NASDAQ Using Amazon for Cloud Storage

The NASDAQ Stock Exchange is storing “many terabytes” of stock market data on Amazon’s S3 cloud storage system. NASDAQ’s use of Amazon Web Services is detailed in a story by Penny Crosman at Wall Street & Technology and will be the subject of a presentation at O’Reilly’s Money:Tech conference on Feb. 4-6 in New York.

NASDAQ is using AWS for Market Replay, a product that provides data on historic trades and lets investors analyze pricing in relation to news events and earnings calls to gauge the market response. Claude Courbois, associate VP of product development for NASDAQ OMX, said the use of S3 has helped it control costs for the service. Rather than using a database, the exchange is storing text files at Amazon and using an Adobe AIR client application to analyze the trading data and create trend graphics.   

Can Cloud Computing Handle Compliance?

Is cloud computing secure enough to meet enterprise regulatory compliance requirements? There was an interesting back and forth on this topic Wednesday between Chuck Goolsbee at SearchDataCenter.com and Michael Sheehan from GoGrid. Chuck’s big-picture take is reflected in the title of his column: “Don’t buy cloud computing hype: Business model will evaporate.” He bases his skepticism on a number of factors, including his doubts that cloud computing providers can meet regulatory compliance requirements such as the Payment Card Industry Data Security Standard (PCI DSS), which is essential for e-commerce:

The auditors have a very clear idea of exactly what they want to see in terms of server infrastructure, software configuration and network deployment. Deviations from the script are hard to get away with. Paramount to everything is the ability to audit. To see where, when and how payment card data is used. When they ask ‘where is X?’ you have to point to a specific spot (be it a server, a file system or a database table) and say, ‘X is right there.’ You also have to prove that X has not been altered without record of it, nor has ever left the building in an insecure or unencrypted state. So can any of this be trusted to a cloud? I doubt it.

Chuck has other reservations about the cloud computing business model. But since concerns about security are cited as the leading barrier to cloud computing adoption, let’s take a moment to examine the compliance issue in greater detail.

Cloud Roundup: Security, Stability At Issue

Are cloud providers responsive enough to security vulnerabilities? Are cloud computing platforms reliable enough for critical infrastructure? Is confusion about the difference between grid computing and cloud computing slowing cloud adoption? For perspectives on these questions, check out today’s cloud computing links:

• Amazon Web Services took more than seven months to address a potentially serious security vulnerability, according to Craig Balding at Cloud Security. A cryptographic weakness in request signing code for EC2, SimpleDB and SQS created the potential for data to be intercepted via a “man in the middle attack,” writes Balding, who suggests that Amazon should have closed the hole more quickly and done a better job notifying customers. “The geek in me loves Amazon AWS and the promise that it holds, but the Security Professional rooted in the ‘here and now’ is seeing too many red flags (the issues are wider than the handling of this one bug).”
• UK analyst firm Ovum is warning companies to avoid using the cloud for critical infrastructure, arguing that cloud platforms’ reliability has not kept pace with the hype. “Enterprises are right to be cautious about relying on such consumer/SME-oriented suppliers for anything resembling a mission-critical application or service,” said research firm Ovum in a report, saying a “spate of service outages” on the Amazon and Google platforms provides ample reason for caution.
• At Elastic Vapor, Reuven Cohen says resisetance by grid computing professionals may be slowing adoption of cloud computing by Wall Street. ”In a conversation yesterday with prominent wall street grid advocate, he bluntly said that no bank would use external (cloud) resources anytime in the near future and that a uniform cloud interface was a hopeless cause,” Reuven writes. “This is pretty much exactly the opposite from what I’m hearing from several high level IT folks within the banking industry.”    

Savvis in Cloud Testing Alliance

Is application testing the on ramp for cloud computing? Savvis Inc. sees testing as key step towards broader adoption of on-demand computing, and has allied with SOASTA to provide a testing service for cloud applications. The alliance will allow Savvis to offer customers a “virtual test lab” as part of its new software as a service (SaaS)  hosting platform and enablement services.

 SOASTA offers its testing environment as an on-demand service or as a hardware appliance, so Savvis customers preferring to test inside the firewall can use SOASTA to test locally and then deploy on Savvis’ platform.

”Cloud testing is a great entry point for companies looking to move into the Cloud as it replicates real world scenarios without the issues associated with production,” said Tom Lounibos, CEO of SOASTA. “In this time of economic uncertainty, companies are looking to reduce costs at every level. Internal test labs have long been money pits. Cloud testing not only reduces the cost of testing by about 60 percent but also provides better quality testing to ensure more reliable production applications.”

Cisco: Data Center 3.0 Eyes the InterCloud

Cisco’s Data Center 3.0 vision was unveiled as an initiative to create a unified networking fabric in the data center built atop Fibre Channel over Ethernet (FCoE). Cisco is now extending its vision to cloud computing, and seeing its networking gear and technologies enabling an “InterCloud” in which virtual machines move seamlessly between federated cloud computing platforms.

Doug Gourlay provides a Data Center 3.0 update in a video posted at the Cisco Data Center Networks blog and on Facebook. Doug discusses Cisco’s vision for “a federation of clouds based on open standards” that would create a market for enterprise cloud services. The interconnection of clouds has been the focus of active discussions in the cloud computing community for some time.

Will There be Thousands of Cloud Providers?

As Internet titans Amazon, Microsoft and Google build enormous data centers to support their cloud computing operations, there’s been much discussion about what the cloud will look like. Will cloud computing be dominated by a handful of companies with the resources to build massive server farms?

Gartner laid out a very different vision in this morning’s keynote at the Gartner Data Center Conference in Las Vegas. Gartner VP Thomas Bittman predicted that cloud computing will eventually support thousands of specialized providers, creating the need for a cottage industry of specialists to assemble client solutions from a smorgasbord of cloud offerings.

“In the future, we expect to see thousands of providers in the cloud,” with services being “put together like Lego blocks,” Bittman predicted. “We’re moving from this monolithic, ‘one provider does everything’ model to an ecosystem. We’re moving toward a more distributed, open world, and toward more customized services. We believe there will be a large number of mid-sized providers.”

Half of Enterprises See Cloud Presence By 2010

One of the cool features of the sessions at the Gartner Data Center Conference is the ability to conduct snap polls through mobile voting devices distributed to audience members. The demographics of the 2,000 attendees is heavy on enterprise IT and data center users, so these instapolls offer an interesting window into enterprise views on key topics.

One of the first polls today involved adoption of cloud computing. The question: When do you expect to use external cloud services in place of internal IT? Here’s the response:

• 20 percent are already using cloud services.
• 11 percent expect to adopt them in 2009.
• 20 percent expect to use cloud services in 2010.
• 24 percent will use cloud services “later.”
• 11 percent expect to never use external cloud services.

That means that 51 percent of the audience of enterprise users expects to be using external cloud services in some fashion by 2010. The balance of the responses were someplace between 2011 and “later.”

UPDATE: It should be noted that these numbers may slightly over-report the percentage of enterprise organizations moving in-house apps top the cloud, as some companies may have several employees at the Gartner event.

Cost Savings as a Driver for Cloud Computing

There’s been active discussion in the industry about whether cloud computing will benefit from the economic crisis or face challenges due to failures among its startup-heavy customer base. Network World has an IT profile of Preferred Hotel Group, which makes the case for cloud computing as a powerful cost management tool in a down economy.

Preferred, which runs a chain of luxury hotels, has shifted its modest data center operation to The Enterprise Cloud, the cloud computing platform from Terremark (TMRK). The Enterprise Cloud will provide Prefered with 10 virtual servers, including seven on full-time duty and three in reserve for demand spikes. Each comes with a preset quota of disk space, memory, compute power and bandwidth. The setup costs $16,000 a month.

“Everyone is checking their budgets now,” said Chad Swartz, senior manager of IT operations for preferred. “If you go to the board, is it an easier sell to say we need to spend $200,000 in capital costs and $10,000 a month? Or just pay a $10,000 implementation cost and $16,000 per month? The cloud environment is going to explode, if just for the cost savings.”