Recently I had dinner with the editor of an industry publication for enterprise networking technology. When I asked him what the hot topic for his publication was he simply said "cloud". When I look at the most recent announcements in the carrier and service provider publications, what do I see? Clouds.

Is it a hype or reality? Is Oracle's Larry Ellison right when he says that, "The interesting thing about Cloud Computing is that we've redefined Cloud Computing to include everything that we already do."? Is it simply a new skin for an old concept? Or are there new elements that came into existence, fueling a trend that could become disruptive to the entire Information, Communication and Telecommunication (ICT) industry?

Let's look at a few facts:

1. Mega data centers exist and profitable XaaS models are in place.
   There are companies on the market that operate huge data centers with unprecedented computing power and data storage facilities. Their purchasing power allows them to procure computing and storage technology at a fraction of the price that smaller players would have to pay. Various business models that sell Infrastructure as a Service (IaaS) are in place. On top we see successful models for Platform as a Service (PaaS) or Software as a Service (SaaS), all gaining acceptance and providing positive returns.
2. Small, medium and even large enterprises look for IT solutions that require little or no upfront investment and scale with demand
   Especially in times of economic uncertainty CFOs are looking for ways to reduce capital expenditure and mitigate risks. An outsourced IT model that promises high performance and security combined with scalability, elasticity and predictable cost is an attractive package.
3. Service providers look for new revenue opportunities
   In times of iPhones, fancy PDAs and an ever growing popularity of video in the web 2.0 space, most carriers find themselves between a rock and a hard place. Bandwidth consumption from non-business applications is going through the roof, but revenues aren't. The required upgrade of the network infrastructure to support the new demand cannot be supported by the revenue generated through a flat-rate based pricing model. Premium services for enterprises supporting mission-critical cloud services could be one way to soften that dilemma.

Looking at these three points it seems that Cloud Computing is positioned to become a good solution to several challenges we have in the ICT industry. Is it the right answer for all questions? Certainly not. Do all involved players believe in it and move in the same direction? Probably not. While our industry is competitive and innovative, it still takes time for big transitions to happen. With every new opportunity there are challenges that need to be overcome.

I would argue, however, that Cloud Computing has a lot of good things going for it and that the trend is gaining momentum. And I would expect that over time, the network will become the most mission-critical asset - inside the cloud - and around it. Flexible high-speed networks that provide reliable connectivity with low latency in several areas:

1. Inside the cloud

• High-speed optical networks provide intra data center connectivity that makes data centers more reliable and survivable.
• Scalable optical networks connect geographically dispersed data center islands and increase the efficiency inside the cloud.
• Ultimately programmable optical networks will evolve that provide a virtual networking resource to the cloud providing on demand networking power to the applications that ride on top.

2. In- and out-of-the cloud

Best effort Internet access is only acceptable for non-mission critical services. SLA-based business services, with quality of service monitoring and assurance are needed to move mission critical applications into the cloud.

• Carrier Ethernet access solutions provide a very meaningful solution already today. The next step is the introduction of application-aware services that provide specific performance parameters for the various applications that are being supported within the Ethernet pipe.
• High-end users will demand in addition to high data throughput and reliability features that guarantee lowest latency and highest security - through means like data encryption. Both are domains where fiber optic transmission technology is the only viable choice.

So is there a conclusion? Well, as a member of the ICT industry I love buzz words and new trends. As a member of the networking industry I have seen many highs and lows over the last two decades. Today I would say the fun has returned and the excitement is back.

To learn more about Cloud Computing, follow the links below:

• White Paper: Virtualized Optical Networks for sustainable Cloud Services
• Webinar: Cloud Computing - Opportunities and challenges for service providers: Listen here
• Phlog: Listen to me talk further on this topic: