Oracle’s Cloud Announcement at Open World

In a twist of fate, Oracle announces the Exalogic private cloud appliance at this week’s Open World event. Exalogic is meant to run as a scalable application-tier server that naturally tandems with Exadata storage servers. This is a great move as Exadata is selling well ($1B in pipeline revenue). An Exalogic appliance runs Solaris/Linux and includes the following:

• 30 servers with 360 cores
• 960GB of SDD
• 40TB Storage
• 4TB Read Cache
• 72GB Write Cache

The appliance will start at $1M plus maintenance, so it is obviously targeted for bigger enterprises, Platform-as-a-Service (PaaS), or Software-as-a-Service (SaaS) providers.

This is an interesting development as it signals Oracle’s product entry into cloud computing, a business and computing model that can fundamentally change how hardware and software is purchased. As Oracle has the lion’s share of the existing enterprise database and application server market, they have the most to lose with any shift. It also represents a big turnaround from when Larry Ellison explained “Why He Hates Cloud Computing”.

So, why is Oracle jumping into Cloud Computing now? I think they’ve realized that being on the bandwagon allows them to define the emerging market. This is supported by the slide below (from Larry’s keynote) where CC is defined very narrowly as Platform-as-a-Service (PaaS). In the PaaS model, the Exadata and Exalogic products are potential building blocks that they can sell.

What does this mean for the Philippines?

I doubt that local enterprises or local PaaS providers will shell $1M (P45M) for a highly scalable cloud application server appliance like Exalogic. At a starting price of $1M (P45M), that’s already an entire local data center with half a dozen racks. To further put that amount into perspective, that single appliance, if purchased by a local SaaS/IaaS provider like IPConverge, will already consume 11% of their recent IPO Listing.

Oracle’s move is still worth noting though as an example of how even the most reluctant of enterprise software leaders are jumping into Cloud Computing.

Advantages of Cloud Computing

Cloud Computing is an important trend for established and start-up businesses because it costs less, is quicker to set-up, is more flexible, and is accessible by mobile workers. Ultimately, it allows business leaders to concentrate on growing their portfolio of products and differentiating in the marketplace rather than worrying about hardware, software licenses, updates, and IT staff to keep servers running.

NIST, the US standards body, defines Cloud Computing as follows:

“Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

Sharing resources among organizations reduces the overall cost for a business and effectively outsources IT applications, server, and storage functions to a central vendor.

I see the Cloud benefiting three types of businesses in the Philippines:

1. Start-up businesses –
   The cloud reduces up-front costs (Capital Expenditures) on server hardware and software which helps accelerate return on investment (ROI). It also levels the playing field for our local entrepreneurs wanting to penetrate the global market for web solutions (PCs, mobile phones and iPADs) by allowing access to the same global data centers used by Amazon, Microsoft, and Google.
   
   
2. Businesses with no IT –
   For the Philippines to better compete in the global economy more local businesses need to start utilizing technology to increase revenue, reduce cost, and bolster productivity. The cloud allows businesses to ease into technology by providing standard business productivity tools like e-mail, customer relationship management, collaboration, accounting, and HR management without having to buy server hardware or invest in infrastructure.
   
   
3. Businesses with in-house IT –
   As businesses with existing IT infrastructures go through periodic hardware and software refresh cycles, the Cloud becomes a cost-reducing option. Instead of having to purchase a one-size fits all perpetual software license and server hardware paid up-front, the firm can choose to pay for only what they use on a monthly basis by going to the Cloud. Though there is a need to invest in better internet connectivity, the business will not need to worry about electricity costs and keeping a Gen-Set always ready for power-hungry data-storage and application servers.

Asian Governments Adopting Cloud Computing

 

Just back from the Gov’t Cloud Forum in Singapore.

Based on the great set of presentations and speakers, it is obvious that Governments in Asia are serious about Cloud Computing. Here are some of the key cloud initiatives discussed at the event:

1. Korea	Korea has an ambitious 5-year plan establishing K-Cloud, the ecosystem for Cloud Computing in the country.  K-Cloud Goals: Increase Cloud Computing Usage by 500% Reduce Government IT Infrastructure Costs by 50% Be a Top Player in Cloud Computing Delivery and Research To reflect how serious the Korean government is about these goals, they have formed a combinatory planning group composed of the Communications Commission, Ministry of Knowledge Economy, Ministry of Public Administration and Security
2. Japan	Dr. Yoshiaki Tojo from Japan’s Ministry of Economy, Trade, and Industry highlighted Japan’s Government 2.0 initiative (Government as a Platform). With the METI project (Idea Box), they were able to deploy an interactive social media application that allowed Japanese Citizens to submit ideas to the government. It’s a concept Dr. Tojo touted as a form of Participatory e-Government.
3. Singapore	Dr Lee Hing Yan, Singapore’s well-regarded father of Cloud Computing highlighted the growing ecosystem in Singapore and how the country is poised to be a regional cloud service leader due to it’s well placed hub of high-speed undersea cables. Singapore’s major thrusts into the Cloud include: Catalyzing the use of Cloud Services by prequalifying cloud providers like SingTel and NCS. Attracting “Queen Bee” Cloud Players like: Verizon Business Savvis Fujitsu Amazon Salesforce.com etc. Competency Development Enhancing Privacy and Security through certification (ISO 27001) Forging R&D Partnerships
4. Malaysia	Malaysia’s government sponsored Super Corridor (MSC) has put cloud computing as the number one priority in its top 10 strategic technologies for 2010.

 

What About the Philippines?

In contrast, the Philippine government has been cool on Cloud Computing, instead focusing on potential issues like security. Though it’s great to see the private sector take the initiative (PLDT AppFarm, NetSuite, IP-Converge, CloudSolutions, etc), the public sector needs to help lead with policy and investment prioritization to compete with our Asian neighbors who already get it.

Technorati Tags: Philippines,Cloud Computing,Asia,e-Government

Attending the Government Cloud Forum in Singapore

I will be attending the Government Cloud Forum in Singapore this week where the following topics will be covered:

• Government-as-a-Service
• Off-Premise Computing
• Growing the cloud computing ecosystem in Singapore and Asia
• Virtualization and Cloud: Security and Moving between the two
• What to look for in a Cloud Computing service level agreement
• Cloud computing standards and security
• Etc.

Looking forward to meeting with the key figures driving Singapore’s Cloud Computing initiatives and hearing about what may be applicable in the Philippine setting.

Another Amazon EC2 Price Cut

Amazon recently cut the price of its Elastic Compute cloud (EC2) service by about 20%, likely to put competitive pressure on VMware’s new vCloud Director. This is great news for existing customers and makes cloud computing more accessible to small businesses. Though good for customers, one potential concern for IaaS providers like AWS is the resulting profit margin dilution.

The new EC2 price list is available here.