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Computerworld - LAS VEGAS - University of Kentucky CIO Vince Kellen is considering moving some of the university's SAP work to a cloud environment, which would make him a relatively early adopter of ERP in the cloud.

Kellen didn't have to go into too much detail about his motivations for trying a cloud service when he spoke at the VMworld annual conference here. Like most publicly supported institutions and governments, cutting costs has become paramount.

"I have got to find sources of funds to keep our infrastructure going," Kellen said. "I got to look at a disruptive technology like cloud to do that."

Kellen is what amounts to a pre-beta tester of Dell's newly announced infrastructure as a service cloud. Dell's official beta testing period isn't expected until next month.

Kentucky runs SAP and has been operating a Unix system environment. Part of this change also involves migrating off the Unix system and the database it is running on (Kellen didn't want to identify the vendor he is moving off on) to Microsoft SQL and x86 hardware, he said in an interview.

Earlier this year, Microsoft and SAP said they have started to work together to ease cloud deployments .

The plan is to run about 60% of the ERP systems at the university, which has 250 IT employees, in the cloud. That will include testing and development and peak processing, particularly around class registration periods, he said. "It's very feasible," said Kellen, who has been double checking his business case.

Security is another issue but Kellen seems confident it won't be a barrier. "Chances of a vendor running a large complex data center with tons of other customers and having good security practices better than your own, is probably high - especially if you are small shop like we are," he said.

University officials have been supporting the ERP in the cloud idea but also said it can't result if any service changes or latency, Kellen said. "If it's not invisible to [campus users], we're not doing this," he said.

Kellen estimates saving of $1.5 million over three years, which also includes freeing up some of IT staff to work on other projects.

Dell's new infrastructure as a service cloud was just announced this week and according to Mark Bilger, vice president and CTO of Dell Services said the Dell cloud will go into general availability sometime in the fourth quarter in North America. The cloud is being developed in partnership with VMware.

The first deployment of the cloud will be in its Plano Technology Center, a facility it acquired with its Perot acquisition. But Dell is also building a cloud computing data center in Quincy, Washington, because of its low power cost, Bilger said.

Kentucky uses SAP which Kellen said has been architected to work with cloud.

Jean Bozman, an analyst at IDC, said SAP has been engaging with a number of cloud providers over the last two years as part of its overall virtualization efforts. "People are doing it," said Bozman, but "as far as heavy demanding workloads, we're still in the first wave of adoption."

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at  @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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