Cutting through the hype over cloud-based services

The last few years have seen the telecom sector enchanted and stoked by sexy new opportunities emerging from the IT side of the aisle. In 2007 it was Web 2.0. In 2008, it was Apple's App Store. For 2009, it's got to be the cloud.

From every tech blog you can name to the cover of the Economist, cloud computing and cloud-based services (also called software as a service, or SaaS) have caught the eye of enterprises and analysts. The basic premise - run and store your applications and content on network servers rather than your end-device, and utilize extra processing power off the network while you're at it - on paper sounds win-win for everyone. Enterprises benefit from outsourcing the cost and complexity of IT networking, and save a bundle on software licensing fees. In particular, start-ups that need to get their internal IT system up and running quickly can do so for a monthly fee. Consumers get the benefit of better organizational tools (think photo-hosting services like Flickr) and automatic backup of files that can be accessed from any device. Put another way, storing your stuff in the cloud means you don't lose it forever if your laptop explodes.

On the downside, trusting your data to the cloud isn't without risk. Some of them - such as privacy implications (like Facebook's controversial marketing program that allowed advertisers to mine user info for targeted ads) and technological lock-in (where changing service providers could mean leaving your data behind) - have yet to be fully addressed.

Then there's the recent debacle with T-Mobile's Sidekick service amply illustrated. Most of the cloud-stored data on outsourced servers run by Danger (a subsidiary of Microsoft) disappeared instantly, and even though T-Mobile and Microsoft were able to recover the majority of the data, some of it was lost forever. Either way, it's the former headline that everyone will remember when service providers come forward to pitch similar offerings.

And that's just one challenge of many that operators face as they set their sights on the cloud.

Everything old is new again

For a start, there's some confusion over just what counts as a cloud-based service.

Ironically, part of the buzz over the cloud stems from the realization that much of what counts as SaaS - as well as similar cloudy acronyms for platforms (PaaS) and infrastructure (IaaS) - has actually been around for some time (as far back as the pre-PC days of timesharing and VAX terminals, if one wants to be technical). Webmail is the obvious example, but also Flickr, YouTube and most social networking sites, as well as newer manifestations like Google Apps and Amazon's cloud services.

In fact, in many cases, cloud-based services are old ideas with new acronyms, says Miguel Carrero director of the service delivery infrastructure and applications domain for the Communications and Media Solutions business unit of HP.

"When you break through the nomenclatures, these are elements that have been coming into fruition slowly but surely over the last five to ten years," Carrero says. "If you remember the concept of ASPs [application service providers] in the late 90s, the underlying technologies and elements for cloud computing are different now but the basic concept is similar."