IT shops rally around private clouds

Going forward, a hybrid public-private approach will likely win

Private clouds -- where companies use their own infrastructure and provision virtualized services to end users via automated tools -- are gaining traction among IT leaders who want to deliver advanced services at lower cost.

However, as with any new approach to computing, private clouds today fall short on manageability, and some users worry about the risk of vendor lock-in, particularly with virtualization and other tools that make cloud computing possible. Further, the fuzzy nature of just what private cloud computing means could slow the adoption of internal cloud setups. (See sidebar, below.)

That lack of definition doesn't bother Geir Ramleth, CIO at San Francisco-based Bechtel Corp. In fact, he says, the lack of a precise definition is a good thing, because looking at the private cloud too narrowly would "limit what it can do for us," he says. "You're talking philosophy here." Bechtel is one of the world's largest engineering and construction firms.

Alan Boehme, senior vice president and head of IT strategy at ING Financial Services in San Francisco, adds that a private cloud differs from old ways of thinking about systems architecture. "It's not just servers, storage or networks; it's every component," he argues.

Meanwhile, Bob Zukis, an IT strategy and operations consultant at PricewaterhouseCoopers LLP in New York, says, "the private cloud is less about technology than it is a rallying cry for IT."

That rallying cry is evolving into a real market. According to Gartner Inc., enterprise spending on public and private cloud infrastructure services will total $3.2 billion this year, up 28% from $2.5 billion in 2008. Spending in the public sphere accounts for the vast majority of those dollars. However, the market researcher expects that by 2012 IT shops will spend more than half of their cloud dollars on private cloud services because of improvements in cost and management efficiency.

Saving time and money

Ramleth has heard the cloud computing rallying cry and has seen dramatic results from Bechtel's private cloud platform, a standards-based setup that features virtualization technology and automated provisioning. In 2005, more than 2,000 IT employees staffed approximately 20 data centers, where server utilization reached 2% to 3%. Today, a much leaner Bechtel IT department, numbering 1,100 employees, operates just three data centers, where server utilization averages 60% to 70%.

At Bechtel, 44,000 employees across the globe have access to 230 applications. The IT department has already shifted about 60% of those applications into the company's private cloud. The rest will be moved to the cloud by the beginning of 2010, says Ramleth.

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