The IT industry is faced with a complexity and affordability crisis – explosive information growth, heavily interconnected and interdependent systems, on average 70% of IT spending going to maintenance, low utilization of resources driving up fixed cost, energy consumption becoming an ever bigger drain on budgets.

At the same time, business needs for flexibility and responsiveness continue unabated. This creates an urgency for enterprises to rethink the way their data centers are set up and managed, and how they receive and deliver services.

Bring this together with advances in technology - from service orientation, automation and service management to virtualization - and you have what Dr Kristof Kloeckner, VP of Cloud Computing Platforms at IBM vividly calls "a perfect storm." Kloeckner was a Keynote speaker at SYS-CON's 3-day 2nd International Cloud Computing Conference & Expo (March 30-April 1, 2009), the industry's leading worldwide Cloud Computing event, now held three times a year, in New York, Silicon Valley, and Europe.

In this interview with Conference Chair Jeremy Geelan, conducted in March, Dr Kloeckner discusses a wide range of Cloud Computing issues and give a very clear insight into IBM's vision with regard to Cloud Services and the substantially improved delivery economics that Cloud Computing is making possible.

Jeremy Geelan: What are the main business drivers for Cloud Computing - for this overall technology trend?

Dr Kristof Kloeckner: In the end, it’s all about money – how much do you spend for just maintaining the status quo, and how much on supporting truly differentiating business initiatives. This drives an imperative for dynamic infrastructures, increasing resource utilization and reducing labor costs, and for more flexible economics in the consumption and delivery of IT based services.

Geelan: And how about from a specifically IBM perspective – what do you think is missing right now from the Cloud Computing Ecosystem, that you can uniquely provide?

Kloeckner: While IBM invented many of the technologies that form the basis of cloud computing (virtualization, for instance, was first implemented in our mainframes), our greatest asset is our deep understanding of our clients, and our experience running the worlds largest data centers.

We are using this experience to build a comprehensive portfolio of cloud related project based services as well as products to build their own clouds, as well as providing cloud delivered services ourselves. Our spans infrastructure services, platform services and application, process and information services.

We also have a strong and long-standing commitment to open environments, and we will work with the industry to ‘keep the clouds open’. This is a major prerequisite for the emergence of a cloud eco-system.

Geelan: How important to IBM strategically is its Blue Cloud Group?

Kloeckner: Well, we are actually calling the new organization that was formed under Erich Clementi “Enterprise Initiatives’, indicating that it brings together all of IBM to build and deliver offerings that enable cloud computing.

Cloud Computing is important to us because the promise of substantially improved delivery economics will have a massive transformative impact on IT based services and business processes. There is a tremendous amount of energy around cloud computing across IBM, and in our clients and partners.

Geelan: What’s the best way, do you think, to define “cloud services” – from an Enterprise IT perspective?

Kloeckner: From a provider perspective, cloud services are characterized through self service, economies of scale and hybrid (public, private and mixed) modes of delivery. Self-service drives client satisfaction and standardization of services. Economies of scale are enabled through large virtualized and automated shared environments, and hybrid delivery models combine external and internal services.

From a user perspective, the most important aspects are ease of use, new economics derived from cost structures that are achieved by greater sharing of resources, and flexible sourcing.

Geelan: How big an issue is security for enterprises who wish to migrate toward this kind of an infrastructure wholly or in part?

Kloeckner: Enterprises have a choice among a spectrum of delivery modes, from private to virtual private to public clouds, and they are making these selections based on workload characteristics. We find many clients opting to keep their most sensitive applications and data private, behind their firewalls (or virtually private with limited access). In these setups, all the existing best practices apply for data and application access and trust and identity management.

As for public clouds it’s important to remember that as in the Web in general, clients need to fully understand the security policies and practices of their providers. I believe that federated identity and trust management will be extremely important here.

Geelan: And what about management, how’s that being taken care of? Can the deployment and management of computing clouds really be automated, or is that in the far-off future still?

Kloeckner: We’re getting there. In February, IBM launched The Tivoli Service Automation Manager, which facilitates dynamic instantiation of cloud delivered services and their management along the entire life cycle, drawing on IBM Service Management capabilities and platform management services.

Geelan: How big a part are standards going to play in the success of the Cloud?

Kloeckner: Standards are essential for customer choice and eco-system growth. We believe the area most important to address is interoperability between clouds and the integration between clouds and other enterprise IT services. Work done on service oriented architecture in recent years will greatly help us address the issue of keeping the clouds open.

Geelan: Tell about the partnerships you just announced with Juniper and Amazon. What do they indicate about the future trajectory of IBM’s endeavors in this area?

Kloeckner: IBM has a broad ecosystem of partners and we have a long history of supporting customer choice. We chose to work with Juniper in this instance of demonstrating connectivity between clouds based on the combination of features, ease of integration and ability to leverage their MPLS technology for secure remote access. Amazon represents yet another venue for IBM to sell its software. We will continue to work with partners to advance the adoption of technologies like cloud computing, and especially to ensure open clouds.

Geelan: Moving beneath the hood for a moment, how does IBM handle the virtualization layer of its Cloud infrastructure?

Kloeckner: What we do depends upon the choice of underlying platform(s). Increasingly, virtualization technologies will be provided as integrated capabilities of the IT resources themselves. This has long been our practice on System z and Power Systems, and overall the industry is moving in this direction. The benefits include greater simplicity, efficiency, resiliency, and security.

Our service management software builds upon these virtualization technologies to provide much greater IT benefits, especially in terms of productivity and agility. Key virtualization-based capabilities of value to Clouds include resource pool ("ensemble") management and virtual resource object management. What sets us apart from others is our strength in management across the diversity of physical and virtual resources (at both the hardware and application levels) - diversity which will continue to increase driven by accelerating innovation.

Geelan: When you unveiled you new cloud strategy at a press conference during Pulse 2009, you underlined that IBM had a great deal to offer smaller businesses, in terms of offering them ready access to best practices and saving them from re-inventing the wheel. What offering/s in particular did you have in mind?

Kloeckner: IBM has a number of cloud offerings that suit small and medium sized businesses well because they offer superior function that would not affordable for smaller businesses to build and run themselves. As an example, LotusLive is a cloud-delivered portfolio of social networking and collaboration services designed for businesses. Launched in January, the service already has 30,000 businesses signed up. As another example, IBM’s Information Protection Services offer enterprise-grade data back up and recovery services to SMB clients like Neighborhood Centers, Allscripts and The Unites States Golf Association. For smaller cloud service providers, IBM’s Resilient Cloud Validation program allows businesses who collaborate with IBM on a rigorous, consistent and proven program of benchmarking and design validation to use the IBM logo: “Resilient Cloud” when marketing their services.

Geelan: Previously you’ve been VP of development for Tivoli, what parts of that experience help you most in formulating IBM’s cloud strategy?

Kloeckner: Tivoli lives in the world of service management and service delivery, so the experience I gained in Tivoli gives me an appreciation of the operational considerations of establishing and running a cloud. Tivoli also works very closely with our Systems and Technology Group and with IBM Research to drive the management of virtualized environments. Clearly, (service) automation and virtualization enabling a dynamic infrastructure, are essential to deliver a large part of the efficiencies and savings clients want to gain from cloud computing. Essentially, our ‘operational support system’, to use service provider terminology, is based on the Tivoli service management portfolio, in particular Tivoli Service Automation Manager.

Geelan: SYS-CON had the pleasure some years ago of interviewing Willy Chiu – who I believe was a colleague of yours – and his vision of HPC seemed already to anticipate much of what we’re now calling cloud computing. How long has IBM in fact been cooking its Cloud in the kitchen?

Kloeckner: While November 15, 2007 marked the official unveiling of IBM’s Blue Cloud initiative, you can find many of the business considerations and technology components that drive and enable cloud computing already as part of our ‘On Demand’ initiative – service orientation, automation, virtualization, and especially the notion that business and technology need to come together to develop transformational force.

As Sam Palmisano defined it in 2005, “On Demand Business is our way of describing a fundamental shift in computing architecture and how it is applied to business — a shift toward integrated solutions and quantifiable business value, not just technology features and functions.” Sounds pretty similar to what folks are saying about cloud today. We are now in the next phase of technology evolution, with a high sense of business urgency.

Geelan: What of the future – what are some of the most interesting infrastructure technologies being developed at IBM right now?

Kloeckner: Within IBM Research and Development, we are working on a number of exciting technologies, for instance management of ensembles of virtualized resources, service life cycle management, multi-tenancy support, image management, tools for development and deployment of services, the whole notion of ‘connectivity as a service’, to name just a few. We are also learning a lot from direct engagements with advanced clients, and working on application areas that can benefit from the cloud, like analytics or massive event processing.

As a general remark, we are seeing more ‘smart’ applications emerging in an interconnected world of ‘intelligent’, instrumented systems, in industries like energy and utilities, health care, logistics and many others. We believe that many of these applications will need clouds for efficient delivery.

Geelan: 2009 is a year of obvious challenges, from both a CapEx and an OpEx perspective, for anyone involved with Enterprise IT. Finally, what’s your top tip, as a seasoned software executive, to those other CTOs out there right now – especially CTOs of embattled start-ups who may be looking for some magic bullet to ensure they’re alive (and well) as a company in 2010?

Kloeckner: Take a careful look at the challenges and opportunities that cloud computing offers in your specific situation, develop a strategy and choose a strong partner for implementation. We are confident that IBM has much to offer in this space…