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The history of cloud computing and what's coming next: A CIO guide

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Abundant and mature, cloud technology gains favor beyond early adopters

There are now as many cloud technology options as IT functions. The good news is these 'as-a-service' features are getting better as they mature.

In 2010, CIO Larry Bolick made a decision that would affect nearly every other IT decision at Aquent LLC from that day forward. Required to cut costs in the face of a recession, he and his IT team resolved to embrace cloud technology.

First, the Boston-based staffing and consulting agency switched its phones to a cloud-based voice service. Soon after, all email was migrated to Google's Gmail, and ERP systems were sent out to Amazon Web Services. Within two years, more than a half-dozen of Aquent's business applications were cloud-based, and business intelligence (BI) is now headed to the cloud as well.

Perhaps most tellingly, it won't stop there.

"There's definitely a growing sophistication with cloud services," Bolick said. "When we first started, it was all about getting servers up quickly and that sort of thing. Now we're seeing business intelligence services and there's data warehousing on the horizon."

When it comes to cloud solutions, it seems there's very little nowadays that isn't available "as a service" to IT departments. To be sure, the hype persists, but cloud has become less buzzword and more must-have technology for CIOs looking for competitive advantage. And the interest is hardly generic. A recent TechTarget survey showed that, like Bolick, IT leaders are increasingly looking at cloud technology for an expanding array of tasks, from business intelligence and data storage to disaster recovery.

These as-a-service options are not new to the marketplace, but many more are reaching maturity, said R "Ray" Wang, principal analyst and CEO at Constellation Research Inc. in San Francisco. "Within five years, maybe even three years' time, everything you buy is going to be in the cloud; it isn't even going to be an issue. It's the way customers want to consume it," he said.

Early cloud adopter Bolick believes cloud solution saturation may come even sooner. Once CIOs see how well a solution works, they want to build on that success. "There's a gravitational pull" as services become more sophisticated, he said, pointing to his own recent switch to a cloud-based BI solution.

"After we moved our ERP system to the cloud, with our data already in the Amazon cloud, the next logical thing to think about was, should we move our BI there as well?" Bolick said. "We did, and now the operational data, both transactional and reporting, sits out on the Amazon cloud."

Cloud shakes up IT product planning

The adoption of cloud solutions has also changed how Bolick and his team make IT purchasing decisions. Recently, a long-planned data warehousing upgrade was put on hold after Bolick's IT director heard about Amazon's upcoming Data Storage as a Service offering, Redshift.

"We put our product planning on hold for a bit until we could get a better look at [Redshift] and see if we might be able to take advantage of it," Bolick said. "That's almost unheard of in my experience -- to have something we've been planning put on hold to see what this new thing looks like."

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According to John Burke, principal analyst at Chicago-based The Nemertes Research Group Inc., more CIOs will be making decisions in just this way, measuring every upgrade or replacement against what the cloud or Software-as-a-Service providers have to offer.

"There's a general movement to increase the amount of stuff that is outsourced, and in a very selective way," Burke said. "As-a-service offerings are typically a great fit for that selective outsourcing strategy."

Technologies gaining in popularity include Desktop as a Service and Disaster Recovery as a Service. "The benefits of having failover in the cloud are huge, in that you can essentially reserve some capacity but not pay to use it until you actually need it -- and that's a very attractive proposition," Burke said.

Desktop as a Service is attractive because it takes the "thankless task" of desktop management out of the data center. Its prevalence will grow along with bring your own device (BYOD) initiatives, said Burke, who predicts the BYOD trend will eventually have employees providing their own laptops as well, making provisioned desktops extremely desirable.

In Bolick's view, the quality and scope of cloud technology now available make it possible for entire small businesses to be up and running on cloud services within a day. His experience since 2010 shows that sort of speed and agility can be leveraged for larger enterprises as well. "Cloud services are allowing us to do some things that we couldn't even conceive of doing if we had to go out and build a data center," he said.

Read part two on calculating the tradeoffs between speed to adoption and ongoing maintenance of cloud solutions.

Let us know what you think about the story; email Karen Goulart, features writer.

This was first published in March 2013

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Essential Guide

The history of cloud computing and what's coming next: A CIO guide
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