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CIOs report that private cloud is all the rage now. The Cisco’s of the world argue that hybrid cloud is the optimal path to adoption. Meanwhile, the big public cloud providers like Google and Amazon argue that it’s just a matter of time before most computing is done on public platforms like theirs. Each party with a dog in the fight proclaims they see the one true path.

Who is right? Where can we look for lessons to guide us? Are there fundamental economic forces that foster the private, public, and hybrid cloud frenzy? And if so, is there somewhere else we see such a dynamic? Surprisingly, they come from our transitions to new forms of energy.

Here is where we turn to the lessons of energy transformations and Manitoba.  Vaclav Smil is a prolific writer and Professor Emeritus at the University of Manitoba. His research and explanations on the economics of energy provide the analogy to understand the emergence and transition to the cloud. While Smil is writing on the time it takes to move to renewable sources of energy, two of his observations help us understand why legacy and many cloud deployment models are all present at the same time.

First, the amount of sheer growth required from providers just to meet the needs. Just like renewables have been around for a short time and despite accelerated adoption in many countries they still only meet a small fraction of total energy needs. Likewise, cloud too is relatively young (Salesforce.com was established in 1999 and Amazon Web Services in just 2006).

Gartner projects worldwide IT budgets for 2015 equal about $2.69 Trillion. The IaaS (Infrastructure as a Service) providers will do about $21+ Billion in revenue. Like alternative energy, IaaS is certainly growing fast but in the big picture it is tiny and constitutes less than one percent (0.78%) of the total IT annual spend. Toss in all the SaaS (Software as a Service) providers at $37.7 Billion and you are still only a drop in the bucket. There is an enormous build out required to meet just the current capacity need.

And that brings us to Smil’s other observation. The switch to different forms of energy took anywhere from 50 to 75 years because of the huge size and investment in the infrastructure. Likewise, electronic computing as we know it has been woven into business, government and academia since the 1950’s. Granted, a lot has changed and the technology refreshes itself ever faster but there are still a lot of investments in equipment and applications that need to be amortized. Not to mention old skills unlearned/new ones acquired. That sort of thing takes time – probably not 50 or 75 years but certainly not just 10 or 15.

Where does that leave you? Be prepared for a longer haul. Private and Hybrid clouds are in many ways the logical transition deployment as the shift occurs to increasing Public cloud. Vaclav Smil leaves us with another point that we should keep in mind. These shifts in energy sources are daunting because they involve rejecting a way of life deeply ingrained. This will be no less true with cloud computing.

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