisticated security-enhancing features that an organization, particularly one in the small-to-mid-sized category, simply couldn’t access on its own.

“The sheer size of cloud businesses like Amazon.com’s Amazon Web Services,” the piece goes, “allows significantly more investment in security policing and countermeasures than almost any company, large or small, could afford themselves.”

Go Big to Stay Secure

More than that, Bussey points out, the average computer user is not as attentive to even the most routine security imperatives as he needs to be. But sign on with just a “plain-vanilla” cloud package provider and you automatically score security basics such as updated antivirus runs and as-needed software patch applications. Any upgrade from there improves your lot further with enhanced security features like data firewalls, high-end encryption and 24-hour tech support.

“Small and medium businesses are insane not to leverage the advantages of cloud computing,” Jim Reavis, of the industry group Cloud Security Alliance, told Bussey. “It ends up being almost in all cases a security upgrade, because they can’t otherwise afford the practices.”

A Lone Voice in the Wilderness

Of course, this voice in the wilderness is still powerfully eclipsed by the hue and cry of the status quo. And it’s a position endlessly reinforced by the studies that continue to pour in with findings that tell stories of organizations’ enduring wariness of the idea of entrusting their data with an off-site third party. And this is the scene even in spite of an ongoing flurry of initiatives undertaken by IT security vendors, cloud providers and industry evangelists themselves to redress this issue.

Still Talking to Ghosts

Just this week, a study unveiled at the V3 Virtual Cloud Summit in Great Britain reported that a full 87% of enterprises remain concerned about security in the cloud.

And some 72% of small (fewer than 100 employees), and 63% of mid-sized (100 to 999 employees) companies told technology research firm IDC, in 2008, that security was their most pressing concern when it came to the notion of transferring their operations to the cloud. That those numbers had contracted to 50% and 47%, respectively, when the same survey was conducted three years later, is a thundering step in the right direction.

Because revolution, after all, is a slow business. Remember how long it took to come around to that broccoli?

10 Things you need to know about PSOs

1. The global PSA software market will hit a staggering $7.63 billion by the year 2017, according to new research from Global Industry Analysts, Inc. The news is surprising, considering the hit this market took during the recent global economic dip, as those companies purchasing such products opted to hold back their purse in infrastructure-enhancing purchases.

2. The tide is turning on this front in a significant way. Indeed, PSA software suites are increasingly emerging as bona-fide recession-proofers for corporate IT department principals inside professional services organizations anxious not to suffer the same shortfalls again.

3. Professional Service Automation is enterprise software that’s particularly designed for companies engaged in the delivery of accounting, management consulting, engineering, and agency and PR services, among others. With it, companies enjoy increased productivity and efficiencies across their operations, along with a much-enhanced view of what’s actually going on within them.

4. Up until fairly recently, PSA was regarded in terms of its individual components only. But its usefulness increases manifold with recent developments that link the software’s various disparate modules in a way that reveals the full breadth of available integrated solutions.

5. Not surprisingly, the omnipresent Cloud hovers above this aspect of operational efficiency, too. As more and more companies adopt the off-site approach to their data-management efforts, the opportunity to bundle all of their corporate activities—from sales to service to finance—under a single umbrella is too appealing to pass by. It’s why a muscular movement is afoot to blend the worlds of CRM and PSA.

6. A recent study conducted by consulting firm Service Performance Insight demonstrates that Salesforce CRM users who shift their interests to the Cloud are rewarded for the choice with higher bid-to-win ratios, greater average revenues per project and deal pipelines that are vastly superior to those of their less forward-thinking counterparts

7. The Service Performance Insight research also shows that PSOs simply cannot realize all the powers of their CRM systems unless they’re well integrated with their PSAs.

8. An integrated CRM-PSA application offers users the ability to track the gamut of their business activity—from fingers-crossed leads through in-the-bag deals—on a single platform, with a single interface, employing a single data repository.

9. By amalgamating their CRM and PSA platforms into one, goes the news, professional services firms benefit from larger project backlogs, improved executive visibility, better success with winning bids, higher billable utilization, an enhanced percentage of billable employees, more revenue from new clients and a greater proportion of projects that are completed on time.

10. Just the same, another burst of research from the same organization, this exploring the challenges of Salesforce CRM customers in the professional services industry, reveals that precious few of them have taken the steps to see through such a profitable integration. The news, still in the pipeline, is clearly yet to be fully put into profitable play.

Are a new set of cloud standards starting to form?

So it is with the developing shape of cloud computing. Definition is starting to emerge in the skies with the establishment of a set of standards seeking to best facilitate its adoption. Will they eliminate the confusion that currently shrouds the stuff? It’s a subject that’s scored a whack of attention from folks anxious to corral usability within manageable parameters. We take a look at some of the organizations trying to set the tone for this game changer.

Cloud Standards Customer Council.

This end-user advocacy group claims ownership of more than 100 members. It exists to complement existing cloud standards efforts. It seeks the production of a core set of client-driven requirements that lower the barriers for widespread cloud adoption by prioritizing key interoperability issues, including cloud management, reference architecture and hybrid clouds. It also hopes, with its existence, to facilitate the exchange of real-world stories that might provide illumination and insight into the practical application of this complicated new beast. A “resource hub” on the council’s website offers case studies in which users might find a useful reflection of themselves. The site also provides a compilation of industry news stories on the cloud, and cloud-based webcasts and podcasts can be accessed here. Notable members: Citigroup, Deere & Co., Costco Wholesale, North Carolina State University.

Open Data Center Alliance.

This Intel-backed standards organization was formed last year. Principles claim the membership represents more than $100 billion in annual IT spending power. This organization is behind the recent development of eight discreet “usage models,” designed to help IT managers in negotiations with cloud providers through the provision of various standardized templates. Indeed, this independent IT consortium is dedicated to having these usage models in widespread application in order to best help newcomers comprehensively appreciate the expected delivery of identified customer requirements based on open, industry-standard and multivendor solutions. Notable members: BMW, Marriott International, Shell and Deutsche Bank.

Cloud Security Alliance.

This not-for-profit, member-driven organization is committed to promoting the best practices for security assurance provision within cloud computing. Led by a broad coalition of industry practitioners, corporations and associations, the alliance is also keen to provide education on this subject for new users struggling with its dimensions. Its site helpfully lists upcoming events, such as the Cloud Security Alliance Conference 2011 (in Orlando, November 16 and 17). A blog features entries with such titles as, “Pass the Buck: Who’s Responsible for Security in the Cloud?” and “Understanding Best-in-Class Cloud Security Measures and How to Evaluate Providers.” It also provides a highly useful forum for the dissemination of the latest news, research developments and educational opportunities. Notable members: Coca-Cola, eBay, Reed Elsevier.

So as we move into the new paradigm keep an eye out for these cloud players; who knows, they may set the standards your organization has to meet.

Will the Dropbox privacy storm abate?

The storm began not in a teacup, but in a Dropbox, and it was a doozy.

The Web-based file-hosting service that allows users to share files and photos across the Internet courtesy of cloud computing is still sweeping up from a summer squall that was set off with nothing more spectacular than some poorly chosen words.

Dropbox set the leaves in motion in June when it sought to tweak its terms of service to better explain its position on a range of platforms, including the thorny business of its ownership of the data it hosts. But its reworked explanation just served to muddy the scene, arguably further damaging cloud computing technology’s more widespread adoption.

Dropbox wrote, “By submitting your stuff to the services, you grant us (and those we work with to provide the services) worldwide, non-exclusive, royalty-free, sublicenseable rights to use, copy, distribute, prepare derivative works (such as translations or format conversions) of, perform, or publicly display that stuff to the extent reasonably necessary for the service.”

Not surprisingly, the revised text sent users into a panic for its suggestion that they relinquish ownership rights as a condition of use.

Dropbox: Dropping the Ball?

Dropbox, whose first cloud-data-ownership scandal was an authentication bug that left its 25 million users’ accounts wide open in June, scrambled to address the misunderstanding, offering apologies along with yet another attempt at clarification. “When we announced an upcoming revision to our Terms of Service last week, we aimed to explain the key changes in plain language to make all our legal docs much clearer,” the company, which burst on the scene four years ago, wrote. “It’s important to us that these terms are easy to understand, and your feedback has told us that we still have work to do.

“You retain ownership of your stuff. You are solely responsible for your conduct, the content of your files and folders, and your communications with others while using the services.” The blog adds that users only grant Dropbox license to use customer data “solely to enable us to technically administer, display and operate the services.”

A few days later, the Dropbox founders followed up with more cris de coeur, presumably worried about the negative impact on cloud technologies: “We want to be 100 percent clear that you own what you put in your Dropbox,” company principals Drew Houston and Arash Ferdowsi. “We don’t own your stuff. And the license you give us is really limited. It only allows us to provide the service to you. Nothing else.”

Cloud Forming?

This Dropbox incident, along with a recent spate of high-profile cloud failings, might seem unfortunate for the way they undermine an emerging technology shift that promises dramatic savings, in both expenses and efficiency, to a corporate landscape hungry for both. But it may all be for the best, in the end, for the spotlight it shines on a prominent cloud operator’s pledge to the world regarding the fuzzy and emerging subject of cloud computing. “What’s yours is yours.”

Predicting the effects of new technology can be a challenge

Although it’s still early days, from a long-range historical point of view, the cloud has actually hovered above our various computer-powered preoccupations for a good few years now. Adoption rates for this game-changer motor ever forward, with bugs being identified and addressed, and capabilities being increasingly celebrated.

But it’s worth noting that we remain far from an end point in our understanding of, and appreciation for, this paradigm-shifting newcomer to our daily lives. The Microsoft-produced white paper, The Economics of the Cloud (TK), offers some insight on how this new age might evolve, and urges its proponents to take the long view and see the underlying economics as having the biggest impact on long term take-up rates.

What are the Future Prospects for the Cloud?

It’s always instructive to refer back to other examples of revolutionary design to gain a sense of the way a new advancement might unfold. The world’s first automobiles were described as “horseless carriages,” and they were designed just as their equine-powered predecessors had been—complete with whip holders—in spite of the revised absence of such requirements. “Engineers initially failed to understand the new possibilities of the new paradigm,” the paper points out, “such as building for higher speeds, or greater safety.” Just as in the early days of the car business, it’s difficult to predict where this novelty will take us, but it’s critical not to be hemmed in by restrictions that no longer apply.

Technical complexities and adoption hurdles steal most of the ink these days in literature covering the cloud, as was highlighted in our previous blog entry Calming (Mis) Conceptions about the Cloud. The Microsoft white paper points out the detriment to users’ exploitation of the technology such misinformation creates. Historically, however, it’s been underlying economics that have in fact had a much stronger impact on the direction and speed of disruptions, as technological challenges are resolved or overcome through the rapid innovation to which we‘ve become accustomed.

The cloud allows core IT infrastructure to be brought into large data centres that take advantage of significant economies of scale in three areas: supply-side savings (amortizing costs across multiple servers), demand-side aggregation (reducing variability) and multi-tenancy efficiency (amortizing costs across multiple customers).

Making the Most for your Business – Cloud Flexibility

Capitalizing on these economic benefits is the trick. Just as engineers had to fundamentally rethink design in the early days of the car so too will developers have to rethink their approach to this new era of application design. The concepts of multi-tenancy and demand-side aggregation will represent a formidable challenge for developers and IT departments after all; whatever their level of sophistication. And if you screw up, you could find yourself enjoying only some of the savings on offer, or, even paying more for application development than you currently do.

Onwards and upwards, then. And leave the whip holder in the dust.

But the call for corporate responsibility is a profound and meaningful one whose noisy bleats are unrelenting. And this inside a growing understanding that more and more pollution derives from computing. The Environmental Protection Agency in the US declared that a full 1.5% of total electricity consumed in 2006 came from this source.

Take fresh heart then that there is a new opportunity for you to be greener still—and it lies in the skies.

Cloud Reduces Corporate Carbon Footprint

A recent Microsoft-commissioned study has concluded that cloud computing — the remote-hosting darling of the computerized corporate landscape that’s already turning heads with its promises of decreased costs and increased flexibility — is actually good for the environment.

By comparing the energy usage of those business applications that are resident on site to their cloud-based equivalents, researchers have identified a remarkable disparity that points to the latter’s potential to save companies — at minimum — some 30% in energy consumption and carbon emissions.

At the far end of the scale, enormous public cloud environments and large data centres, such as those helmed by the likes of Google and Amazon, enjoy those savings courtesy of vast economies of scale, virtualization, dynamically-provisioned software and other well-entrenched operational efficiencies that already characterize their massive operation.

Benefits Even Greater for Small Business

More critically, though, those organizations at the other end — i.e., small businesses that employ just 100 users or so — can score even higher by undertaking a switch to a cloud-based environment.

By incorporating the dynamic provisioning, more responsive server utilization and other efficiency-inspiring strategies cloud computing offers, these companies stand to save by an astonishing 90% or more. The smaller the operation is, it turns out, the greater the environmental benefits.

Mid-sized companies whose user base hovers around 1,000 can expect savings of 60%-90%.

The Methodology

The study honed in on three popular on-premise Microsoft business applications: Microsoft Exchange Server 2007, Microsoft Dynamics CRM and Microsoft SharePoint Server 2007. It contrasted each with a cloud-based alternative, namely: Microsoft Exchange Online, Microsoft Dynamics CRM Online and Microsoft SharePoint Online.

Methodically, it determined the carbon footprint and energy expenditure produced by typical corporate IT data centres, complete with servers and storage dedicated to separate applications. It did so considering deployment scenes featuring 100, 1,000 and 10,000 users. It compared and contrasted traditional and hosted scenarios.

In turn the study, conducted by Accenture and sustainability consulting company WSP Energy & Environment, concluded that there is much to be gained by a wholesale adoption of hosted computer services. Indeed, researchers point out simply shifting 50,000 e-mail users from individual Exchange servers to Microsoft Exchange Online translates into emissions savings of 32%.

The future, more apparently than ever, resides in the clouds.