KUALA LUMPUR: Cloud computing — where software applications reside on the Internet rather than on individual PCs — is gaining interest among businesses, and open-source advocate Red Hat Inc wants in on this.

It believes more and more companies will be turning to cloud computing in the near future because the infrastructure makes good business sense.

Daniel Ng, marketing director for Red Hat Asia Pacific, said accessing applications and data from the cloud would help reduce operating costs for businesses.

It would mean that a company could in effect turn Capex, or capital expenditure, into Opex, which is operational expenses, he said.

Also, Ng said, utilising cloud computing allows a business to pass on the responsibility of looking after the technology aspects of the company to a third party.

He said the user and the technology provider would have a service-level agreement to ensure that the data stored in the cloud is secure.

Some industry pundits, however, disagree that there are any benefits to be had by turning Capex into Opex. One pundit, Geva Perry, wrote in his blog Thinking out Cloud (http://tinyurl.com/96vhwh) that businesses should consider the “time value of money.” This, blogged Perry, applies to the notion of a business investing upfront in IT infrastructure or paying for it over time.

“Let’s get something straight: On a per time unit basis, it is more expensive to rent than to buy. This almost always holds true,” he said.

Perry also points to another pundit’s, Joe Weinman’s, 10 Laws of Cloudonomics on the Web (http://tinyurl.com/5wv9d7).

Others, however, think that Perry may have missed a point in his argument. One commentor on the blog said it is not all about the nuances of how the money is accounted for and when it is paid. It’s also about “whose budget pays for it.”

“I’ve been in many sales situations where departmental budgets, which are from the capital expenditure pot, are either not sufficient, or need to be stretched out, which impacts what can be done.

“Moving the deal to a budget which is accounted for by Opex means that in some cases, the department/group has a way which it can do business ...,” wrote Guy Nirpaz in response to Perry.

Nirpaz added that cloud has the advantage that its core SaaS (software as a service) type model is much easier to slot into an Opex budget stream.

Amazon story

Red Hat’s Ng said cloud computing is an evolution of centralised computing that was popular in the mid-90s. But that didn’t fare well because of the limited bandwith and low Internet penetration then.

Cloud computing today, he said, has opened a new kind of revenue generator for companies such as online book merchant Amazon.com.

Ng said Red Hat helped Amazon.com set up a public cloud infrastructure; a multitenancy infrastructure that is shared by several users.

Realising that its large server farms were not being fully utilised during some periods, Amazon.com sold time slices of its servers to other users.

“Basically, other companies can utilise a piece of the Amazon.com cloud for a few hours each day for a minimum fee,” said Ng.

Another area Red Hat is working on with cloud computing is server virtualisation.

To get the ball rolling, it recently signed an agreement with rival Microsoft Corp to ensure that Red Hat virtualisation software — Red Hat Enterprise Virtualisation — works smoothly with Microsoft’s Hypervisor server-virtualisation technology, and vice versa.

The joint-certification agreement, Ng said, is due to customer requests. He said that with the agreement, service providers are able to choose which brand of technology they want to implement.

“Customers do not specifically ask for a cloud infrastructure based on technology from one vendor but one made up of the best solutions available,” he said, adding that this might even be the foundation of future cloud computing providers.

Making it secure

The company is also working on middleware and a product known as Messaging Real-time in Grid (MRG) to facilitate the setting up of a cloud infrastructure and securing transactions in the cloud between companies and customers.

In the consumer circle, Red Hat is working on a product called Virtual Desktop Integration, which allows the delivery and control of cloud-based applications.

Ng said he sees the product being used in a classroom environment where teachers are able to deliver the lesson to students via the Web.

“In this environment, the teacher is in control as to where the students look for information and how they use it,” he added.

He said it may also be used in the health sector where caregivers can immediately pull out patient information and quickly determine the right treatments.

As wonderful as the technology is, Ng said, cloud computing has its share of critics, especially when it comes to data security in that kind of infrastructure.

“Industry players from various sectors of technology are currently developing tools to make the infrastructure more secure,” he said.