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Cloud computing initiatives show wide range as VMware touts cloud OS

VMware's new cloud operating system, vSphere, brings new capabilities, though some big cloud projects will use Microsoft's virtualization technology.

The hype and questions surrounding cloud computing will only increase today as VMware Inc. introduces the next version of its infrastructure, called vSphere 4, to a CIO community still grappling to understand what exactly "cloud" is. Nonetheless, some IT executives plan to implement the latest VMware product even as others follow the Microsoft Hyper-V route and consider some sophisticated cloud projects.

VMware is calling vSphere 4 a cloud operating system, in that it gives applications awareness that they are running on a virtual machine. Some experts believe that this addresses a piece of the management puzzle that's been missing in virtual environments.

"If you virtualize the entire data center, in VMware's terms you have a data center operating system," said Mark Bowker, an analyst at The Enterprise Strategy Group Inc., in a recent interview with "If that application is aware that it's running on a data center OS, there's a different availability policy I can apply, there's more flexibility in the way I can provide performance availability, bandwidth, security protection, etc. But if the application isn't aware, you still have to set that policy on a per-virtual machine level, not on an application level."

VSphere still has the virtualization fundamentals, like ESX, but it also helps companies build in resource management and set automated policies across groups of assets, according to Jon Gilmartin, director of product marketing at VMware. The successor to VMware Infrastructure 3, vSphere will be released later this quarter, and VMware expects customers to phase it in. (See box for more vSphere features.)

BayScribe, an Edgewater, Md.-based provider of transcription software services to hospitals, is a poster child for VMware's vision for vSphere, in which companies not only run their infrastructure in an internal cloud or external cloud, but also build their business offering there as well. VMware also expects that customers will use vSphere to connect internal and external clouds to create hybrid clouds with parts that live in each world.

BayScribe's Software as a Service (SaaS) offering replaces a hospital's legacy dictation systems with a dictation and transcription service that can live in a private cloud at the hospital or in the data center of one of BayScribe's partners, such as Net Access, a co-location facility. BayScribe is essentially delivering under the SaaS model but, like many service providers, has adopted the cloud services moniker.

About 280 hospitals and 12 transcription service providers are using BayScribe's cloud-based transcription services, which run on VMware Infrastructure 3. Moving forward, BayScribe will use vSphere for on-premise deployments of its services.

Ron Neuenberger, founder and CIO of BayScribe, said the new fault-tolerance capabilities in vSphere will help BayScribe win new, smaller customers such as hospitals with fewer than 100 beds that are behind the curve on adopting dictation systems and can't afford to spend thousands on an in-house dictation system. BayScribe's service costs $495 per hospital per month and about four cents per transcribed line.

"Hospitals want to keep their [dictation data] in-house, but they also want redundance. … Hospitals close down when their transcription services shut down," Neuenberger said. "They need high availability, and we're able to come in and take ESX and fault tolerance to back everything up in the cloud."

Yet VMware, despite its market share and the advances in vSphere, doesn't hold a lock on the cloud computing market, which some IT folks see as no different from time-sharing or SaaS.

"[Cloud computing] really is just the latest version of hosting, the latest marketing term, but for us there is one application we are going to partake in, in the cloud," said Adam Hite, corporate director of IT at Globe University/Minnesota School of Business in Richfield, Minn.

This month, the college will begin using Microsoft Live@edu services to host Exchange email accounts for 10,000 students. "We'll save money because we'll be able to shut down a secondary Exchange environment, which Microsoft will begin running for us," Hite said.

Kroll Factual Data, the Loveland, Colo.-based credit report processing arm of risk consultancy Kroll, has more aggressive plans -- but not on VMware. Kroll Factual Data is evaluating its applications, including proprietary production applications and Oracle financial systems, to see which ones will work in a cloud environment.

The company is also going to begin evaluating cloud computing technologies, starting with Microsoft Azure as opposed to vSphere, since the company is heavily invested in Microsoft, according to Christopher Steffen, Kroll Factual Data's principal technical architect.

Kroll Factual Data has 1,700 servers, 650 of which have been reduced to 22 boxes. Each runs 30 virtual machines using Windows Server 2008 with Hyper-V and Microsoft System Center products such as its Virtual Machine Manager.

As IT tests applications on the virtual machines, it also plans to look at Microsoft's Azure cloud computing platform, which is expected to be highlighted at the Microsoft Management Summit in Las Vegas next month.

"We want to see what Azure will do differently than what we can already do now in our virtualized environment," Steffen said. "The improvements to me would have to be around being able to pool resources, bring together separate systems and utilize resources better than we are able to now -- create an environment that's like a big machine with better management capabilities."

In an ideal world, Steffen would like to partner with other Oracle customers to build an external cloud that would serve all their interests.

"We would like to do resource sharing in an Oracle world, take part in a big Oracle cluster in the cloud where we could share administration, hardware and maybe even licensing costs across three companies with shared interests, or a sister company," Steffen said.

That is years out, however. The application assessment project just got under way, he said, and the regulatory compliance and security questions that arise should companies share financial system resources in the cloud represent a big question mark.

Let us know what you think about the story; email Christina Torode, Senior News Writer.

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