Government agencies already have stepped into the community cloud arena, and are developing multi-tenant environments...
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for hardware and application sharing among their various branches.
The participants gain the benefits of a private cloud -- sharing computing resources and accessing applications suited to their particular vertical industry in a secure environment -- without incurring the cost of building an internal cloud.
The same types of cloud formations are expected to begin taking shape in such private industries as financial services and health care, where they could become a cost-effective business plan for companies with similar operational and business process needs.
Mount Sinai Hospital in Toronto, for example, is building a community cloud in conjunction with the Canadian government that will give 14 area hospitals shared access to a fetal ultrasound application and data storage for patient information.
The effort began when nearby hospitals expressed interest in running the identical version of the ultrasound application that Mount Sinai had purchased and customized, according to Prateek Dwivedi, the hospital's CIO. With the application, doctors can take measurements of at-risk fetuses.
Mount Sinai was interested in providing the application to other hospitals, possibly as a cloud service, Dwivedi said. As a nonprofit funded by the public, however, it was not in a position to incur the operational costs of a community cloud.
Mount Sinai turned instead to a Canadian provincial ministry to use the hardware resources available in one of its data centers. The ministry agreed to provide its infrastructure as a service and charge the 14 hospitals directly for compute resources. At the same time, Mount Sinai charges the other hospitals to use the application in a Software as a Service, or SaaS, model to cover administrative and support costs.
"It's a good model when the others trust that you're not benefiting [economically]. You all use the same system, get the right support with upgrades, etc., and achieve economies of scale," Dwivedi said.
Most importantly, "a community of users" is controlling the application, not a vendor, Dwivedi said. "We control it and we get the benefit." One of those benefits is not having to worry about a vendor supporting an application that has been customized: "Vendors don't understand how to manage [our custom] applications," he said.
If the hospitals were to hire their own support personnel to run the application, they each would need to budget for one-quarter to one-half of a person, Dwivedi estimated. The community cloud will achieve economies of scale by paying for one support person at Mount Sinai for every four hospitals in the cloud.
Community cloud means cost recovery, not profit
The community cloud effort is not about making money -- the amounts the hospitals pay cover only Mount Sinai's development, support and administrative costs for the application and the ministry's operational costs for hosting the community cloud. That's a key point when it comes to building such a cloud, according to Dwivedi.
We spent a lot of time talking about mutual benefit and cost recovery; that's where the value of community clouds is.
Prateek Dwivedi, CIO, Mount Sinai Hospital
If enterprises are wary of being sold a bill of goods, communities are even more so, Dwivedi said. For any community cloud to work, the chargeback setup needs to be capped at cost recovery. If it looks as though someone is making money, they'll appear to have more strength, and resentment will grow, he said.
"For us, it's not about money, but to centralize the data so everyone speaks the same language" when they look at the ultrasound of a high-risk fetus, Dwivedi said. "The clinical results are better when everyone is using the same application -- a benefit even more important than cost savings," he said. "We spent a lot of time talking about mutual benefit and cost recovery; that's where the value of community clouds is."
Another primary benefit of cloud computing is multi-tenancy. That leads experts to predict that, because the companies in a vertical industry have common interests and regulations, a community cloud would be an ideal business platform.
"Community clouds may end up being the biggest, the most important concepts," and a good solution for highly parallel computing in meteorology or pharmaceuticals, said Tom Bittman, a Gartner Inc. vice president and distinguished analyst, at the Gartner Data Center Conference in Las Vegas this month.
"I think [community clouds] will be the trend in the financial services industry," echoed Omar Kayed, principal consultant at Convergent Consulting Inc. in Toronto, and a former senior vice president of IT and business solutions for Dundee Wealth Management's Dynamic Mutual Fund, also in Toronto. "Companies want to take advantage of the cloud, and the best solution is to build their own [community], so the security is guaranteed," he said. A community cloud among mutual funds and financial advisors would work where sharing analyst views is not a concern, he added.
Creating trust in a community cloud
Creating trust among community cloud computing members in terms of data privacy is a key first step. Mount Sinai and the ministry are working to put privacy and data security policies in place that are in line with government regulations.
Getting the right agreements in place between the ministry, the hospitals and the vendors took "a long time," according to Dwivedi. "You are asking someone to do something different than they have ever done."
For example, Dwivedi is currently negotiating with vendors to provide third-level support; Mount Sinai's dedicated support staff will provide first- and second-level support. "We have the hospitals in writing, and the vendors are at the table," he said. The cloud needs to be operational by March because of the funding cycle. He's confident because the application is already working; it just needs to be hosted at the ministry's data center site.
Let us know what you think about the story; email Laura Smith, Features Writer.