I spoke this morning with the cloud evangelist for a hardware manufacturer. Not surprisingly, they come at cloud from the iron up, so for them cloud is mostly about virtualization with a little more buzz.
While I can understand this viewpoint, if today's cloud is just yesterday's server consolidation in new clothes, then Larry Ellison's latest "a cloud is just water vapor" rant is probably appropriate.
So what exactly is the dividing line between virtualization and true cloud goodness? I think the key lies in bringing together a fuller solution with a cloud platform than with a virtualization platform.
Cloud computing gets interesting when the platform includes not just deployment (infrastructure as a service or IaaS) but also development (platform as a service or PaaS). Linking these two capabilities opens up fundamentally new markets as well as compelling economics.
Virtualization is about abstracting application deployment so that one box can run many apps, with each app pretending that it is lord and master of it's virtual computer. The value of virtualization is to reduce the amount of hardware needed to run a set of apps and correspondingly reducing the amount of systems administration time needed to manage the overall data center.
Cloud computing is about abstracting application development and deployment so that anyone can develop and manage applications without needing specialized expertise. The value of cloud computing is to reduce all IT costs while increasing organizational flexibility. More people can build the apps they need and fewer expert developers, DBAs and systems administrators are needed.
At its core, virtualization improves IT efficiency - doing traditional computing with fewer resources. On the other hand, cloud computing improves IT effectiveness - empowering more people to build applications with more flexibility and fewer experts. For example, this is the core value prop behind IBM's Cloud Quickstart Program, which includes IBM, Amazon EC2, WaveMaker and RightScale.
Our view at WaveMaker is that the big private cloud payoff comes only when you make both development and deployment of web apps radically easier (cloud-ready computing). If you will, virtualization and private cloud management (IaaS) both reduce the administration costs - the cost transformation comes when you slash not just administration but also development and maintenance costs (IaaS + PaaS).