Let's Be Futuristic for a Moment

I am fascinated by the artificial intelligence (AI) technology. It excites me but at the same time it scares me. I worry about becoming an obsolete species on the earth. Even though I tend to believe that it will be human being's ultimate fate like dinosaurs, but this time it will be AIs who may replace us! Nevertheless, AI technology promises to take the civilization much further. Does cloud computing share any link with AI technology? Can AI affect cloud computing or vice versa? Please remember that the current AI technologies are not even close to what scientists and researchers predict it to be. Watch the video to find out the current state of AIs:

Its functionality is extremely limited even though it still affects the everyday world especially the world wide web in a big way. I wanted the last post of this blogging cycle to be looking towards the future so that you will have some thoughts for the week. Here is a video that provides research findings on how AI can perform surveillance.:

 

Let us start with a recent announcement from Google. Machine Learning is considered to be a form of AI. It can learn while processing data and has the ability to be proficient in a particular application over time. Google announced a new machine learning engine (http://econfuture.wordpress.com/2010/08/31/google-cloud-computing-machine-learning-and-self-destruction/) that will be offered as a part of Google's cloud computing strategy. It promises to perform customer sentiment analysis, message routing decisions, recommendations, suspicious activity detection etc. In other word it can make some ambiguous decisions which computers so far has not been able to do. Thus it can take over some business activities which have been performed by human beings so far. This new application will make an organization flatter by eliminating middle managers and will enhance the capabilities of low-wage offshore workers. Essentially, this new engine will motivate companies to move its IT needs to Google cloud. Here is a video that explains the importance of AI in businesses:

We have been concentrating on how cloud computing can enable small and medium businesses and start ups to compete with large enterprises by transforming the IT infrastructure cost from a fixed cost to a variable cost. But this new Google offering may shake the ecosystem again. It will empower the large and complex organizations to streamline the workforce hence will make it easier to run. The large corporations will essentially have similar organizational structure as the SMBs but with other assets such as more capital, machines and intellectual properties.

Cloud computing technology emphasizes on storing the applications, processes and data in the same cloud. Thus AIs can access an extremely large volume of data and can use unlimited computing power to make its decision. Traditional IT infrastructures, though extremely efficient, still cannot compete with clouds in this aspect. Thus cloud computing will help AIs to make better predictions (http://omarsbrain.wordpress.com/2010/09/17/artificial-intelligence-raining-from-%E2%80%9Cthe-cloud%E2%80%9D-on-ubiquitous-computers/).

It seems like cloud computing and AI can help each other to reach some of their promised potential in the future and a lot of researchers in both fields are working towards it. I will finish this post by letting you watch a video on how IBM's Watson, which is capable of answering ambiguous questions to some extent, functions:

Enterprise Resource Planning and Cloud Computing

Enterprise Resource Planning (ERP), an important source of competitive advantage for companies, essentially integrates management information systems of all the business functions across the organizations, assimilates the organization with its business partners around the globe and automates the whole information flow process. You all know the importance and functionality of ERP. If you want to start somewhere here is a video for you on ERP:

If you are a student of business management like me, you must have come across numerous case studies on how successful construction and implementation of ERP has made many organization successful. Now some people are suggesting that moving your own ERP system to cloud  can be beneficial. I was as confused as you are feeling right now. Given that every ERP system is extremely customized according to the need of the user organization, your ERP is very unique. Depending on how creative and strategy oriented you had been during the development process of your own ERP system, you can actually differentiate yourself either by adding value or by reducing cost. Most of the time ERP assumes the central position in the core business. Then why are companies such as SAP, Netsuite and others are developing cloud ERPs for medium and small businesses and why would companies avail a standardized ERP system? Let us solve that puzzle. 

Cloud EPR market is ruled by NetSuite at this point followed by SAP. The true ERP providers are listed below:

IMA conducted a survey that reveals how ready companies are to get into cloud ERP and here is the result (http://www.netsuiteblogs.com/blog/2011/11/the-ima-survey-issues-facing-erp.html):

The same survey also revealed the following data on evaluation criteria for choosing cloud ERP:

But why would any company want to move its existing ERP system to a cloud? The main reason are the scalability of cloud ERP and believe it or not better security prospect of using cloud ERP. (http://cloudcomputingtopics.com/2012/04/why-you-should-move-your-erp-into-the-cloud/).

By deploying the existing ERP to the cloud, a company can make it available to all the authenticated users inside or outside of the company and connect them through internet. In the traditional ERP model, most of the big organizations had to essentially construct and integrate the IT infrastructure of business partners such as suppliers and distributors from around the globe. In this extremely competitive global economy, organizations look for vendors and business partners in all corners of the world to bring down the cost of production. Though IT has been a great enabler in this effort by facilitating the flow of information among partners, it has become a significant cost for companies. Cloud ERP promises to break that barrier. 

Another obstacle of traditional ERP system has been its rigidity. Constructing an ERP system in costly and once an ERP system is in operation, its hard to change it. Since cloud ERPs enable interoperability and access, an organization can add and integrate additional and emergent functions to the system. In the same way, the business intelligent system can be connected to the cloud ERP now. 

SAP offers the following classes of cloud ERP currently (http://www.oracle.com/us/solutions/sap/database/sap-erp-cloud-352626.pdf)

SAP Business by design is for medium and small businesses and SAP on-demand-services cater to the large enterprises representing add-on features. 

SAP business suite is a construction toolkit for for developing an in-house SaaS ERP cloud stack.

Constructing ERP system is a capital intensive process. Small and medium businesses (SMBs) mostly lacked the necessary capital to avail an in-house traditional ERP system and thus has been unable to reduce the barriers of entry in many sectors. Cloud ERP essentially removes that barrier by proving on-demand services and by eliminating the capital expense for building an ERP infrastructure. Here is a video that would explain this phenomenon:

Cloud ERP market is in the extreme nascent state at this point. But experts believe that Microsoft, Oracle and other usual suspects with enter this market soon. The providers need to enhance the reliability, connectivity issues and interoperability among platforms from different countries to motivate users to avail cloud ERPs. Below is the Gartner hype cycle for cloud ERP (http://www.cloudcomputing-news.net/blog-hub/2012/jan/10/how-cloud-computing-and-erp-mobility-are-reordering-gartners-hype-cycle-for-erp/):

The market prediction of cloud ERP is promising but as you can see the enterprises are not quite ready to move to this particular cloud immediately (http://www.cloudcomputing-news.net/blog-hub/2012/apr/16/roundup-of-saas-erp-forecasts-and-market-estimates-2012/)

Let me finish this post by an interesting development in the cloud ERP sector. Groupon recently partnered with Netsuite to accommodate its global hyper growth. Watch the following video to find out the reasons behind Groupon's move:

Lets move on to Fin Cloud Now

This year IDC reported that the securities and investment will be the earliest adopters of cloud computing while banking industry may lag behind because of various regulations that shapes the industry.  (http://www.microsoft.com/en-us/news/download/features/2012/IDC_Cloud_jobs_White_Paper.pdf)
But most experts agree that financial services industry will be benefiting immensely from cloud computing.

Is such phenomenon evident in the market? Believe it or not, there exists a 'FinCloud Institute' (http://www.fincloudinstitute.org/) whose mission is " to provide research-based insights into how Cloud Computing strategies are being implemented by financial institutions.". Below is the picture of the institute itself:

Yes, you guessed it right! Cloud Computing is a welcomed term in the financial services world. Don't get me wrong! The industry is in the early stage of adoption and not all firms are moving their IT need to cloud yet. But the industry is intrigued by the possibilities that cloud promises and is evaluation the technology with great interest. 
The following diagram depicts the current breadth of cloud computing usage in the financial services industry:
 (http://www.wallstreetandtech.com/it-infrastructure/224200533?pgno=2)

The above diagram reveals an interesting fact to me. The current usage shows that Financial Services uses cloud computing for a wide range of applications including risk management, price modelling and valuation and wealth management applications. If you think about it, cloud computing is not so different compared to outsourcing from the perspective of risk. Companies have been reluctant to outsource processes that are strategic for the company and needs subjective decision making because they are hard to codify
("Getting Offsoring Right", Aron R. and Singh, J. V., Harvard Business Review, 2005, 83 (12), 135-143) While back-office operations and client report is easily codifiable, risk management and wealth management have traditionally not been outsourced with a few exceptions. The above diagram shows that while 12% of the companies uses cloud for risk management, 17% of the companies use cloud for back office operations. The numbers are not that different and may make cloud computing more relevant in the future because users are willing to move functions with more operational and structural risks to cloud.

The biggest enabler for financial services industry seems to be the scalability aspect followed by cost saving. Take a look at the following diagram: (http://www.wallstreetandtech.com/it-infrastructure/224200533?pgno=2)

In 2011, NYSE Technology revealed a plan to build a custom cloud for financial markets (http://meship.com/Blog/2011/06/01/nyse-builds-a-custom-cloud-for-financial-markets/) with EMC Corp. and VMware INC. This cloud aims to provide a platform that will aggregate exchanges, broker dealer and buy-side participants. The stakeholders will have access to historical market data and analysis. Such a strategy will look into reducing information assymetry among buyers, sellers, small firms and large firms and in the process will make the market more efficient and friction free. Below is a video that explains NYSE technologies focus:

Cloud computing promises to be a great enabler for trading services since it can make the trading process faster. Currently, trading technology operates on millisecond scale (http://www.bis.gov.uk/assets/foresight/docs/computer-trading/11-1222-dr3-technology-trends-in-financial-markets) . In other words, it takes milliseconds to a price data packet or r volume data packet from exchange to the traders' desk. By using proximity server and real time computing power, cloud computing promises to bring down the trading time to microsecond in the near future.

After the financial meltdown of 2008, the relevance of cloud computing has increased manifold for financial services industry. Especially the governance and compliance issues of financial services industry can be addressed by using cloud computing since the technology is a great aggregator and can make the idustry more transparent. There is ongoing research (http://www.iseing.org/emcis/emcis2010/Proceedings/Accepted%20Refereed%20Papers/C70.pdf) that uses service software engineering to lower the political, social and technical barriers and to build a global infrastructure for financial services.

Here is a video that explains how cloud computing can address specific needs for finance industry:

Some recent adoption stories of cloud computing in financial services industry can be found in the fincloud website (http://www.fincloudinstitute.org/). Recently  WePay hired the PCI-complaint cloud services of Layered Tech as an online payment platform. A consortium of eight regional banks chose Axletree to avail SaaS based SWIFT connectivity to increase security and reliability while decreasing cost of ownership. Confirmation.com developed a cloud based solution to prevent false information reporting an collusion in the financial services industry.

For me, the most interesting proposal so far has been how a cloud based iPad App can enable real time trading. Essentially cloud can provide fully interactive research tools and can stream charts news, data and real time data to mobile phones and iPads to increase the devices' trading capabilities. The cloud based app makes the interface of iPad and mobile phones much more simplistic and easy to use. Here is how it looks like (http://media.wiley.com/Lux/55/235955.image1.jpg)

  

Let me finish this post by discussing the security issue that prevents the financial industry to adopt cloud computing at a greater rate. Because of various regulations that are characteristics to the industry, the companies are extremely cautious about cloud computing. Since the technology is new and executives still lack the necessary knowledge to understand the technology, they are comprehensive about it. But with time, executives are converging towards the consensus that they have been using third parties for a long time for many of their operations and business functions and cloud computing actually is less risky than a third patry who is located offshore. Such a realization will bring down the resistance in the financial services industry towards cloud computing. With this comment, I will finish this post and let you watch the following video that explains the current state of readiness of financial industry towards cloud computing:

Helix Nebula: Its a Science Cloud!

By now, you must have understood that in this post I will be covering the applicability of cloud computing phenomenon in basic scientific research and development. We are talking about connecting the dots between a technology that offers unlimited computing power and the science community who generate, analyze and integrate an unfathomable amount of data. Its a natural fit! But there exist some other benefits of cloud computing that are extremely appealing to the researchers in various fields of science. Lets start with the Helix Nebula, the latest initiative to build an European cloud for scientific research, then move on to some more specific science clouds such as cloud for material science, cloud for life sciences etc.

In this blog, you have seen several characteristics of cloud computing and the most attractive one for various industries is the on-demand-service (http://csrc.nist.gov/publications/nistpubs/800-145/SP800-145.pdf) that essentially enables businesses to reduce their IT infrastructure cost. But for scientific community, the resource pooling and rapid elasticity (http://csrc.nist.gov/publications/nistpubs/800-145/SP800-145.pdf) aspects of cloud computing are the biggest enablers. These two aspects together render unlimited computing power and an extremely efficient and transparent collaboration platform.  Watch the following video that explains why such aspects are attractive to the researchers and scientists:

The European Organization for Nuclear Research, famously know as CERN, is the home of the large Hadron collider that empower high energy physics research. On March 12, 2012, CERN  announced (http://press.web.cern.ch/press/pressreleases/releases2012/PR03.12E.html) that  it will collaborate with European Molecular Biology Laboratory (EMBL), European Space Agency (ESA) and a consortium of leading IT providers to launch the "Helix Nebula-the Science Cloud" that will host the massive IT requirement of European Science community and later will be available to industries and various governments institutions. You have to remember, that CERN's grid computing facility is considered to be able to handle extremely high volume data. Here is a video that explains CERN's current computing capabilities:

So why do they need Helix Nebula? Lets look at some numbers. CERN  produces 6 GB of data per second, keeps 150,000 CPUs continuously busy and stores 15 petabytes of data per year. (http://gigaom.com/cloud/super-science-cloud-coming-to-europe/). The scientific community is extremely data intensive and has an insatiable hunger for computer power and storage. This enormous volume of data needs to be analyzed in different ways by different data mining processes to extract valuable an logical information. Helix Nebula will be used by EMBL to simplify the analysis of large genomes and the European Space Agency will use Helix Nebula to study earthquakes and volcanoes. Companies such as Atos, Capegemini, Cloud Sigma, Logica, SAP etc will be the commercial partners in the Helix Nebula Project. The official report on the strategic planning process is available here: (http://cdsweb.cern.ch/record/1374172/files/CERN-OPEN-2011-036.pdf)

Researchers in University of Washington (http://arxiv.org/ftp/arxiv/papers/1110/1110.0543.pdf) are trying to develop a Science Cloud Computing (SCC) platform that will provide simulation capabilities specific for Material Science, Condensed Matter Physics and Quantum Mechanics. This platform can be used in Amazon EC2 and consists of a virtual machine with UNIX operating system, material science codes and relevant interfacing tools. Thus this cloud will be able to generate simulations and solve the structure of novel materials just like local computer clusters that are being used currently. But the cloud will have more computing power, it will reduce the time to solve the structure and will be able to increase collaborative efforts among scientists. Here is sample simulation picture  that provides structural details of a superconductor(http://arxiv.org/ftp/arxiv/papers/1110/1110.0543.pdf).

Similar efforts can be observed to facilitate life sciences projects which also in extremely data intensive. Solving the sequence of a specific human genome and to facilitate virtualized and networked environment of R&D, Oracle will be offering a health sciences cloud in the near future. This cloud will be a automated continuum of practices and process (http://www.oracle.com/us/industries/life-sciences/oracle-health-sciences-cloud-wp-367168.pdf) and would look like the following:

Oracle recently released the following video as well:

IBM's life sciences cloud aims to facilitate the bacteria research:

It is evident that cloud computing is extremely relevant for scientific community because it has the scalability to accommodate unlimited volume of data, can provide faster and efficient data mining and analyzing capabilities and hence brings down the time to finish an experiment and facilitate collaboration on a standardized platform that can be accessed and used by researchers from all over the world in real time. The possibility that the cloud platform will enable integration of various fields of science to solve a problem in a virtual world where distance is not an obstacle anymore, is extremely attractive to the science community. I believe in the future we will see a lot of customized clouds for various fields of scientific research. Some of the pressing issues of current era such as food shortage, search for renewable alternative energy and finding novel materials for semiconductor production will find cloud computing to be a great enabler.