KEY POINTS:
Clouds are forming over the ICT landscape, but these have nothing to do with a downturn in the industry. Rather, cloud computing - or the delivery of ICT products and services over the internet - is the way of the future.
If anything, the trend will shower more revenue on the industry as this new method of accessing computing power enlarges the overall market. And if ICT analyst IDC is right, no breeze is about to get up and blow the cloud away - this will be the prevailing form of ICT service delivery for a couple of decades.
"This is about the IT industry's new model for the next 20 years," says IDC's Vernon Turner, the firm's Boston-based head of enterprise infrastructure, consumer and telecoms research.
Many of the industry's hardware, software and services heavyweights are readying cloud computing offerings and, last month, one of them, Google, announced a deal with the University of Auckland to provide access to applications via the internet to 50,000 students, staff and alumni.
Google is the youngest of the companies Turner names as cloud computing front-runners, but is generally said to be making the running.
Whether that's actually so isn't yet known. IDC is just getting down to the nitty-gritty of measuring the market, and Google won't say what proportion of its revenue comes from cloud computing.
However, the Goliath of internet search claims to have 500,000 business customers worldwide for its internet-delivered Google Apps, and says it is signing new ones at a rate of 3000 a day.
As well as the University of Auckland, Waikato University is also a customer, along with Macquarie University in Australia, and the state of New South Wales, which has done a deal for Google to provide 1.2 million Gmail addresses to school kids. They are among thousands of education customers the company says it has.
Education customers pay nothing for rights to Google Apps Education Edition, which includes email, Google Docs (word processing, spreadsheet and presentation software), a shared calendar, instant messaging, website creation software and the ability to create a customised web home page on the institution's domain.
Commercial customers are charged US$50 ($71) per user, per year.
Initially, says University of Auckland electronic campus manager Matt Cocker, Auckland will be making use of the email, calendar and chat applications, with each user having 7GB of mail storage space.
That should mean an improved service for users, while the university IT department is freed up to focus on supporting the institution's teaching and research activities. Cost savings should follow.
"Eventually they should, by removing the development and hardware overheads that maintaining a high-quality mail and collaboration space require," Cocker says.
Richard Suhr, Google's Wellington-based head of enterprise business for New Zealand, Australia and Southeast Asia, is bolder in his cost claims.
"By moving to a software as a service model you're fundamentally changing the cost model. It's all about driving out the utility cost of computing and being able to take that and spend it somewhere else."
Users, meanwhile, can expect "richer and more collaborative services".
IDC's Turner goes along with that.
"The main benefits for user organisations, on the business side, include lower up-front costs, simpler and faster adoption requiring no or less on-premise IT skills and better utilisation through usage-based pricing." It should lead to more effective use of ICT by small to medium-size businesses, while also being attractive to large companies, Turner says.
But there's a caveat. Accessing applications online demands fast, reliable internet access, something of a scarce commodity in New Zealand. The university's Cocker doesn't think it will be an issue, saying usability is expected to improve, not the other way around.
Turner, though, is of the view that provision of cloud computing services in New Zealand would require the service provider to have a data centre in this country. Suhr says Google doesn't disclose where it hosts data for individual customers, nor where its data centres are located.
"In general what we do is host these services across global infrastructure ... for redundancy and availability and ensuring continuity of service."
He concedes that New Zealand's broadband offerings are a limitation for cloud computing. "I live in Wellington and am New Zealand-based, so am painfully aware of the [local] industry's constraints around broadband access."
Google has two approaches to minimising the issue, he says. The first is to design its products to be efficient across all kinds of connections. The second is its creation of Google Gears, a platform that allows users to take web services offline.
The company is also spending up large on infrastructure in the Asia-Pacific region to tackle service latency and ensure services can be delivered at high speed.
"If there's one thing we've learned it is that speed is the number one thing to users in terms of these services. We think we're doing a good job at the moment."
If customers decide otherwise, there are plenty of competitors snapping at Google's heels. IDC's Turner says that as cloud computing shifts from first to second gear, Microsoft, IBM, Hewlett-Packard, SAP, EMC, Cisco and Oracle, among others, are building massive cloud services delivery capabilities.
"This means that the industry will be ready to shift into third gear - where there are a wide variety of cloud offerings in place provided by the major vendors and others ... and CIO use of cloud models for large parts of IT is starting to become commonplace - two to three years from now.
"There's no doubt this model will be a major - perhaps the majority - model for IT consumption over the next 15 to 20 years."
In the clouds
Definitions vary, but cloud computing involves providing IT capabilities - hardware and software - as a service, via the internet, meaning the user has to provide and maintain less of their own computer infrastructure.
Anthony Doesburg is an Auckland technology journalist and writes the Friday Business section's Technology column
