Innovative companies and cloud computing
By Aake Edlund, BalticGrid/KTH, Sweden
To maintain a competitive advantage through innovation, companies of today must handle increasingly dynamic environments and increasingly rapid innovation cycles. Cloud computing is addressing many of these challenges, especially the possibility of rapid and cost-efficient prototyping and scaling. In this report we describe an example of how an EU-funded academic grid project supports small and medium enterprises (SMEs) and startups through a cloud service.
Grids and SMEs
The uptake of grid technology by small and medium-sized companies has not been as high as anticipated. One reason is possibly the complexity of the underlying problem: sharing resources in a seamless fashion requires complex techniques to ensure security and control. In many ways the grid offering is useful from a business perspective (for example, in establishing new markets for resources), but users are still required to work hard to join grid environments and to port applications. In addition, the concept of sharing resources is still a barrier in many industries and also within corporations; security, especially mutual trust issues, is usually the first obstacle mentioned. Another issue is the overall quality of the open source middlewares, still considered too low for many companies.
Clouds - a new way to attract SMEs
Compared to grid, cloud services are less ambitious and thus less complex, resulting in a reduced barrier for the user, as well as higher security, availability and quality. These simplifications, along with cloud’s high degree of flexibility, have stirred great interest from industry, and while open grid efforts are lead by academia, cloud computing is to a high degree driven by business. For smaller companies flexibility is the key: the ability to quickly launch and de-launch, or to move capital investments (buying hardware) to operation expenses (‘hiring’ infrastructure, pay-per-use). Larger companies are more hesitant, trying clouds in a stepwise manner, combining private clouds with public-clouds-when-needed, the so-called hybrid clouds.
Startups and clouds
Many startup companies have no alternatives but to use all means of cost minimization, and here cloud computing fits very well. Startups don’t have time to build their own infrastructure, and usually don’t know what they will need in the near future. Here cloud computing offers a quick launch, and de-launch, when needed. Investors also benefit
from this shift in cost models: initial risks are lower, proof-of-concept is faster, and in the case of early success, solutions are highly scalable.
BalticGrid Innovation Lab
Within the BalticGrid project a focused effort to attract SMEs and startups to use the regional e-Infrastructure was made, resulting in the creation of the BalticGrid Innovation Lab. The BalticGrid Innovation Lab (BGi) aims to educate early stage start-ups in the use of BalticGrid resources, mainly through the use of BalticCloud, a cloud interface based on open-source solutions (Eucalyptus, OpenNEbula). At BGi companies learn how to leverage cloud computing to change their cost model and possibly lower their internal IT costs, as well as to prepare short-term pilots, and to prototype novel services for their customers. BGi is also a business networking effort, all with BalticGrid in common.
Lesson learned
BGi, together with BalticCloud, shows a way to attract SMEs and startups in the region, and the experience so far is very positive. Early examples stem from the movie production industry (rendering on BalticCloud) and larger IT infrastructure companies preparing cloud services for startups. The project has also produced a number of cloud
consultancy firms and there is growing interest in cloud support for innovation services (e.g. incubators) in the region.
