CERN’s Evolution to Cloud Computing Portends Revolution in Extreme IT Productivity?

Transcript of a BriefingsDirect podcast on the move to cloud computing for data-intensive operations, focusing on the work being done by the European Organization for Nuclear Research.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: Platform Computing.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you’re listening to BriefingsDirect. Today, we present a sponsored podcast discussion on some likely directions for cloud computing based on the exploration of expected cloud benefits at a cutting edge global IT organization.

We are going to explore the thinking on how cloud computing both the private and public varieties might be useful at CERN, the European Organization for Nuclear Research in Geneva.

CERN has long been an influential bellwether on how extreme IT problems can be solved. Indeed, the World Wide Web owes a lot of its usefulness to early work done at CERN. Now the focus is on cloud computing. How real is it, and how might an organization like CERN approach cloud?

In many ways CERN is quite possibly the New York of cloud computing. If cloud can make it there, it can probably make it anywhere. That's because CERN deals with fantastically large data sets, massive throughput requirements, a global workforce, finite budgets, and an emphasis on standards and openness.

So please join us, as we track the evolution of high-performance computing (HPC) from clusters to grid to cloud models through the eyes of CERN, and with analysis and perspective from IDC, as well as technical thought leadership from Platform Computing.

Join me in welcoming our panel today, Tony Cass, Group Leader for Fabric Infrastructure and Operations at CERN. Welcome, Tony.

Tony Cass: Pleased to meet you.

Gardner: We’re also here with Steve Conway, Vice President in the High Performance Computing Group at IDC. Welcome, Steve.

Steve Conway: Thanks. Welcome to everyone.

Gardner: And, we're also here with Randy Clark, Chief Marketing Officer at Platform Computing. Welcome Randy.

Randy Clark: Thank you. Glad to be here.

Gardner: Over the last several years, we've seen cloud computing become quite popular as a concept. It remains largely confined to experimentation, but this notion of private cloud computing is being scoped out by many large and influential enterprises as well as large early adopters like CERN.

Let me go to you Steve Conway. What's the difference between private and public cloud and how far away are any tangible benefits of cloud computing from your perspective?

Already here

Conway: Private cloud computing is already here, and quite a few companies are exploring it. We already have some early adopters. CERN is one of them. Public clouds are coming. We see a lot of activity there, but it's a little bit further out on the horizon than private or enterprise cloud computing.

Just to give you an example, we just did a piece of research for one of the major oil and gas companies, and they're actively looking at moving part of their workload out to cloud computing in the next 6-12 months. So, this is really coming up quickly.

Gardner: So, this notion of having a cohesive approach to computing and blending what you do on premises with these other providers isn't just pie in the sky. This is really something people are serious about.

Conway: Well, CERN is clearly serious about it in their environment. As I said, we're also starting to see activity pick up with cloud computing in the private sector with adoption starting somewhere between six months from now and, for some, more like 12-24 months out.

Gardner: Randy Clark, from your perspective, how many customers of Platform Computing would you consider to be seriously evaluating what we now refer to as public or private cloud?

Clark: We have formally interviewed over 200 customers out of our installed base of 2,000. A significant portion -- I wouldn’t put an exact number on that, but it's higher than we initially anticipated -- are looking at private-cloud computing and considering how they can leverage external resources such as Amazon, Rackspace and others. So, it's easily a third and possibly more.

Gardner: Tony Cass, let's go to you at CERN. Tell us first a little bit about CERN for those of our readers who don’t know that much or aren't that familiar. Tell us about the organization and what it does, and then we can start to discuss your perceptions about cloud.

Cass: We're a laboratory that exists to enable, initially Europe’s and now the world’s, physicists to study fundamental questions. Where does mass come from? Why don’t we see anti-matter in large quantities? What's the missing mass in the universe? They're really fundamental questions about where we are and what the universe is.

We do that by operating an accelerator, the Large Hadron Collider, which collides protons thousands of times a second. These collisions take place in certain areas around the accelerator, where huge detectors analyze the collisions and take something like a digital photograph of the collision to understand what's happening. These detectors generate huge amounts of data, which have to be stored and processed at CERN and the collaborating institutes around the world.

We have something like 100,000 processors around the world, 50 petabytes of disk, and over 60 petabytes of tape. The tape is in just a small number of the centers, not all of the hundred centers that we have. We call it "computing at the terra-scale," that's terra with two R's. We’ve developed a worldwide computing grid to coordinate all the resources that we have with the jobs of the many physicists that are working on these detectors.

Gardner: So, to look at the IT problem and unpack it a little bit. You're dealing with such enormous amounts of data. You’ve been in the distribution of these workloads for quite some time. Maybe you could explain a little bit the evolution of how you've distributed and managed such extreme workload?

No central management

Cass: If you look at the past, in the 1990’s, we had people collaborating, but there was no central management. Everybody was based at different institutes and people had to submit the workloads, the analysis, or the Monte Carlo simulations of the experiments they needed.

We realized in 2000-2001 that this wasn’t going to work and also that the scale of resources that we needed was so vast that it couldn’t all be installed at CERN. It had to be shared between CERN, a small number of very reliable centers we call the Tier One centers and then 100 or so Tier Two centers at the universities. We were developing this thinking around the same time as the grid model was becoming popular. So, this is what we’ve done.

What a lot of the grid academics have done is in understanding or exploring what could be done with the grid, as an idea. What we've been focusing on is making it work and not pushing the envelope in terms of the technology, but pushing the envelope in terms of the scale to make sure that it works for the users. We connect the sites. We run tens of thousands of jobs a day across this and gradually we’ve run through a number of exercises to distribute the data at gigabytes a second and tens of thousands of jobs a day.

We've progressively deployed grid technology, not developed it. We've looked at things that are going on elsewhere and made them work in our environment.

Gardner: As I understand it, the interest you have in cloud isn’t strictly a matter of ripping and replacing, but augmenting what you're already doing vis-a-vis these grid models.

Cass: Exactly. The grid solves the problem in which we have data distributed around the world and it will send jobs to the data. But, there are two issues around that. One is that if the grid sends my job to site A, it does so because it thinks that a batch slot will become available at site A first. But, maybe a grid slot becomes available at site B and my job is site A. Somebody else who comes along later actually gets to run their job first.

Today, the experiment team submits a skeleton job to all of the sites in order to detect which site becomes available first. Then, they pull down my job to this site. You have lots of schedulers involved in this -- in the experiment, the grid, and the site -- and we're looking at simplifying that.

These skeleton jobs also install software, because they don’t really trust the sites to have installed the software correctly. So, there's a lot of inefficiency there. This is symptomatic of a more general problem. Batch workers are good at sharing resources that are relatively static, but not when the demand for resource types changes dynamically.

So, we’re looking at virtualizing the batch workers and dynamically reconfiguring them to meet the changing workload. This is essentially what Amazon does with EC2. When they don’t need the resources, they reconfigure them and sell the cycles to other people. This is how we want to work in virtualization and cloud with the grid, which knows where the data is.

Gardner: Steve Conway, you’ve been tracking HPC for some time at IDC. Maybe you have some perceptions on how CERN is a leading adopter of IT over the years, the types of problems they're solving now, or the types of problems other organizations will be facing in the future. Could you tell us about this management issue and do you think that this is going to become a major requirement for cloud computing?

World technology leader

Conway: Starting with CERN, their scientists have earned multiple Nobel prizes over the years for their work in particle physics. As you said before, CERN is where Tim Berners-Lee and his colleagues invented the World Wide Web in the 1980s.

More generally, CERN is a recognized world leader in technology innovation. What’s been driving this, as Tony said, are the massive volumes of data that CERN generates along with the need to make the data available to scientists, not only across Europe, but across the world.

For example, CERN has two major particle detectors. They're called CMS and ATLAS. ATLAS alone generates a petabyte of data per second, when it’s running. Not all that data needs to be distributed, but it gives you an idea of the scale or the challenge that CERN is working with.

In the case of CERN’s and Platform’s collaboration, as Tony said, the idea is not just to distribute the data but also the applications and the capability to run the scientific problem.

CERN is definitely a leader there, and cloud computing is really confined today to early adopters like CERN. Right now, cloud computing services constitute about $16 billion as a market.

IDC: By 2012, which is not so far away, we project that spending for cloud computing is going to grow nearly threefold to about $42 billion. That would make it about 9 percent of IT spending.

That’s just about four percent of mainstream IT spending. By 2012, which is not so far away, we project that spending for cloud computing is going to grow nearly threefold to about $42 billion. That would make it about 9 percent of IT spending. So, we predict it’s going to move along pretty quickly.

Gardner: How important is this issue that Tony brought up about being able to manage in a dynamic environment and not just more predictable static batch loads?

Conway: It’s the single biggest challenge we see for not only cloud computing, but it has affected the whole idea of managing these increasingly complex environments -- first clusters, then grids, and now clouds. Software has been at the center of that.

That’s one of the reasons we're here today with Platform and CERN, because that’s been Platform’s business from the beginning, creating software to manage clusters, then grids, and now clouds, first for very demanding, HPC sites like CERN and, more recently, also for enterprise clients.

Gardner: Randy Clark, as you look at the marketplace and see organizations like CERN changing their requirements, what, in your thinking, is the most important missing part from what you would do in management with HPC and now cloud? What makes cloud different, from a management perspective?

Dynamic resources

Clark: It’s what Tony said, which is having the resources be dynamic not static. Historically, clusters and grids have been relatively static, and the workloads have been managed across those. Now, with cloud, we have the ability to have a dynamic set of resources.

The trick is to marry and manage the workloads and the resources in conjunction with each other. Last year, we announced our cloud products -- Platform LSF and Platform ISF Adaptive Cluster -- to address that challenge and to help this evolution.

Gardner: Let’s go back to Tony Cass. Tell me what you’re doing with cloud in terms of exploration. I know you’re not in a position to validate, or you haven’t put in place, any large-scale implementation or solutions that would lead the market. But, I’m very curious about what the requirements are. What are the problems that you're trying to solve that you think cloud computing specifically can be useful in?

Cass: The specific problem that we have is to deliver the most physics we can within the fixed budget and the fixed amount of resources. These are limited either by money or by data-center cooling and generally are much less than the experiment wants. The key aim is to deliver the most cycles we can and the most efficient computing we can to the physicists.

I said earlier that we're looking at virtualization to do this. We’ve been exploring how to make sure that the jobs can work in a virtual environment and that we can instantiate virtual machines (VMs), as necessary, according to the different experiments that are submitting workloads at one time to integrate the instantiation of VMs with the batch system.

At the moment, we're looking at how you can reliably send a virtual image that's generated at one place to another site.

Once we got that working, we figured that the real problem was managing the number of VMs. We have something like 4,000 boxes, but if you have a VM per call, plus a few spare, then it can easily get to 60,000, 70,000, or 80,000 VMs. Managing these is the problem that we are trying to explore now, moving away from “can we do it” to “can we do it on a huge scale?”

Gardner: Are you yet at the point where you want to be able to manage the VMs that you have under your own control, and perhaps starting to deploy virtualized environments and workloads in someone else’s cloud and make them managed and complementary.

Cass: There are two aspects to that. The resources in our community are at other sites, and all of the sites are very independent. They are also academic environments. So, they are exploring things in their own way as well. At the moment, we're looking at how you can reliably send a virtual image that's generated at one place to another site.

Amazon does this, but there are tight constraints in the way they manage that cluster, because they built it thinking about this. Universities maybe didn’t build their own cluster in a way that separates that out from some of the other computing they're doing. So, there are security and trust implications there that we are looking at. That will be a thing to collaborate on long-term.

More cost effective

Certainly, if we configure things in our own way, when we look in a cloud environment, perhaps it will be more cost effective for us to only purchase the equipment we need for the average workload and they buy resources from Amazon or other providers. But, there are interesting things you have to explore about the fact that the data is not at Amazon, even if they have the cycles.

There are so many things that we’re thinking about. The one we’re focusing on at the moment is effectively managing the resources that we have here at CERN.

Gardner: Steve Conway, it sounds as if CERN has, with its partnered network, a series of what we might call private-cloud implementations and they're trying to get them to behave in concert at what we might call at a public cloud level. That exercise could, as with the World Wide Web, create some de-facto standards and approaches that might, in fact, help what we call hybrid cloud computing moving forward. Does that fairly surmise where we are?

Conway: That’s right. There are going to have to be more rigorous open standards for the clouds. What Tony was talking about at CERN is something that we see elsewhere. People are turning to public clouds today -- "turning to" just meaning exploring at this point for a way to handle overload work and search workloads.

But, we're seeing some smaller and medium-size businesses looking to public clouds as a way to avoid having to purchase their own internal resources . . . and also as a way of avoiding having to hire experts who know how to operate them.

The Internet itself is a pretty high latency network, if you think of it that way. People are looking to send portions of the workload that doesn't have a lot of communication dependencies particularly inter-processor communication dependencies, because the latency doesn't support that.

But, we're seeing some smaller and medium-size businesses looking to public clouds as a way to avoid having to purchase their own internal resources, clusters for example, and also as a way of avoiding having to hire experts who know how to operate them. For example, engineering services firms don't have those experts in house today.

Gardner: Back to you Tony Cass, I know this is still a bit hypothetical, but if there were the standards in place, and you were able to go to a third-party cloud provider for some of these spikes or occasionally dynamically generated workloads that perhaps exceed your current on-premise’s capabilities, would this be a financial boon to you, where you could protect your pricing and you could decide the right supply and demand fit when it comes to these extreme computing problems?

Cass: It would certainly be a boon. The possibility is being demonstrated by experiments that are actually based at Brookhaven to do simulations that are CPU-intensive, where they don't need much data transfer or data access. They have been able to run simulations cost-effectively with EC2.

Although their cycles, compared to some of the things we're doing, are more expensive, if we don't have to buy all of the resources, we could certainly save money. Another aspect is that it is beyond money in some sense. If you need to get something fixed for a conference, and you are desperately trying to decide whether or not you’ve discovered the Higgs then it's not a case of “money's no object,” but you can get the resources from a cloud much more quickly than you can install capacity at CERN. So both aspects are definitely of interest.

Gardner: Randy Clark, this makes a great deal of sense from the perspective of a large research organization. But, we're not just talking about specific workloads. We're talking about workloads that will be common across many other vertical industries or computing environments. Can you name a few, or mention some from your experience, where we should expect the same sorts of economic benefits to play out.

Different use cases

Clark: What we're seeing is across industries. Financial services is certainly taking a leadership role. There's a lot going on in the semiconductor or electronic industry. Business intelligence (BI) is across industries and government. So, across industries, we see different use cases.

To your point, these use cases are enterprise applications to run the business, and we're seeing that in Java applications, test and development environments, and traditional HPC environments.

That's something driven by the top of the organization. Tony and Steve laid it out well. They look at the public/private cloud economically, and say, "Architecturally, what does this mean for our business?" Without any particular application in mind they're asking how to evolve to this new model. So, we're seeing it very horizontally and, to your point, in enterprise and HPC applications.

Gardner: Steve Conway, thinking about these large datasets, Randy brought up BI, and that, of course, means warehousing, data analytics, and advanced analytics. A lot of organizations are creating datasets at a scale never anticipated, never mind seen before, things from sensors, mobile devices, network computing, or social networking.

BI is one of those markets that, in its attributes, straddles the world of HPC and enterprise computing just as financial services does . . .

How do we bring together these compute resources, the raw power with these large data sets. I think this is an issue that CERN might also be a bellwether on, in somehow managing these large data sets and the compute power, bringing them architecturally into alignment.

Conway: BI is one of those markets that, in its attributes, straddles the world of HPC and enterprise computing just as financial services does, in the sense that they have workloads that don't have a whole lot of communications dependencies. They don't need networks with very high latency for the most part.

You see organizations like the University of Phoenix, which has 280,000 online students, that have already made this evolution -- in this case, with Platform helping them out -- from clusters to grid computing today. Now, they're looking toward cloud computing as a way to take them further.

You also see that not just in the private sector side. One of the other active customers that's really looking in that same direction is the Centers for Disease Control (CDC), which has moved to from clusters to grid computing.

What you're seeing here is people who have already stepped through the earlier stages of this evolution. They've gone from clusters to grid computing for the most part and now are contemplating the next move to cloud computing. It's an evolutionary move. It could have some revolutionary implications, but, from a technological standpoint, sometimes evolutionary is much safer and better than revolutionary.

Gardner: Tell us about some of the solutions that you now need to bring to market or are bringing to market around management and other issues? Where have you found that the rubber hits the road, in terms of where people can take this in real time? What's the current state of the art? Rather than talking about hypothetical, what's now possible, when it comes to moving from cluster and grid to the revolution of cloud?

Interaction of technologies

Clark: What Platform sees is the interaction of distributed computing and new technologies like virtualization requiring management. What I mean by that is the ability, in a large farm or shared environment, to share resources and then make those resources dynamic. It's the ability to add virtualization into those on the resource side, and then, on the server side, to make it Internet accessible, have a service catalog, and move from providing IT support to truly IT as a competitive service.

The state of the art is that you can get the best of Amazon, ease of use, cost, accessibility with the enterprise configuration, scale, and dependability of the enterprise grid environment.

There isn't one particular technology or implementation that I would point to, to say "That is state of the art," but if you look across the installations we see in our installed base, you can see best practices in different dimensions with each of those customers.

Gardner: Randy, what are some typical ways that you're seeing people getting started, when they want to make these leaps from evolutionary progression to revolutionary paybacks? Where do they start making that sort of catalytic difference?

Taking a step back, we see customers thinking about architecturally how do they want to have that management layer.

Clark: The evolution is the technology, as Steve said. The revolution is in the approach architecturally to how to get to that new spot.

Taking a step back, we see customers thinking about architecturally and how they want to have that management layer. What is that management layer going to mean to them going forward? And, can they quickly identify a set of applications and resources and get started?

So, there is an architecture piece to it, thinking about what the future will hold, but then there is a very pragmatic piece -- let's get going, let's engage, let's build something and be able to scale that out over time. We saw that approach in grid computing. We're encouraging folks to think, but then also to get started.

Gardner: Tony Cass at CERN, what are your next steps? Where would you expect to be heading next as you explore the benefits and possible real-world opportunities?

Cass: We’re definitely concentrating for the moment on how we exploit effective resources here. The wider benefits we'll have to discuss with our community.

Gardner: What would you like to see happen next?

Focusing on delivery

Cass: What I would like to see happen next is a definite cloud environment at CERN, where we move from something that we're thinking about to something that is in operation, where we have the ability to use resources that aren’t primarily dedicated for physics computing to deliver cycles to experiment. I'd like to see a cloud, a dynamically evolving environment in our computer center. We’re convinced it's possible, but delivering that is what we’re focusing on.

Gardner: Steve Conway, where do you see things headed next? What are the next steps that we should look for, as we move from that evolutionary progression to more of a revolutionary productivity?

Conway: It's along a couple of dimensions. One is the dimension of people actually working in these environments. In that sense, the CERN-Platform collaboration is going to help drive the whole state of the art forward over the next period of time.

People are a little bit concerned about testing their data there. The evolution of standards is going to accelerate this trend.

The other one, as Randy mentioned before, it that the evolution of standards is going to be important. For example, right now, one of the barriers to public-cloud computing is vendor lock-in, where the cloud, the Amazons, the Yahoos, and so forth are not necessarily interoperable. People are a little bit concerned about testing their data there. The evolution of standards is going to accelerate this trend.

Gardner: Why don’t I give the last word today to Randy? Tell us about some information that's available out there for folks who are looking to explore and take some first steps toward this more revolutionary benefit.

Clark: I'd encourage everybody to visit our website. There are a number of white papers, webinars, and webcasts that we've done with other customers to highlight some other use cases within development, test, and production environments. I'd point people to the resource page on our website www.platform.com.

Gardner: I want to thank our guests. This has been a very interesting discussion, and I certainly look forward to following what CERN does, because I do think that they’re going to be a leader in terms of what many others will be end up doing in B2B cloud computing.

Thank you to Tony Cass, Group Leader for Fabric Infrastructure and Operations at CERN. Thank you, sir.

Cass: Thank you.

Gardner: And also a good, big thank you to Steve Conway, Vice President in the High Performance Computing Group at IDC. Thank you, Steve.

Conway: Thanks.

Gardner: And also, of course, thank you to Randy Clark, Chief Marketing Officer at Platform Computing.

Clark: Thank you for the opportunity.

Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast on what likely outcomes we can expect from cloud computing and architecture, on the progression from grid to cloud computing, and moving into a more revolutionary set of benefits. Thanks for listening and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: Platform Computing.

Transcript of a BriefingsDirect podcast on the move to cloud computing for data-intensive operations, focusing on the work being done by the European Organization for Nuclear Research. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

You may also be interested in:

• Cloud computing means more than cost savings: New models will transform business, say HP and Capgemini
  
  
• Role and perception of enterprise architects needs to align better with business goals, panel discovers
  
  
• Enterprises seek new ways to package and deliver applications and data to mobile devices

BriefingsDirect Analysts Discuss Ramifications of Google-China Dust-Up over Corporate Cyber Attacks

Edited transcript of a BriefingsDirect Analyst Insights Edition podcast, Volume 50, on what the fallout is likely to be after Google's threat to leave China in the wake of security breaches.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Charter Sponsor: Active Endpoints.

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at www.activevos.com/insight.

Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Volume 50. I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.

This periodic discussion and dissection of IT infrastructure related news and events with a panel of industry analysts and guests, comes to you with the help of our charter sponsor Active Endpoints, maker of the ActiveVOS business process management system.

Our topic this week on BriefingsDirect Analyst Insights Edition focuses on the fallout from the Google’s threat to pull out of China, due to a series of sophisticated hacks and attacks on Google, as well as a dozen more IT companies. Due to the attacks late last year, Google on January 12th vowed to stop censoring Internet content for China’s web users and possibly to leave the country altogether.

This ongoing tiff between Google and the Internet control authorities in China’s Communist Party-dominated government have uncorked a Pandora’s Box of security, free speech and corporate espionage issues. There are human rights issues and free speech issues, questions on China’s actual role, trade and fairness issues, and the point about Google’s policy of initially enabling Internet censorship and now apparently backtracking.

But, there are also larger issues around security and Internet governance in general. Those are the issues we’ll be focusing on today. So, even as the US State Department and others in the US federal government seek answers on China’s purported role or complicity in the attacks, the repercussions on cloud computing and enterprise security are profound and may be long-term.

We’re going to look at some of the answers to what this donnybrook means for how enterprises should best protect their intellectual property from such sophisticated hackers as government, military or, quasi-government corporate entities and whether cloud services providers like Google are better than your average enterprise or even medium-sized business at thwarting such risks.

We'll look at how users of cloud computing should trust or not trust providers of such mission-critical cloud services as email, calendar, word processing, document storage, databases, and applications hosting. And, we’ll look at how enterprise architecture, governance, security best practices, standards, and skills need to adapt still to meet these new requirements from insidious world-class threats.

So, join me now in welcoming our panel for today’s discussion. Welcome to Jim Kobielus, senior analyst at Forrester Research. Hello, Jim.

Jim Kobielus: Hi Dana. How are you, buddy?

Gardner: Jason Bloomberg, managing partner at ZapThink.

Jason Bloomberg: Hi. Glad to be here.

Gardner: Jim Hietala, Vice President for Security at The Open Group.

Jim Hietala: Hello, Dana. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

Gardner: Elinor Mills, senior writer at CNET. Hello, Elinor.

Elinor Mills: Hi.

Gardner: And Michael Dortch, Director of Research at Focus.

Michael Dortch: Hi, Dana, and greetings, everyone.

Gardner: Thanks. Great having you with us Michael.

Elinor, let me start with you. You’ve been covering Internet security, and even Google specifically, for several years now. When we think of security, we often think of teenage hackers or lowbrow malware and pesky pop-ups, but do you think that this Google-China finger-pointing business has, in a sense, changed the way security is viewed.

Pointing fingers

Mills: Oh, absolutely. We’ve got a huge first public example of a company coming out and saying, not only that they've been attacked -- companies don’t want to admit that ever and it’s all under the radar -- but also they’re pointing the fingers. Even though they're not specifically saying, "We think it’s the Chinese state," but they think enough of it that they're willing to threaten to pull out of the country.

It’s huge and it’s going to have every company reevaluating what their response is going to be -- not just how they’re going to do business in other countries, but what is their response going to be to a major attack.

Gardner: Does this mean that the companies, enterprises specifically, need to rethink both security for what you'd call criminal activity, but now think at a higher level -- higher level being government versus government?

Mills: Yes, if they’re big companies -- mid-size companies maybe not so much. Bigger companies have been targeted with espionage for a while, especially if they have any kind of technology that China or any other country might want. I think there's going to be more emphasis on it. They’re going to have to think about it. For smaller companies, it’s not going to be as much of a problem.

Gardner: Jim Kobielus, do you view this as a big issue or is this more of the same? Have the folks that you deal with, who are protecting their data and information, been aware of these threats? Is this more of a public relations problem than a real one?

Kobielus: I won’t say it’s just a public relations problem. It is a real one. If you’re going to be a multinational firm -- I've heard the term "supernational" used as well -- you’re not above the laws and governmental structures of the nations within which you operate. It's always been this way. This is a sovereign nation, and you're subject to their laws.

If you’ve been a multinational firm before, or if you wish to be one, you’ve got to play by whatever rules are imposed upon you to operate in these spheres. One of the key issues for Google is whether they want to continue to be a business that’s growing in this particular market, subject to whatever rules are laid down, whether they want to be a crusader for civil rights, human rights, whatever, in the Western context, or if they’re trying to be both. It means they’re going to have to contend with the government of the People’s Republic of China on their own turf -- and good luck there.

Gardner: Don’t you think, Jim, that these issues transcend national boundaries or even laws that govern as a particular sovereign nation? If your servers are in one country, why should it be bound by the laws in another?

Kobielus: Well, your servers are physically hosted somewhere. Your access is from people, end users, in many nations that are trying to access whatever services you provide from those physically hosted servers.

So, your users and your servers are subject to the laws and the firewalls and security constraints and so forth in the various nations within which you will physically operate, as well as where your supply chain and your customer base will physically operate. None of these segments, these nodes, in this broader value chain are free floating in space like they're elevated platforms in the Jetsons.

Wakeup call?

Gardner: I think Google is going to perhaps challenge the way you’re looking at this. It should be interesting to see how it pans out. Jason Bloomberg, does this provide some sort of a wakeup call for enterprises and service providers as well about how they architect? Do they need to start architecting for a larger class of threats?

Bloomberg: It’s not as big of a wakeup call as it should be. You can ask yourself, "Is this an attack by some small cadre of renegade hackers or is this attack by the government of the People’s Republic of China? That’s an open question at this point.

Who is the victim? Is it Google, a corporation, or the United States? Is it the western world that is the victim here? Is this a harbinger of the way that international wars are going to be fought down the road?

We’ve all been worried about cyber warfare coming, but we maybe don’t recognize it when we see it as a new battlefield. It's the same as terrorism. It’s not necessarily clear who the participants are. We have this 18th Century view of warfare, where two armies meet on the battlefield and slug it out with the weapons of the day. But, terrorism has introduced new types of weapons and new types of battlefields.

Now we have cyber warfare, where it’s not even necessarily clear who the perpetrator is, who the victim is, or who the offended party is. This is a whole new context for conflict in the world.

When you place the enterprise into this context, well, it’s not necessarily just that you have a business within the context of a government subject to particular laws of particular government, you have the supernational, as Jim was taking about where large corporations have to play in multiple jurisdictions. That’s already a governance challenge for these large enterprises.

We already have this awareness that every single system on our network has to look out for itself and, even then, has levels of vulnerability.

Now, we have the introduction of cyber warfare, where we have concerted professional attacks from unknown parties attacking unknown targets and where it’s not clear who the players are. Anybody, whether it’s a private company, a public company, or a government organization is potentially involved.

They may not even fully know how involved they are or whether or not they are being targeted. That basically raises the bar for security throughout the entire organization. We’ve seen this already, where perimeter-based security has fallen by the wayside as being insufficient.

Sure, we need firewalls, but even though we have systems inside our firewalls, it doesn’t mean they are secure. A single virus can slip through the firewall with no problem at all. We already have this awareness that every single system on our network has to look out for itself and, even then, has levels of vulnerability. This just takes it to the national level.

Kobielus: But, there has always been corporate espionage and there’s always been vandalism perpetrated by companies against each other through subterfuge, and also by companies or fronts operating as the agent of unseen foreign power. This is what was the Germans did in this country before World War II to infiltrate, or what the Soviet Union did after World War II.

This is international real-politic as usual, but in a different technological realm. Don’t just focus on China. Let’s say that Google had a data center in Venezuela. They could just as easily have that expropriated by Hugo Chavez and his government. In China, that’s a possibility too.

Nothing radically new

What I’m saying is that I don’t see anything radically or fundamentally new going on here. This is just a big, powerful, and growing world power, China, and a big and growing world power on a tech front Google, colliding.

Mills: They have so much data. They’re becoming a service provider for the world. It’s not just their data that’s being targeted. You’ve got the City of Los Angeles, you’ve got DC, other government entities, moving onto Google Apps. So, the end target in the cloud is different than just the employees of one company.

Dortch: That challenge puts Google in the very interesting position of having to decide. Is it a politically neutral corporation or is it a protector of the data that its clients around the world, not just here, and not just from governments but corporations? Is it a protector and an advocate of protection for the data that those clients have been trusted to it? Or, is it going to use the fact that it is a broker of all that data to sort of throw its muscle around and take on governments like China’s in debates like this.

The implications here are bigger than even what we’ve been discussing so far, because they get at the very nature of what a corporation is in this brave new network world of ours.

And, this is taking place against the backdrop where the Supreme Court just decided that corporations in the United States have the same free speech rights and political campaigns as individuals. We're not clear at all on what this is going to mean for how the entity called a corporation is perceived, especially in the cloud.

Gardner: Thank you, Michael. Jim Hietala, help me understand, from your perspective, is this a game-changing event or is this more business as usual when it comes to corporate security.

Hietala: In terms of the visibility it’s gotten and the kinds of companies that were attacked, it’s a little bit game-changing. From the information security community perspective, these sorts of attacks have been going on for quite a while, aimed at defense contractors, and are now aimed at commercial enterprises and providers of cloud services.

I don’t think that the attacks per se are game-changing. There’s not a lot new here. It’s an attack against a browser that was couple of revs old and had vulnerability. The way in which the company was attacked isn’t necessarily game-changing, but the political ramifications around it and the other things we’ve just been talking about are what make it a little game-changing.

Gardner: I’d like to understand more about Michael Dortch’s point about the cloud providers and Elinor's as well. Should people think about a cloud provider as the best defense against these things, because they are current and they’ve got the power of scale they need to make this secure or their business itself is undermined?

Or, is this something that’s best done at the individual level, company by company, firewall by firewall? Does anyone have some thoughts about that?

Dortch: I’m reminded of what Ronald Reagan famously said, “Trust, but verify.” It’s one of those things where the cloud becomes a part of a good defense, but you can’t place all of your eggs in any one basket.

Combining resources

Companies that are doing business internationally and that worry about this sort of thing -- and they all should -- are going to have to combine cloud-based resources from reputable companies with documented protections in place with other protections, in case the first line of defense fails or is challenged in some major way.

Kobielus: In some ways, we all perceive what a cloud provider like Google needs to be regarded as in international law. It’s almost like a cyber Switzerland. Basically, it’s almost like, in another metaphor, an off-shore bank for your data and your other assets, in the same neutral role that Switzerland has played through the years, including during World War II for Nazi secreted assets.

In other words, it’s somehow a sovereign state, in its own right, with the full rights and privileges accruing thereto. I don’t think anybody is willing to take it that far in international law, but I think there is this perception that for cloud providers like Google to really realize their intended mission, there needs to be some change in international governance of sort of assets that transcend nation states.

Bloomberg: You could actually think of that as a reductio argument, because there isn’t going to be such a change. Cloud environments do not have that sort of power or capability and, if anything, cloud environments reduce the level of security.

They don’t increase it for the very reason that we don’t have a way of making them sovereign in their own right. They’re always not only subject to the laws of the local jurisdiction, but they’re subject to any number of different attacks that could be coming from any different location, where now the customers aren’t aware of this sort of vulnerability.

So, “Trust, but verify,” is a good point, but how can you verify, if you’re relying on a third party to protect your data for you? It becomes much more difficult to do the verification. I'd say that organizations are going to be backing away from cloud, once they realize just how risky cloud environments are.

All enterprises still are going to have to be at the top of their game, in terms of protecting their assets. . .

Mills: Microsoft’s general counsel Brad Smith this week gave a keynote at the Brookings Institute Forum, and he talked about modernizing and updating the laws to adapt specifically to the cloud. That included privacy rights under the Electronic Communications Privacy Act being more clearly defined, updating the Computer Fraud and Abuse Act, and setting up a framework so that differences in the regulations and practices in various countries can be worked out and reconciled.

Gardner: What happens if you are a small to medium-sized business and you might not have the resources to put into place all the security you need to deal with something like a China or Venezuela, or perhaps some large company that’s in another country that wants to take your intellectual property? Are you better going to a cloud provider and, in a sense, outsourcing security? Jim Hietala, does that make sense for a small to medium-sized business?

Hietala: I don’t think you can make that case yet today. I don’t think there is a silver-bullet cloud provider out there that has superior security to have that position. All enterprises still are going to have to be at the top of their game, in terms of protecting their assets, and that extends to small or medium businesses.

At some point, you could see a cloud provider stake out that part of the market to say, "We’re going to put in a superior set of controls and manage security to a higher degree than a typical small-to-medium business could," but I don’t see that out there today.

Waiting for disaster

Dortch: All of us who’ve doing this for a while, I think, will agree that where security is concerned, especially where cyber security is concerned, at least in North America, where I’m most familiar, companies tend not to talk about it or do anything, until there is some major catastrophe.

Nobody buys insurance, until the house next doors theirs burns down. So, from that perspective, this event could be useful. In terms of protecting their data, one of the issues that incidents like this raises is exactly how much corporate data is already in the cloud.

Many small businesses outsource payroll processing, customer relationship management (CRM), and a whole bunch of things. A lot of that stuff is outsourced to cloud service providers, and companies haven’t asked enough questions yet about exactly how cloud providers are protecting data and exactly how they can reassure that nothing bad is going to happen to it.

For example, if their servers come under attack, can they demonstrate credibly how data is going to be protected. These are the types of questions that incidents like this can and should raise in the minds of decision-makers at small and mid-sized businesses, just as they're starting to raise these issues, and have been raising them for a while, among decision-makers at larger enterprise.

Kobielus: I think what will happen is that some cloud providers will increasingly be seen as safe havens for your data and for your applications, because (A) they have the strong security, and (B) they are hosted within, and governed by, the laws of nation states that rigorously and faithfully try to protect this information, and assure that the information can then be removed -- transferred out of that country fluidly by the owners, without loss.

How about governments in general, maybe it's the United Nations who steps in? Who is the ultimate governor of what happens in cyber space?

In other words, it's like the Cayman Islands of the cloud -- that offshore banking safe haven you can turn to for all this. Clearly, it's not going to be China.

Gardner: We’ve seen in the history of the United States -- and, of course, the business world at large -- that whenever threats elevate to a certain level, the government steps in. We have seen with piracy, border controls, taxation, trade mandates, freedom pacts, and so forth. Whenever a threat arises, businesses get up and say, "Hey, we pay taxes. Uncle Sam, please come in and save us," whether it's through the navy or some technology.

Should we expect that, if we come to understand that this was an attack against American business interests from a foreign government of some kind, that it's up to the government to solve the problem? How about governments in general, maybe it's the United Nations who steps in? Who is the ultimate governor of what happens in cyber space?

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at www.activevos.com/insight.

Dortch: Dana, in 2007, the National Academies of Science issued a cyber security report, and it included ten provisions that, at that time at least, were looked at as potentially the foundation for a cyber security bill of rights. Maybe it's time to reawaken discussions like that. Maybe what's needed is the cyberspace equivalent of the United Nations.

This is a lot of heavy lifting that we're talking about, and businesses have problems to solve and threats to address today. So your question begs another one: how do we get to the stage we need to be, where there can be trusted offshore equivalence databanks and all of that? And, what do we do in the meantime? I'm not smart enough to have answers to those questions, but they're really interesting.

We know the game

Kobielus: At a governmental level, obviously there will always be approaches and tools available to any sovereign nation -- treaties, negotiations, war, and so forth. We all know that. Clearly, we all know the game there.

In terms of who has responsibility and how will governance best practices be spread uniformly across the world in such areas of IT protection, it's going to be some combination of multilateral, bilateral, and unilateral action. For multilateral, the UN points to that, but there are also regional organizations. In Southeast Asia there is ASEAN, and in the Atlantic there is NATO, and so forth.

So, there is going to be a combination of all that. For this administration and subsequent administrations in the U.S., it’s just a matter of their putting together a clear agenda for trying to influence the policies, practices, and enforcement within China and other nations that may prove unreliable in terms of protecting the interest of our businesses.

Dortch: And, Secretary of State Clinton’s director of innovation -- I believe that's his title -- has already said publicly that it's a linchpin of our negotiating strategy with China and other countries.

Just as we, as a country, are an advocate for human rights, we're increasingly and more overtly advocating that other country’s citizens have free access to the Internet and basically have the cyber equivalent of human rights. That's going to play out in some very interesting ways as it becomes a larger part of our global diplomatic effort.

At a governmental level, obviously there will always be approaches and tools available to any sovereign nation -- treaties, negotiations, war, and so forth.

Kobielus: Keep in mind that the UN had a human rights declaration in 1946. China signed up, the Soviet Union signed up, and it didn’t make a whole lot of difference in terms of how they treated their own people over time. Keep in mind that such declarations are fine and dandy, but often don’t have much impact on the ground.

Gardner: So, enforcement is important. What we’ve seen so far is the enforcement of the marketplace, and I think that's what Google is up to in many respects. They’re saying, "Listen, we are a big enough company. We have such sophisticated technology and our price points for our services are so low that you would be at a disadvantage as a competitive nation not to have us working inside of your market, China."

Then, China says back to Google, "We are potentially, if not already, the biggest Internet market in the world, so don’t you think you have to adhere to our dictates in order to play ball in our court?" So, there is sort of a tussle within market powers. Is that's going to be the best way for these issues to be resolved?

Kobielus: It’s going to have to be resolved in the China context. They are the middle kingdom. They’ve seen themselves as the center of the universe, and it's not just me saying that. It's all manner of China scholars. This not fundamentally any different from the way in which Chinese centralized bureaucracy and governance for over 2,000 years.

Gardner: Jason Bloomberg, do you think that the traditional free market -- the powerful interests and the money -- are enough to balance the risks associated with security in this newest age?

Who decides "enough?"

Bloomberg: When you say "enough," the question is who decides what is enough. We have these opposing forces. One is that information should be free, and the Internet should be available to everybody. That basically pushes for removing barriers to information flow.

Then you have the security concerns that are driving putting up barriers to information flow, and there is always going to be conflict between those two forces. As increasingly sophisticated attacks develop, that pushes the public consensus toward increasing security.

That will impact our ability to have freedom, and that's going to be, continue to be a battle that I don’t see anybody winning. It's’ really just going to be an ongoing battle as technology improves and as the bad guys attacks improve. It's going to be an ongoing battle between security and freedom and between the good guys and the bad guys, as it were, and that's never going to change.

Gardner: Now, taking up on your point, Jason Bloomberg, about this being a spy-versus-spy kind of world, that's been that way so far. We thought about how governments might come in. Large corporations can play their role. Cloud providers might have to step in and offer some sort of an SLA-based protection or outsourced security opportunity of some kind.

What about going in the other direction? What if we go down to the individual who says, "If I'm going to play in the cloud or in this world-class cyber warfare environment, I want to have high encryption. I want to be able to authenticate myself in the best way possible. Therefore, I’ll give up some convenience. I might even pay a price, but I want to have the best security around my identity and I want to be able to play with the big boys, when it comes to encryption and authentication?"

If you're talking about specific individuals, it’s almost hopeless, because your average individual consumer doesn’t have the level of knowledge to go out and find the right solutions to protect themselves today.

We don’t really have an opportunity for those people to say, "I want to exercise security at an individual level." Jim Hietala, is there anything like that out there to get them to move towards the individual level of self-help, when it comes to high levels of security?

Hietala: Large enterprises are going to have to be responsible for the security of their information. I think there are a lot of takeaways for enterprises from this attack. If you're talking about specific individuals, it’s almost hopeless, because your average individual consumer doesn’t have the level of knowledge to go out and find the right solutions to protect themselves today.

So, I'll focus on the large enterprises. They have to do a good job of asset inventory, know where, within their identity infrastructure, they're vulnerable to this specific attack, and then be pretty agile about implementing countermeasures to prevent it. They have to have patch management that's adequate to the task of getting patches out quickly.

They need to do things like looking at the traffic leaving their network to see if people are already in their infrastructure. These Trojans leave traces of themselves, when they ship information out of an organization. When people really understand what happened in this attack, they can take something away, go back, look at what they are doing from a security standpoint, and tighten things up.

If you're talking about individuals putting things in the cloud, that’s a different discussion that doesn’t seem real feasible to me to get them to the point where they can secure their information today.

Centralized directory

Gardner: Jim, I was getting back to what I used to hear almost 20 years ago in the messaging space, when we first started talking about directories, that the directory is only as good as the authentication and the information and verification.

Don’t we need a centralized directory that we can bounce off these credentials and make sure that they are valid and authenticated? But, there was no central place to do that. Is it time for the government or some other agency or organization to come in and create that über directory for that large-scale global authentication capability?

Kobielus: You're talking about identity systems, with a web of trust, PKI and so forth. We've been talking about that for years. About five years ago, I was with a company that was trying to build federated cross-industry identity management for aerospace and defense, one North Atlantic industry, and even that was frightfully complicated. It probably still hasn’t gotten off the ground.

Imagine creating a similar federated directory with all the stronger authentication and encryption and so forth for all industries within the US. Especially consider worldwide. It’s not going to happen. It’s just a huge engineering nightmare, putting together the trust relationships and working out all the interchange and interoperability issues. It’s just overkill. It’s just much more trouble than it’s worth.

Gardner: Too much federation. But what if there are only a handful of major cloud providers? Maybe it’s Google, Yahoo, Amazon, and Microsoft -- and I've just thrown those out. It could be a number of others. They might have the market heft or the technological wherewithal to enforce and deliver such an authentication and federated directory into existence.

I don’t see the people running cloud-computing companies being radically different from the people that run phone companies . . .

Is anybody thinking like I am, that maybe cloud computing is different, that we can start to actually use the scale of these cloud providers to accomplish these large security requirements?

Dortch: You know, Dana, people change a lot more slowly than technology does. Just a few short months ago, a lot of us were outraged, when it turned out that a handful of major telephone service providers had apparently been giving information to the government without the knowledge or consent of the subscribers whose information was manipulated. At least, that's what the published report seemed to indicate.

I don’t see the people running cloud-computing companies being radically different from the people that run phone companies, and I don’t see them being, a priori, any less subject to influence by their own governments, bribes, threats, or anything else than the people who run the phone companies. I think that’s a good idea but I think it’s fraught with the same level of peril.

Kobielus: In fact, look at the last nine years since 9/11 and you can see in all the articles and stories how telcos have just bent over backwards to allow the Feds to come in and survey their users and subscribers and to abscond with call detail records to monitor terrorist and other people's calling patterns, quite often not even using a search warrant. In other words, it's exactly what he said. How can you trust the carrier to safeguard our privacy, when they so easily succumb to such government pressure?

Gardner: So, these are very big issues that will impact us all as individuals and citizens within our national interests, as well as our companies. Yet, no one seems to have a good sense -- and, there are some very bright people on the line today, of how to even go about defining the problem, never mind solving it.

Identity registrars

Kobielus: Dana, there is another point you raised about, why we don't just let the providers become sort of the über identity management registrars and then set a rate among themselves.

Remember about 10 years ago -- I'm getting old, I can remember back 10 or more years -- Microsoft with its MSN Passport fiasco? Microsoft was saying, "We want to be everybody's identity management hub." Then, the huge thing that was raised about it was, "Microsoft wants to control our identities." Then, things like Liberty Alliance and all the others sprung up to say, "No, no, it must be a centralized and better way, so no one company can control all of our online identities."

That whole passport idea was kind of cool in some ways, but was just shot down completely and definitively, because the culture just said, "No, we cannot allow one group to have that much power."

Gardner: They typically didn't trust Microsoft at that point, when it was at perhaps the apex of its power, right?

Kobielus: Exactly. Now, Google is at the apex of their power. Would we trust Google in the same capacity? Look at China. They will become probably the largest economy in the world, in the next 25 years. Can we trust them? No, of course not.

When you have too much power concentrated in one place, people naturally sort of revolt.

When you have too much power concentrated in one place, people naturally sort of revolt. "No, wait, wait. I don't want to give them any more powers than they already have. Let's rethink this whole 'give them control of my identity' thing."

Dortch: It was the desire to get away from too much centralized control that led to the invention of the PC in the first place. It's it's important to keep that in mind in this context.

Gardner: So, if you truly want to be safe, you should just turn off your PC and start sending out mail at 44 cents a pop.

Kobielus: And, then you're not safe from Anthrax, you know.

Gardner: Let's go around our panel. We’re almost out of time. I’d be interested now in hearing some predictions about what you think is going to happen next. We've done a great job at defining the scope, depth, and complexity of this problem set, a very complex undertaking. But, it seems like it's not something that's going to go away. What do you think is going to happen next, Jim Kobielus?

Kobielus: I don't think Google is going to leave China. I even saw a headline today. I think it said that they were going to stay in China and somehow try to work it out with the PRC. I don't know where that's going, but fundamentally Google is a business and has a "don't do evil" philosophy. They're going to continue to qualify evil down to those things that don't actually align with their business interest.

In other words, they're going to stay. There's going to be a lot of wariness now to entrust Google's China operation with a whole lot of your IT -- "you" as a corporation -- and your data. There will be that wariness.

Preferred platforms

Other cloud providers will be setting up shop or hosting in other nations that are more respectful of IP, other nations that may not be launching corporate or governmental espionage at US headquartered properties in China. Those nations will become the preferred supernational cloud hosting platforms for the world.

I can't really say who those nations might be, but you know what, Switzerland always sort of stands out. They're still neutral after all these years. You've got to hand that to them. I trust them.

Gardner: Jason Bloomberg, what do you think is going to happening next?

Bloomberg: In the short-term, the noise is going to die down or going to go back to business as usual. The security is going to need to improve, but so are hacks from the bad guys. It's going to continue, until there is the next big attack. And the question is, "What's it going to be and how big is it going to be?"

We're still waiting for that game changer. I don't think this is a game changer. It's just a way to skirmish. But, if a hacker is able to bring down the internet, for example, targeting the DNS infrastructure to the point that the entire thing collapses, that’s something that could wake people up to say, "We really have to get a handle on this and come up with a better approach."

Gardner: That's mass vandalism. That doesn't really suit the purposes of some of the types of folks we are talking about. They don't want to bring the Internet down. They simply want to get an advantage over their competitors.

From our perspective, we're starting to see more awareness at higher levels in governments that the threats and issues here are real.

Bloomberg: Well, it really depends. We don't know who the bad guys are and what they’re trying to do. There's no single perspective. There's no single bad guy out there with a single agenda. We just don't know. We don't know what the agendas are.

Gardner: We don't know whether we've a level playing field or not?

Bloomberg: We can count on it not being leveled.

Gardner: Right. Jim Hietala, what do you see as some of the short- or medium-term next steps?

Hietala: From our perspective, we're starting to see more awareness at higher levels in governments that the threats and issues here are real. They’re here today. They seem to be state sponsored, and they're something that needs to be paid attention to.

Secretary of State Clinton gave a speech just today, where she talked specifically about this attack, but also talked about the need for nations to band together to address the problem. I don't know what that looks like at this point, but I think that the fact that people at that level are talking about the problem is good for the industry and good for the outlook for solutions that are important in the future.

Gardner: So, perhaps a free world versus an unfree world, at least in cyber terms, and perhaps the free world would have an advantage, or maybe the unfree world would have an advantage. It's hard to say.

Hietala: I'd agree it's hard to say, but the fact that those discussions going on is positive.

Gardner: Elinor Mills, any sense of where things are going?

Leading the way

Mills: I'm horrible at predictions, but I'll just throw this out. I think Google is going to get out of China and try and lead some kind of US corporate effort or be a role model to try to do business in a more ethical way, without having to compromise and censor.

There will be a divergence that you'll see. China and other countries may be pushed more towards limiting and creating their own sort of channel that's government filtered. I think the battle is just going to get bigger. We're going to have more fights on this front, but I think that Google may lead the way.

Gardner: Very good. Michael Dortch, where do you see it going?

Dortch: Elinor is at least partly right. Especially, if Google leaves China, Baidu's going to rise up as being the government approved version of Google for China and its localities. The very next thing Google will do is forge a strong working relationship as it possibly can with Baidu. You might see that model replicated across multiple countries in the world.

In the meantime though, something that -- if I remember correctly -- Astrodienst said almost 30 years ago is important to remember. Privacy is fungible. It's like currency. You're going to see individuals, small businesses, and individual corporate entities forging negotiations, deals, relationships, and accommodation that treat privacy and security as currency.

If it costs me a little bit more to do business here, I'm going to think seriously about it. Every once in a while, I'm going to swallow hard and pay the piper.

Google made itself into a figurehead of representing what a free enterprise approach could do. It's not state sponsored or nationalistic. It's corporate sponsored.

Gardner: Great. I'm going to throw my two cents as well. This boils down to almost two giant systems or schools of thought that are now colliding at a new point. They've collided at different points in the past on physical sovereignty, military sovereignty, and economic sovereignty. The competition is between what we might call free enterprise based systems and state sponsorship through centralized control systems.

Free enterprise won, when it came to the cold war, but it's hard to say what's going to happen in the economic environment where China is a little different beast. It's state sponsored and it's also taking advantage of free enterprise, but it's very choosy about what it allows for either one of those systems to do or to dominate.

When you look at the Google, Google made itself into a figurehead of representing what a free enterprise approach could do. It's not state sponsored or nationalistic. It's corporate sponsored. So, it would be interesting to see who has the better technology, who has the better financial resources, and ultimately who has the organizational wherewithal to manifest their goals online that wins out in the marketplace.

If an organized effort is better at doing this than a corporate one, well then they might dominate. But so far, we've seen a very complex system that the marketplace -- with choice, and shedding light and transparency on activities -- ultimately allows for free enterprise predominance. They can do it better, faster, cheaper and that it will ultimately win.

I think, we're really on the cusp here of a new level of competition, but not between countries or even alliances, but really between systems. The free enterprise system versus the state-sponsored or the centralized or the controlled system. It should be very interesting.

I want to thank our guests for today’s discussion. Jim Kobielus, senior analyst at Forrester Research. Thanks, Jim.

Kobielus: Sure.

Gardner: Jason Bloomberg, managing partner at ZapThink. Great to have you.

Bloomberg: My pleasure.

Gardner: Jim Hietala, Vice President for Security at The Open Group. Thank you, Jim.

Hietala: Thank you, Dana.

Gardner: And thank you for joining us, Elinor Mills, senior writer at CNET.

Mills: My pleasure.

Gardner: Lastly, I appreciate your debut here today, Michael Dortch, Director of Research at Focus.

Dortch: It was great fun, and I hope I passed the audition.

Gardner: You did.

Gardner: I also want to thank our charter sponsor for supporting today’s BriefingsDirect, Analyst Insights Edition, that's Active Endpoints. This is Dana Gardner, principal analyst at Interarbor Solutions. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Charter Sponsor: Active Endpoints.

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at www.activevos.com/insight.

Edited transcript of a BriefingsDirect Analyst Insights Edition podcast, Volume 50, on what the fallout is likely to be after Google's threat to leave China in the wake of security breaches. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

You may also be interested in:

• BriefingsDirect analysts analysts debate the 'imminent death' of enterprise IT as cloud models ascend
  
  
• BriefingsDirect Analysts discuss solutions for bringing human interactions into business process workflows
  
  
• The Open Group's CEO Allen Brown on advancing the value of enterprise IT through architecture

The Open Group's Cloud Work Group Advances Understanding of Cloud-Use Benefits for Enterprises

Transcript of a BriefingsDirect podcast on The Open Group's efforts to help IT and businesses understand how to best exploit cloud computing.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group. Follow the conference on Twitter: #OGSEA.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.

Today, we present a sponsored podcast discussion on the ongoing activities of The Open Group’s Cloud Computing Work Group. We'll meet and talk to the new co-chairmen of the Cloud Work Group, learn about their roles and expectations, and get a first-hand account of the group’s 2010 plans.

We'll look at the evolution of cloud, how businesses are grappling with that, and how they can learn to best exploit cloud-computing benefits, while fully understanding and controlling the risks. The Open Group's Architecture Practitioners and Security Practitioners conferences are this week in Seattle.

In many ways, cloud computing marks an inflection point for many different elements of IT, and forms a convergence of other infrastructure categories that weren’t necessarily working in concert in the past. That makes cloud interesting, relevant, and potentially dramatic in its impact. What has been less clear is how businesses stand to benefit. What are the likely paybacks and how enterprises can prepare for the best outcomes?

We're here with an executive from The Open Group, as well as the new co-chairmen of the Cloud Work Group, to look at the business implications of cloud computing and how to get a better handle on the whole subject.

Please join me in welcoming David Lounsbury, Vice President for Collaboration Services at The Open Group. Welcome, David.

David Lounsbury: Thank you, Dana. Happy to be here.

Gardner: We're also here with Karl Kay, IT Architecture Executive with Bank of America, and one of the co-chairmen of The Open Group’s Cloud Work Group. Welcome to the show, Karl.

Karl Kay: Thank you, Dana.

Gardner: We're also here with Robert Orshaw, IBM Cloud Computing Executive, and also the co-chair of the Cloud Work Group. Welcome to the show, Robert.

Robert Orshaw: Hi, everyone. Thanks for inviting us.

Gardner: Let's start out with a look at cloud generally and take a state of the art on this one -- not necessarily the state of the art of technology, but of the adoption. Let's start with you, David Lounsbury. What's being done with cloud adoption and where are there some gaps in understanding or even expectation of paybacks?

Lounsbury: One of the things that everybody has seen in cloud is that there has been a lot of take up by small to medium businesses who benefit from the low capital expenditure and scalability of cloud computing, and also a lot by individuals who use software as a service (SaaS). We've all seen Google Docs and things like that. That’s fueled a lot of the discussion of cloud computing up to now, and it's a very healthy part of what's going on there.

But, as we get into larger enterprises, there's a whole different set of questions that have to be asked about return on investment (ROI) and how you merge things with the existing IT infrastructure. Is it going to meet the security needs and privacy needs and regulatory needs of my corporation? So, it's an expanded set of questions that might not be asked by a smaller set of companies. That's an area where The Open Group is trying to focus some of its activities.

Gardner: Robert Orshaw, congratulations on being named to the group as a co-chair. How do you think things are different now than what people expected a few years ago in terms of how cloud is rolling out and being adopted?

We're there

Orshaw: A few years ago, there was a tremendous amount of hype, and the dynamics, flexibility, and pricing structures weren’t there. It's an exciting time now that you're seeing that from a flexibility, dynamic, and pricing standpoint, we're there. That's both in the private cloud and the public cloud sector -- and we'll probably get into more detail about the offerings around that.

A tremendous amount has happened over the past few years to improve the market adoption and overall usability of both public and private clouds.

Gardner: Karl Kay, as an architect, what is it about cloud computing that appeals to you specifically, and what do you need to do in order to convince the business side of some of those benefits?

Kay: Certainly the leading items like cost savings and time to market are two of the big motivators that we look to for cloud. In a lot of cases, our businesses are driving IT to adopt cloud as opposed to the opposite. It's really a matter of how we blend in the cloud environment with all of our security and regulatory requirement and how we make it fit within the enterprise suite of platform offerings.

Gardner: David Lounsbury, that’s an interesting observation -- that it's the business side that wants to do this. What do you suppose is holding back the IT side? What do they need to put in place around security, ROI, or spending requirements?

Lounsbury: This is interesting, because I've actually wondered about, and welcome Karl’s view on, whether this is replicating the adoption curve we saw, way back when, in the PC days. People had enterprise IT suites and then said, "I could do the same thing on my laptop or on my personal computer" and it came in that way.

Of course, we have all had interactions with Google Docs -- or name your favorite cloud computing thing -- and have said, "How can I use that at work?" Of course, good business people think about, "There is this new capability out there. How do I turn it into a competitive advantage for my company?"

So, you bring that in, but there is a whole different scale that has to occur when you go into an enterprise, where you have got to think of all the users in the enterprise. What does it take to fund it? What does it take to secure it, protect the corporate assets and things like that, and integrate it, because you want services to be widely available?

The questions that those bring are: Are there new kinds of cost and ROI decisions that you need to make? Do we have the tools out there to say how to do an ROI analysis for a cloud service, in the same way we would be able to do an ROI analysis for investing in a new set of blade servers within our company? That’s one dimension.

The second questions that we have seen from our members is, "What are the security questions I should be asking? Are they different from the ones that I've used before?" Cloud, almost necessarily, particularly if you have got a hybrid or public cloud involvement, isn’t going to be subject to the same level of perimeter security and privacy controls that you've put on your IT infrastructure. So what are the right set of questions for that?

New interfaces

The third, of course, is architectural. Cloud brings new technologies and new interfaces to those technologies and new business processes to use them, provision them, and things like that. How do I knit those into my corporate IT governance infrastructure?

Those are the kinds of questions that are being asked by corporations, as they move up. Now, I'll ask Robert, because he's on the side that’s providing many of these, and we could verify whether he is seeing some of those similar questions from his perspective as well.

Orshaw: Yes. In fact, in a former life, I was CIO of a large industrial manufacturing company that had 49 separate business units.

Cloud today can be an issue in the beginning for CIOs. For example, at that large manufacturing company, in order for a business unit to provision new development test environments or production environments for implementing new applications and new systems, they would have to go through an approval process, which could take a significant amount of time.

Once approved, we would have centralized data centers and outsourced data centers. We would have to go through and see if there was existing capacity. If there wasn’t, we would then go ahead and procure that and install it. So, we're talking weeks, and perhaps even a few months, to provision and get a business unit up and running for their various projects.

These autonomous business units that weren’t very happy with that internal service to begin with, are now finding it very easy to go out with a credit card or a local purchase order to Amazon, IBM, and others and get these environments provisioned to them in minutes.

This is creating a headache for a lot of CIOs, where there is a proliferation of virtual cloud environments and platforms being used by their business units, and they don’t even know about it. They don’t have control over it. They don’t even know how much they're spending. So, the cloud group can have a significant effect on this, helping improve that environment.

Gardner: Let's learn a little bit more about the Cloud Group. David could I could ask you to briefly describe The Open Group, its heritage, and what its role is, for those listeners who might not be that familiar.

Lounsbury: The Open Group is a member-based consortium with the vision of boundaryless information flow, how do you get the right information, to the right people, at the right time?

And we also have a byline of making standards work, and that, for me, is in the DNA of The Open Group. We want to consider things, not just from a technical perspective, but also from how businesses are going to adopt the capabilities and technology that are delivered by open standards and emerging standards like cloud.

Number of activities

There are a number of activities inside The Open Group. Enterprise architecture is a very large one, but also real-time and embedded systems for control systems and things of that nature. We've got a very active security program, and also, of course, we've got some more emerging technologically focused areas like service oriented architecture (SOA) and cloud computing.

We have a global organization with a large number of industrial members. As you've seen, from our cloud group, we always try to make sure that this is a perspective that’s balanced between the supply side and the buy side. We're not just saying what a vendor thinks is the greatest new technology, but we also bring in the viewpoint of the consumers of the technology, like a CIO, or as Karl represents on the Cloud Group, an architect on the design side. We make sure that we're balancing the interests.

Gardner: So, as you cross the chasms between these different constituencies and groups, it seems that with cloud we're now, in a sense, crossing the chasm between the expectations and requirements on the business side, and what IT need to now bring to the table in terms of making cloud computing safe or reliable for what they consider to be mission critical or enterprise ready.

Could any of you give me a quick history of how the Cloud Work Group came about and perhaps an encapsulation of its mission and goals.

Lounsbury: As I mentioned, The Open Group is a member-led consortium. Our members, over the past year or so, have been growing in interest in cloud. We did a number of presentations reaching back to our Seattle conference about a year ago on cloud computing. We've reached out to other organizations to work with them to see if there is interest in working together on cloud activities. We've staged a series of presentations.

From October 2009 onwards, we've gotten about 500 participants virtually, and that represents about 85-90 companies participating.

The members decided in mid-2009 to form a work group around cloud computing. The work group is a way that we can bring together all aspects of what's going on in The Open Group, because cloud computing touches a lot of areas: security, architecture, technology, and all those things. Also, as part of that we've reached out to other communities to open a nonmember aspect of the Cloud Work Group as well.

The work group was formed in 2009 and, towards the end, we went through the necessary formation steps, setting up the governance, and as you have seen, electing the chair. From October 2009 onwards, we've gotten about 500 participants virtually, and that represents about 85-90 companies participating.

They went through a fast exercise to organize themselves into groups, and that’s happened. We've now got four of these approved -- four activities within the Cloud Work Group on the business artifacts. We've got business use cases work group. We've got our SOA and service oriented infrastructure (SOI) architecture merger work group -- I know that’s not quite the right name -- and also a group that's starting to look at security in the cloud.

Gardner: Karl Kay, what are your expectations? What are your hopes for what can be accomplished in the near term with the work group?

Kay: All the work groups are really focused on trying to deliver some short-term value and get the items out. In the business use cases, they're really trying to define a clear set of business cases and financial models to make it easier to understand how to evaluate cloud with certain scenarios. How do you determine whether it makes sense to build a consistency across that? They're working not only within their own group, but also working with groups like the Google Use Case Group and some of the other use case groups that are out there.

The cloud architecture group is looking to deliver a reference architecture in 2010. One of the things we've discovered is that there are a lot of similarities between the reference architecture that we believe we need for cloud and what already has been built in the SOA reference architectures. I think we'll see a lot of alignment there. There are probably some other elements that will be added, but there's a lot of synergy between the work that’s already going on in SOA and SOI and the work that we are doing in cloud.

Gardner: Robert, do you have any further comments on your expectations and where you think the group can go in the next year or two?

Interrelated groups

Orshaw: I'm excited about the way we've formatted this, because all of the groups are interrelated. We have a steering committee that brings these groups together to define the parallel points and the collision points between them.

For example, on all of these, we're starting with a business use case. Why, from a business perspective, would you use public? Why would you use private? What are the business benefits around that? And then, what are the reference architectures to achieve that? What are the security models necessary to achieve that? What's the SOA model associated with all of that?

At the end of this, we'll have a complete model for both public and private cloud. It's an exciting endeavor by the team, and I'm excited to see the outcome. We'll have short-term milestones, where we'll produce, document, and publish results every two months or so. We hope, towards the end of the year, to have all of these wrapped up into these global models that I described.

Gardner: How about the skill sets? As I've been listening to you describe some of the challenges, it strikes me that perhaps we are talking about different skill sets. Or, perhaps we're looking at skill sets we apply to architecture or other frameworks and can now apply to cloud. Is there a distinct cloud skill set, or are we really continuing on some sort of a maturation of the role of architect and IT leadership?

Orshaw: We have a great example of that in the work group and even with the co-chairs. I come from a business background. I ran an application service provider business. I ran IBM’s hosting and applications management business, and I'm a cloud business executive. Karl is a leader on the cloud architecture side, the more technical side. So, as co-chairs, we bring both sides to it. Then, throughout the subcommittees, we have varying skill sets that make up these committees.

One of the things you have to think about is the body of knowledge that you need to have available to you in order to make effective business use of this.

On the business use cases, we have people both on the business side and the technical side, and that's scattered throughout the rest of the teams as well. It's a very nice balance. Karl, do you want to add few comments to that?

Kay: We're seeing a skill-set change on the technical side, in that, if you look at the adoption of cloud, you shift from being able to directly control your environments and make changes from a technical perspective, to working with a contractual service level agreement (SLA) type of model. So it's definitely a change for a lot of the engineers and architects working on the technical side of the cloud.

Gardner: Do you have anything further David on what's needed in the field in terms of skills, certification, or some advancement or changes?

Lounsbury: So many technological innovations start out as a bit of a "wild west." One of the things you have to think about is the body of knowledge that you need to have available to you in order to make effective business use of this. That’s why you see the emphasis on some of the artifacts that are being produced by the cloud group. We've got the business use-case template and financial templates under production, adoption strategy work, and some metadata to help you analyze and categorize stuff.

We're starting to build up that body of knowledge and separate the wheat from the chaff in terms of real business value and hype. That’s necessary. But, then you're also going to face the issue of how to determine the people who have that body of knowledge. That’s something for downstream, but it's something that every business person must be thinking about. I'm sure that every consultant out there just added "cloud computing expert" to their resume. How do you know who those people are?

But, that’s a thing for the future. Right now, we have to focus on getting that body of knowledge in place for business people to use and assess what's going on in cloud computing.

Gardner: I know it’s a bit early, but do we have any examples of enterprises that have already dabbled in cloud computing, experimented, and then adopted it at a certain level? Do we have any metrics of success or paybacks that we can take away from that as an indicator or bellwether of where others might be heading?

Wireless network example

Orshaw: We have almost 200 examples here, but I'll highlight one. SK Telecom, Korea’s largest wireless provider, has created a public cloud for their partners, where the partners can develop and then put into production WAP services for their wireless devices on that wireless network. It's a completely a public cloud that offers both a development platform and a SaaS model to the WAP devices and to their customers. That’s a terrific, terrific model.

There are examples of several large banks now signing up for the SaaS model of email and collaboration. Several very large corporations in the Fortune 100 are starting to use cloud for non-production environments of all types. As opposed to purchasing hardware and building it on their own data centers in the old traditional way, they're signing alliances with various cloud providers for non-production development platforms.

Gardner: Karl, do you have any favorite examples that perhaps illustrate in your mind the potential for cloud computing?

Kay: That would be the development environment that Robert mentioned. Among most of our peers in the Fortune 100, almost everybody has some development project out there, and they're seeing pretty quick return on investment in terms of time to market, getting things up and running, flexibility, and not expending capital on short-term hardware. That’s a pretty powerful use case where it's easy to demonstrate value.

Lounsbury: Dana, if I could add one, the one thing we don’t want to ignore here is that the ability of cloud computing to enable new lines of business on a scale that might not have been feasible if you had to have your own dedicated infrastructure.

There are lots of examples where that global scale delivery of more sophisticated service has really been enabled by the fact that there are computing resources and globally reachable infrastructure out there.

There was a great example from our Hong Kong conference -- which is available on The Open Group’s website, www.opengroup.org -- of a security company that put up web-enabled security cameras, very low cost items. They put them in a premises that somebody wanted to monitor. Then, they put the imagery from the security cameras up in the cloud. In the cloud, they could do analysis on motion, sound, and things like that to assess whether there was an intrusion or not.

It could be done at a much more sophisticated level than it could be in any single small security device. Of course, the cloud also made it much easier for them to make it available to anybody around the world who was allowed to monitor that premise.

There are lots of examples where that global scale delivery of more sophisticated service has really been enabled by the fact that there are computing resources and globally reachable infrastructure out there.

That’s going to be an area that you will see increasingly taken advantage of by enterprises, not so much for managing ROI or capital expenditure, but also just having the technology available to put these new business models and new business capabilities out on a global basis.

Gardner: That’s an interesting point, David. Perhaps many people approach this from an idea of efficiency, of repaving cow paths a little bit better, cutting costs, and maybe reducing IT by outsourcing certain aspects of it. But, you were also talking about being able to do things that couldn’t have been done before.

There is an extended process and innovation capacity here. Experimenting and getting ready will now put you in a position where you can take advantage of some of these new business models and do things that, as you say, couldn’t have been done before. Do you have any thoughts along those lines, some of the future implications of cloud computing?

Ability to scale

Lounsbury: Certainly, cloud brings the ability to scale, and scale quickly, that we haven’t had, at least not at a cost-effective level. There are a lot of opportunities to tackle problem sets that we wouldn't even tackle before, because it was cost-prohibitive. Now, with cloud, there's an opportunity to take on those problems, use those resources, and then release those resources back into the pool.

Orshaw: That’s a good point, because the fact that you've got that scalability without capital expenditure really lowers the risk of trying out a new innovative business model.

Lounsbury: Google is a perfect example. Their whole technology model doesn’t work without massive scale. There are problems other businesses have to which they can apply the same economies of scale in that same size. We can tackle those problems.

Gardner: So it's an opportunity to really reduce the risk from financial exposure, when you can try out new business models, but without necessarily having to build out the underlying infrastructure to do so.

Lounsbury: Right.

Gardner: David Lounsbury, do you have any other thoughts about relaying what’s going to be happening at The Open Group’s conference in Seattle in February, in terms of the work group, and perhaps let people know how they might learn more or even get involved?

Google is a perfect example. Their whole technology model doesn’t work without massive scale.

Lounsbury: The best thing to do is go to www.opengroup.org and you can see the Seattle conference prominently featured. We've got some great presenters there. We've got Peter Coffee from Salesforce.com and Tim Brown from CA. We've got an interesting a formal debate on, "Is the cloud more or less secure than enterprise IT," between Peter Coffee and the CISO of the University of Washington. We've got some technical discussions on cloud taxonomies from Hewlett-Packard and Fujitsu. So it’s going to be a really exciting conference.

We also have a "Cloud Camp" in the evening, so that people can come and discuss their cloud directions and needs in a more unstructured way. That is open to members and non-members. So, I just invite everybody in the area to make sure that they check out the site and sign up for it.

We have a public list for our Cloud Work Group. If you want to see what’s going on in the Cloud Group, we have got, what I call, our "cloudster's list," and you can sign up to from that site.

Gardner: Very good. I want to thank you very much for participating. We've been talking about the ongoing activity of The Open Group’s Cloud Work Group. Joining us has been David Lounsbury, Vice President of Collaboration Services at The Open Group. Thank you very much, David.

Lounsbury: You're welcome. Thank you for the invitation.

Gardner: We've also been joined by Karl Kay, IT Architecture Executive at the Bank of America, and one of the new co-chairs of the work group. Thank you, Karl.

Kay: Thank you for the opportunity.

Gardner: And also, Robert Orshaw, IBM Cloud Computing Executive and the other co-chair of the work group. I appreciate your input, Robert.

Orshaw: Yes, indeed. Thank you very much.

Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group. Follow the conference on Twitter: #OGSEA.

Transcript of a BriefingsDirect podcast on The Open Group's efforts to help IT and businesses understand how to best exploit cloud computing. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

You may also be interested in:

• Making the leap from virtualization to cloud computing: A roadmap and guide
  
  
• Proper cloud adoption requires a governance support spectrum of technology, services, best practices
  
  
• TOGAF 9 advances IT maturity while offering more paths to architecture-level IT improvement