OECD Conference Centre
14 October 2009
In 2008 the term “cloud computing” became fashionable as a way to refer to a number of interlinked information technology trends. There are a number of competing interpretations of what cloud computing is about, but in its simplest formulation the expression refers to the provision of computing resources at a distance, over the Internet. This would hardly seem to be a novel concept, and indeed it harkens back in some respects to the early days of computing with big mainframes doing the computing work for remote users at work stations. Yet the term is suggestive of important shifts in IT, which may bring economic, policy and possibly regulatory implications.
The metaphor of the cloud is intended to suggest the storage and processing of data and delivery of services from large amorphous complexes via the Internet. One aspect of the metaphor is some notion of geographic indeterminacy – customers may not know where their data is at any given moment, accessing computing resources drawn from an “ill-defined elsewhere.” This is not true for all enterprise cloud applications, however, some of which are supported from a small number of readily identifiable data centres. What is common, however, is the idea that the service can be delivered without regard to the location of the customer. Armed with a web browser on an Internet connection, the cloud enables users to access the services from anywhere.
Cloud computing platforms take advantage of a number of broader IT trends. One key element is advances in virtualisation, which allow for the separation of applications from infrastructure. Likewise cloud applications are dependent on the widespread availability of broadband connectivity, including through wireless devices, as well as reductions in storage costs. Some cloud-based service providers find efficiencies through the use of a multi-tenant architecture, to allow different customers to share the same platform. Some of these trends were previewed in earlier discussions of “grid computing” or “utility computing,” through which businesses rent storage space and access to other businesses computing facilities.
Services being marketed as cloud computing may include software “on demand.” While some cloud services operate on a subscription model, “pay as you go” models are increasingly becoming available, allowing organisations to pay for only what they consume, and allowing them to flexibly increase that consumption as needed. Some interesting examples of cloud services involve platforms that allow interactivity, through data exchange between applications – “mash-ups” – and enhance innovation.
There are a number of benefits promised by cloud-based services. For example, the computing resources can be made available anywhere there is a computer and Internet connection, minimising the impact of geography on productivity. And access devices can be simpler (and smaller) if the data and applications reside in the cloud. For both small businesses and large enterprises, cloud services can free up organisations from capital expenditures on their computing infrastructure and minimise the need for in-house IT expertise. “Pay as you go” models can be very attractive to organisations whose computing needs are uneven, or whose storage or processing needs may rise quickly. In general, the pressure on firms to cut costs, enhance flexibility and reduce risk in the current economic climate may make cloud-computing and its pay-as-you-go pricing models attractive.
Some organisations may choose to implement internal cloud-like architectures or “private clouds.” Others may choose a hybrid approach, moving some processes to the public cloud, but continuing to maintain their own data centres, servers, storage, and networks for certain essential operations. Public sector organisations may have particular requirements that need to be addressed by cloud providers.
Cloud-based services for consumers have been around for many years in the form of applications like webmail. But the arrival of “Web 2.0” services with greatly enhanced user interfaces, along with reduced storage and processing costs has vastly expanded services on offer. Consumers now use the Internet to migrate e-mail, pictures, videos, and documents, financial records, and health records away from their personal computer to third-party servers. Popular services like social networks have been cloud-based since their inception. According to a recent study, some 69% of online Americans use webmail services, store data online, or use software programs such as word processing applications whose functionality is located on the web.
Cloud computing also raises a number of policy issues, from portability, competition, and innovation to security, privacy and accountability. Both the promise of cloud computing and the policy issues it raises are the subject of this ICCP Foresight Forum.
For more information, please contact: michael.donohue[at]oecd.org
Chair: Richard Simpson, Chair of the ICCP Committee
The morning session focused on the various dimensions of cloud computing. The first panel took a broad look at the key concepts, basic architectures and technologies, and business models currently referred to as cloud computing, with some consideration of the technological developments on which they rely. The second panel took a more in-depth look at the specific types of services on offer, along with the particular benefits they can bring to organisations and individuals.
Panel 1 - Key concepts, technologies and business models
Cloud computing builds on a number of IT trends, beginning with the ready-availability of broadband and inexpensive storage, but also including virtualisation, grid computing, and multitenant architectures. Although a variety of definitions are offered for cloud computing, commonly identified characteristics include scalability on demand, the ability to pool computing resources, and payment models oriented around usage based costing.
Many of the best-know services are classified as “public cloud” because they are deployed via the public Internet and share computing resources, but some consider cloud services to include “private cloud” operations with data and enterprise applications running on secure off-site data centres. There are also hybrid models that may leverage both private and public cloud services.
Panel 2 – Cloud Services: infrastructure, platform and software
An increasing number of IT vendors are offering some form of cloud services. These are often grouped into three categories:
The afternoon session focused on the challenges to maximising the potential benefits of the cloud computing for the Internet Economy. It considered the challenges to ushering in the increased innovation, competition, and productivity and avoiding user lock-in. It also considered the elements of an appropriate policy and regulatory environment, one suited to address the security, privacy and other governance challenges.
Panel 3 – Portability, competition and innovation
Cloud computing promises a powerful new platform for innovation. It allows entrepreneurs to develop, deploy, market, and sell cloud applications worldwide without having to invest in expensive IT computing infrastructure. It also gives smaller businesses access to the same industrial strength computing systems as large multinational corporations, fostering the competitiveness of small and medium-sized business.
By allowing government and business in developing countries to access sophisticated computing platforms without having to buy a lot of hardware and software or manage complex IT deployments, cloud computing can help jump-start economic development. All that is required to access cloud computing solutions is a browser with broadband access.
Luis Magalhães, Ministry of Science, Technology and Higher Education, Portugal
Panel 4 – Security, privacy, and accountability
Security is one of the most important issues for cloud computing. Organisations may be concerned that transmitting, retrieving, and storing their data in the cloud will not be secure. They may be particularly reluctant to move critical or sensitive information “outside the firewall,” and into the control of a third party.
Others, however, may find that security can be enhanced by the centralised controls that cloud computing vendors can provide. This may be particularly the case for individuals and small organisations, which may be better off entrusting their data to professionals. For individuals using cloud services and organisations dealing with employee or other personal data, privacy issues arise. A certain loss of control seems inevitable as greater quantities of personal information are stored remotely by third parties.
Keith Besgrove, Dept. of Broadband, Communications and the Digital Economy, Australia
Chair and Moderators
Closing Remarks: Richard Simpson, Chair of the ICCP Committee