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14/11/2010 / vincentkhkim

cloud computing

1. Expansion of Cloud Computing Services

Cloud computing refers to Internet-based computing, whereby IT resources are provided to users on demand via Internet access. Cloud computing provides users with IT services such as software, platforms and infrastructure through a “cloud,” in which IT resources including servers, storage, networks and applications programs are integrated based on virtualisation technology and distributed processing. As a result, cloud computing has introduced the concept of “leasing” to the way of employing IT resources, which has so far revolved around “purchase and possession.”

FIG 1. COULD COMPUTING SERVICES
Software as a Service : Provision of application programs and solutions
Platform as a Service : Development environments, data processing and provision of infrastructure services
Infrastructure as a Service : Provision of IT resources like servers, storage, networks, etc

Cloud computing is emerging as a solution to meet the growing demand for an expanded IT service environment, which has been brought on by the rapid expansion of the Internet and the evolution of Web 2.0. The IT service environment has transitioned from grid computing, which refers to the combination of computer resources, to utility computing and finally to cloud computing.
Thanks to cloud computing services, companies do not need to invest in expensive IT infrastructure up-front, nor do they have to bear the high maintenance costs. They can borrow as much as they need and only pay for what they use. In addition, they can rent IT resources when they need capacity and pull it back when they don’t, which raises the efficiency of IT resource use. The New York Times, for example, turned to Amazon’s cloud computing service in a bid to expand its web-based business through the digitalisation of its news articles from September 1851 to December 1980. Scanned images of 11 million pages were stored in Amazon’s cloud web storage, and 100 virtual servers were set up for parallel processing. The scanned images were then converted into PDF files. The digitalisation process, which was first estimated to take a whopping 14 years using the New York Times’ own servers, was completed within 24 hours at the very low cost of US$240.

FIG 2. IT SERVICE ENVIRONMENT
Economics of Future IT Business – IBM Cloud Computing

What’s more, as cloud computing eliminates time-bound and spatial constraints by expanding the physical workplace to fix and wireless network spaces, it promotes telecommuting and working on the move, thereby cutting investments in social overhead capital (SOC). The Korean government has been making headway with “Smart Work” (a flexible working mode based on cloud computing services) and plans to get 30% of public servants and 30% of the nation’s labor force on board with the smart work program by 2015. “Smart Work,” which refers to working at home or working remotely, will enhance productivity and scale back investments in social overhead capital (SOC) through reductions in both commuting time (from the average 150 minutes to 90 minutes) and office space. With more governments and companies jumping on the bandwagon, the global market for cloud computing reached US$ 79.6 billion in 2009 and is expected to soar 34% annually to US$ 343.4 billion in 2014. Korea’s cloud computing market, which is currently in its infancy, amounted to KRW 673.9 billion in 2009 and seems on track to reach KRW 961 billion this year. And the market’s future looks rosier with the Korean government’s cloud computing promotion policy and adoption by numerous companies.

FIG 3. OUTLOOK FOR THE CLOUD COMPUTING MARKET

With the growing popularity of cloud computing, relevant IT companies are heavily engaged in M&A activities and forming alliances so as to seize market hegemony. For instance, HP teamed up with its rivals (Microsoft and IBM) to acquire 3Com (a leading provider of converged voice and data networking solutions) at US$ 2.7 billion in November 2009 and Palm (a purveyor of smart-phones powered by the Palm webOS mobile operating system) at US$ 1.2 billion in April of this year.

2. Evolution of Cloud Computing

A plethora of new cloud computing services will appear in response to the following three IT industrial trends: “mobilisation” (user Internet environments rapidly go mobile in tandem with the expansion of mobile Internet devices such as smart-phones and tablet PCs and a buildup of wireless communications infrastructures like 3G mobile communications and wireless LAN); “personalisation” (individuals’ active content creation and personalised environments for content usage); and “openness” (meeting demands for open-source technology, which would address the interoperability issue

stemming from different platforms set up by operators, and for standardisation.

FIG 4. EVOLUTION OF CLOUD COMPUTING


2-1. Mobilisation: Mobile Cloud

Cloud computing is on the road to transforming the operating environment of mobile devices into the “Mobile Web.” Cloud computing, which supports data processing and storage outside mobile devices, lightens the burden of information processing on mobile devices, thereby facilitating mobile device utilisation. In addition, it makes possible running application programs via Mobile Web-based access, so previous limitations of mobile apps — such as the complicated process of download and installation – have been overcome to clear the way for bringing PC-based application programs into use. The launch of the 5 to 10-inch tablet PCs, which provide the optimum environment for media watching, web browsing and documentation work in the Mobile Web, is taking place at full throttle with the projection of the tablet PC market growing to nearly 57 million units by 2015.

TABLE.1 2010’S MAJOR TABLE PCs

A growing number of large companies are opting for corporate mobile offices (the Mobile Web + cloud computing), which are packed with beefed-up security and information processing to take care of a wide range of work, from the simple task of email checks to transactions and sales management.
Mobile data synchronisation and mobile information processing services (e.g. searches based on voices and images and voice translation) are also deserving of attention. A case in point is Google Goggles, a downloadable image recognition application that turns the mobile camera into a search tool: pictures taken by mobile devices are sent to Google’s cloud datacenters and then Google Goggles returns search results.


2-2. Personalisation: Personal Cloud

Cloud computing offers a custom-tailored web environment, where a multitude of contents can be easily accessed anytime, anywhere. In particular, since cloud-based web storage stores various user-created contents and provides a content management environment, additional storage equipment and data backups have become unnecessary. Moreover, content players such as media players are offered to allow users to easily watch contents on varied devices like PCs, digital TV, smart-phones and game consoles.
In addition, audio and video streaming is used to address interoperability-related problems caused by different file formats. Thus, users are spared the inconvenience of data conversion. In line with the “personalisation” trend, IT companies such as mobile carriers and portal operators are vying to launch personalisation-themed cloud services, which offer personalised contents and content-using tools, in order to attract more new customers and retain existing ones. NHN, who runs Korea’ popular portal “NAVER,” is making preparations for the launch of a personalised web service that offers an environment for content storage, management and sharing by linking cloud-based web storage to social networking services. As cloud-based content services come with both content (e.g. music and games) and content operating environments, they are continuously growing, basking in the attention from users.

Cloud-based, Personalised Music Streaming Service “ Spotify”

Spotify is a cloud-based, music streaming service that allows unlimited streaming of selected music from a multitude of record labels
– After its launch in October of 2008, it saw its membership grow to nearly 8 million in seven EU nations including the UK and Sweden
– It is emerging as an archrival of iTunes, a PC-based media player.
It boasts its user-friendly operating environment and allows users to swap and share music through email, Facebook and Twitter
– Copyright-related issues such as music sharing and copying are resolved by sharing only music data links


2-3. Openness: Open Cloud

Cloud service platforms are vigorously embracing “openness” in response to the growing demand for opening service platforms and standardisation, which are deemed to resolve interoperability-related problems (e.g. overlapping development and platform-specific models), raised by IT companies building their own platforms. In particular, building open- source cloud development environments is underway based on Linux and Java and PHP
whose development source codes are disclosed to allow custom-made development. For instance, the Simple Cloud API project, a new open source initiative led by Zend Technologies (the largest corporate contributor to the PHP programming language) has drawn fervent participation from IBM and Microsoft.
In the future, open-source cloud platforms are projected to broaden both content production and user bases, spearheading the growth in the content and services market. In particular, the mobile content market is forecast to realize economies of scale through the provision of a wide array of cross-platform contents.

FIG 5. EXPANSION OF THE MOBILE CONTENT MARKET

Independent Platforms Cloud-based
Open-source Platforms Cross-platform content can be developed
Content developers and users are confined to their platforms

In sync with the expansion of open-source cloud platforms, IT companies are keen to secure a high vantage point by revamping existing platforms and forging business partnerships. Microsoft launched the Windows Azure platform, a flexible cloud-computing platform that supports open-source software. In cooperation with the EU, IBM is pushing ahead with the development of an open-source cloud services platform for SMEs. On the domestic front, SK C&C, SK Group’s technology service arm, has paired up with Red Hat, a major Linux distribution vendor, to secure an open-source cloud platform based on Linux and Java.

Along with the brisk activities of the IT companies, international standardisation entities and research consortiums are working on designing open-source cloud platforms and standardising service technologies. Korea is also fully involved in cloud standardisation efforts: it is working as chair of ISO/IEC JTC 1.


3. Outlook and Suggestions

The fledging cloud computing market will soon enter its development phase as cloud computing services steps into the spotlight. IT companies should take the initiative by preemptively responding to changes in the cloud computing market, which will coincide with IT industrial trends: mobilisation, personalisation and openness.
Above all, building on the world-class communications infrastructure and the early adoption of the Internet, Korean IT companies need to set their sights on the mobile, personalized cloud services in order to develop varied services and build their competition base through independently securing open-source platforms. In addition, to enhance work efficiency and ramp up competitiveness, non-IT companies have to fully embrace cloud computing services as a part of the IT infrastructure, and promote flexible work modes such as working at home and flexible working hours.
In particular, next-generation industries like bio-engineering and aerospace engineering, for which IT infrastructure is crucial, should adopt cloud computing earlier and lay the groundwork for utilizing it. On the other hand, to make cloud computing services widely available, the Korean government should offer support for the development of key cloud technologies and international standardisation, and push for the public sector’s early adoption of cloud computing. And acting in response to the expansion of mobile offices and personalized services, the government should thrash out relevant laws and regulations on quality standards and information security; and a certification system.

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