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Envisioning the Cloud:The Next Computing Paradigm and itsImplications for Technology Policy

© 2008 Marketspace® LLC, A Monitor Group Company — CONFIDENTIAL — NOT FOR DISTRIBUTION© 2009 marketspace® LLC, a monitor group company – CONFIDENTIAL: NOT FOR DISTRIBUTION

Google DC TalksThe Newseum555 Pennsylvania AvenueWashington, DC

Jeffrey F. Rayport & Andrew HeywardMarketspace LLCA Monitor Group CompanyMarch 20, 2009

Overview

Understanding the Cloud

Benefits of the Cloud

Enabling the Cloud

© 2009 Marketspace® LLC, A Monitor Group Company — CONFIDENTIAL — NOT FOR DISTRIBUTION 2www.marketspaceglobal.com

Every dozen or so years, a revolution changes the way we usecomputers. Huge mainframes in the 1960s, minicomputers in the1970s, personal computers in the 1980s, cell phones and smartphonesin the last decade, and now the emergence of cloud computing.

Government and the Cloud

Concluding Thoughts

Seeding the Cloud

Storage Connection SpeedProcessing Power


Mark Kryder Andy GroveGordon E. Moore

Defining the Cloud

Cloud computing represents a new way to deploy computing technology to give usersthe ability to access, work on, share, and store information using the Internet. The clouditself is a network of data centers – each composed of many thousands of computersworking together – that can perform the functions of software on a personal or businesscomputer by providing users access to powerful applications, platforms, and servicesdelivered over the Internet.

Social Networks Photo Sharing

Online Music


Smartphones

Online Video

Web-mail

Layers of the Cloud



Founded in 1999 declaring the “end of software”

Offered cloud-based version of CRM software

Became first cloud-based service to generate $1 billion in sales

AnytimeAnywhere

Access


Sells “on demand” contract and proposal management systems

Built a prototype in a “couple of weekends” using Salesforce’sForce.com platform – company profitable within nine months

Focused on customer needs, not development or infrastructure

Specialization &Customization


Collaboration Held InnovationJam in 2006; world’s largest online brainstorm,designed to share IBM’s advanced research and technologies

Included over 150,000 participants from 104 countries

From concepts developed during sessions, IBM launched 10 newbusinesses with investments totaling $100 million


Storage asUniversalService Digitized 150 years of archives, which comprised 11 million articles

representing 1.5 terabytes of memory

Utilized Amazon’s Simple Storage Service (S3) to digitize completearchival content page by page in under 36 hours


ProcessingPower on

Demand

Provides web-based software for creating presentations usingphotos and music uploaded to the web

Increased traffic to 750,000 from 5,000 a day after a successfulFacebook marketing campaign

Added capacity on Amazon Web Services infrastructure at a cost of10 cents per server hour plus related expenses


Cost Savings

10 cents per server hour plus related expenses

Utilized Google Apps to provide Office-type productivity softwarefor its workforce of over 16,000 people

Achieved estimated savings of $80 million by not building its owndata center or hiring more engineers to manage it

Enabling the Cloud

Open AccessUniversal Connectivity

“The point is that no one shouldbe denied access to [onlineresources] because of who theyare…. So this is a fairness issuemore than anything else.”

“There will be 499 million in-homeconsumer broadband connectionsworldwide by 2012 – anextraordinary number, but itrepresents only 25% of the


In 2007, the United States ranked15th in theworld in broadband penetration and 13th inoverall Internet connectivity

If the United States falls short in universalaccess, cloud benefits will fall short, too

more than anything else.”

- Vint Cerf, Chief InternetEvangelist, Google

This raises complex issues that emerged inthe debate over “net neutrality,” andpowerful commercial interests are at stake

Any barriers that restrict access to theInternet limit the potential of the cloud

represents only 25% of theworld’s households.”

- Gartner Group

Enabling the Cloud

Interoperability and User ChoiceReliability

“It is not just about being ‘alwayson’; it is this idea of reliability. Ifthis is reliable, that’s a big thing. Ifit isn’t, then what do we turn to?”

“If a customer doesn’t like ourservice, they can cancel.”

- Polly Sumner, President,


Even best-known providers of cloudservices fail from time to time – stiffeningresistance of IT departments

Service that comes close to 100 percentreliability is a prerequisite for widespreadadoption of cloud computing

it isn’t, then what do we turn to?”

- Kevin Kelly, Founder, ExecutiveEditor, Wired Magazine

- Polly Sumner, President,Platform, Alliances, and Services,Salesforce.com

As of now the major players operateproprietary cloud infrastructures, withvarying degrees of open standards

If large providers move to dominate withproprietary clouds, it will be difficult torealize the full potential of cloud computing

Enabling the Cloud

PrivacySecurity

“The best medicine isaccountability and transparency.”

- Dan Burton, Senior Vice

“If we give this data to a cloudcomputing company, and there isa security breach or if thatcompany gets sold, how do weaddress that? I am accountable.”


In the United States, the law treats personalinformation differently once it’s handedover to a third party

Cloud providers must protect user datafrom unauthorized government access andensure integrity of commercial use

- Dan Burton, Senior VicePresident of Global PublicPolicy, Salesforce.com

Notion of making a third party responsiblefor keeping data safe continues to provokedebates in corporate IT departments

Cloud providers must demonstrate thatdata is safer than in current systems

- Carolyn Lawson, ChiefInformation Officer, CaliforniaPublic Utilities Commission

Enabling the Cloud

SustainabilityEconomic Value

“The classic challenge ofaddressing a new market is to doit at a lower cost, make thingsavailable where they could notpreviously be delivered, orremove complexity. The cloud

In 2006, data centers consumed1.5% of all electricity used in theUnited States.


The cloud is creating new businessopportunities and new markets by offeringhigh-end computing at lower cost

The real test will be for the cloud to reducecosts, increase productivity, and enablefaster innovation at the enterprise level

remove complexity. The cloudcan address all three of those.”

- Russ Daniels, VP and CTO ofCloud Services Strategy, HP

EPA estimates that by 2011, consolidatingcomputing into data centers could reducecarbon dioxide emissions by 47M metric tons

As enterprises come under increasingpressure to go “green,” sustainability iscritical to the viability of cloud computing

- Environmental ProtectionAgency

Government and the Cloud

Who Decides?

MarketPolicy

Universal Connectivity

Institutional Adoption

Cybercrime Enforcement


Privacy

Sustainability

Security

Reliability

Interoperability

Economic Value

Cloud Ecosystem

Device ManufacturersISPsMedia CompaniesData Centers


Living with the Cloud

Netbooks

Electronic Readers

Set-top Boxes

Music PlayersMedical Devices

Retail Touchpoints


Electronic Readers

Consumer Appliances

Video GameSystems

Transportation Vehicles

Home Automation

The cloud is a reality for consumers and will become the“new normal” in corporations and organizations

The cloud is one avenue for the United States to re-asserteconomic and technology leadership on a global stage


economic and technology leadership on a global stage

What government can do best is clear the road forthe cloud’s expansion, not pave it

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