Let’s roll back the clock to September 2008, to an analyst meeting where Oracle founder and CEO Larry Ellison was asked a question about his view on cloud computing.  According to the Wall Street Journal, his response was: “Maybe I’m an idiot, but I have no idea what anyone is talking about.  What is it? It’s complete gibberish.”

Oracle founder and CEO Larry Ellison

Three years later, Oracle is using its 2011 OpenWorld conference to dispel lingering questions about its ever evolving cloud computing strategy.  During the event, an Oracle executive detailed his company’s plans to deliver not only software-as-a-service (SaaS), but also platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) capabilities in the coming years.

Mr. Ellison isn’t the only corporate executive whose perceptions about cloud computing models have changed over time.  Many decision makers’ views on cloud computing have shifted considerably over the years from the their initial reaction of the cloud being all hype and spin created to separate IT departments from large portions of their tight budget allocations.  Now this initial resistance has waned the world over as more and more companies push data and applications into the cloud. While adoption will continue to increase, there will always be organizations that, for their own reasons, will be slow to embrace this evolving computing model due to concerns ranging from security issues to immaturity of the cloud industry.

But as computing grows more complex, many companies are finding it no longer makes economic sense to own and manage every aspect of the infrastructure they use – from server farms and storage to databases and applications. And let’s not forget all the expert resources required to maintain these infrastructures. This is especially apparent with the explosion of small and internet based companies that are leveraging services like Amazon EC2 because of its flexibility and the reduced overhead expense of an internal data center to support their services.

The evolution of the cloud is evident to anyone that follows the IT industry; the cloud is heartily being embraced as a business enabler. We now see the economic benefits of the various cloud computing models that are, in part, attributed to economies of scale.  It’s estimated that large data centers can purchase power, bandwidth and hardware at greatly reduced rates compared to what medium-sized organizations would pay for the same infrastructure. Cost is one of the major factors that started the unmistakable trend away from private data centers to the cloud.

A few of the important benefits that organizations of all sizes derive from cloud computing are capital cost savings, rapid provisioning of services, elasticity (capacity on demand), and the ability to realign their IT staff to mission critical activities.

Benefits aside, decision makers still have concerns about how secure their data is in the cloud.  These concerns fall under the broad categorizations of “Lack of …” as in, lack of control and visibility; lack of the ability to specify where data resides and how it is protected; and lack of understanding the security over the processing environment and data.  These concerns can’t really be addressed without examining the specific aspects of the types of cloud computing and looking at them in context.

In my next post we will continue with examining SaaS, IaaS, PaaS, Community Clouds, and critical attributes to look for in a cloud service provider.

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