Amazon Web Services VP Adam Selipsky.

FedRAMP, which stands for the Federal Risk and Authorization Management Program, “is a U.S. government-wide standardized approach to security assessment, authorization and monitoring,” said Adam Selipsky, VP of AWS. If a service gets certified by FedRAMP for use by one agency, it will be easier for other government organizations to adopt it as well, he said.

In government parlance, Amazon now has a three-year “Authority to Operate,” or ATO. That certifies that a range of government data can be stored or processed on Amazon infrastructure. Companies seeking FedRAMP certification typically work with a sponsor agency, which in Amazon’s case was the Department of Health and Human Services.

HHS has used AWS to run for the Centers of Disease Control’s BioSense program for tracking health problems in the U.S. and for the National Database for Autism Research. 

FedRAMP blessing greases the skids for more government use

AWS now has both a FISMA (Federal Information Security Management Act) Moderate and a FedRAMP Moderate ranking.The latter designation means that ”sensitive data” can be stored and managed on AWS infrastructure.

“This is a journey, a sliding scale. Sensitive data is a term of art used in government. Even more top secret categories of data require additional certifications,” Selipsky said.

To date, exactly one cloud provider — Autonomic Resources, a small North Carolina company — had earned the FedRAMP seal of approval from the General Services Administration. Now AWS is in the mix, but the two companies won’t have the arena to themselves for very long. Up to 15 providers are expected to clear FedRAMP hurdles this year with double that number expected to do so in 2014 when FedRAMP certification becomes mandatory, according to Federal Computer Week,

AWS is the kingpin in public cloud infrastructure where it’s had a 6 year head start. But now enterprise-focused rivals — VMware will announce its AWS response on Tuesday, HP and Rackspace have rolled out their own public clouds. An early FedRAMP certification which should make government IT types feel better about deploying work on AWS, may well be another early-mover advantage.

Amazon CTO Werner Vogels may well talk about the importance of public sector workloads when he speaks at GigaOM Structure next month in San Francisco.

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Nnamdi Orakwue, VP of Dell Cloud

The company’s first public cloud partners are Joyent, ScaleMatrix and ZeroLag. The rationale: Dell customers don’t want to be locked into a single cloud vendor and would like assurances that workloads can be moved as needed if their requirements change or their current cloud is not up to snuff. ZeroLag gives Dell a VMware-based cloud option.

There are two takeaways from the news, Nnamdi Orakwue, VP of Dell Cloud, said in an interview on Monday. “First, private cloud success is our bread and butter there our top priority on the open-source side is OpenStack. The second is multi-cloud management and helping our customers deal with it via Enstratius.” The Enstratius management offering supports more than 20 different clouds.

Orakwue acknowledged that Dell’s cloud strategy has been a work in progress. Late last year, the company said its public cloud would be based on OpenStack and would come out a year later than expected. Today’s news changes that.

Dell may add other cloud partners to the mix later and could take an equity stake in some of them. (GigaOM’s Derrick Harris wrote in 2011 that Joyent would be a smart investment for Dell if it’s serious about the cloud biz.)

On the one hand, Orakwue said Dell will be “platform agnostic,” on the other he said OpenStack is clearly its platform of choice on the private cloud side. You have to wonder if that’s a consolation prize for the OpenStack faithful.

Things are heating up on the public cloud front for sure. VMware is expected to re-announce its public cloud platform – which will run in as-yet-unnamed partner data centers — on Tuesday and the whole topic of public, private and hybrid cloud deployments will doubtless come up at GigaOM’s Structure event in San Francisco next month.

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“Every story I read about Google is us versus some other company or some stupid thing. Being negative is not how we make progress. The most important things are not zero sum.” Page said Google struggles “with people like Microsoft,” he said. As for Oracle, which is suing Google over Android’s use of Java, Google has “a difficult relationship with Oracle, including having to appear in court … Money is obviously more important to them than any collaboration.”

In comments emailed to CIO.com, Microsoft responded:

“It’s ironic that Larry is lending his voice to the discussion of interoperability considering his company’s decision — today — to file a cease and desist order to remove the YouTube app from Windows Phone, let alone the recent decision to make it more difficult for our customers to connect their Gmail accounts to their Windows experience.”

Page’s words came a few days after Microsoft announced interoperability between its Outlook.com email service and Gmail and just after word came out that Google demanded that Microsoft rip its home-built YouTube app from the Windows store (and remove the app off the Windows Phones that were already running it.) So, who’s the winner in this melee? Neither vendor comes out looking good. For Microsoft to complain about Google’s business practices is laughable given its own track record. But for Google to claim it’s not evil while restricting consumer choice is also awful. Consumers might just say a pox on both their houses.

IBM spreads Watson around …

Watson, the natural-language-understanding software that played (and won) at Jeopardy, will be made more broadly available to third-party software makers, IBM CEO Ginny Rometty said last week. Thus Watson technology could be used perhaps even by IBM competitors, to build self-teaching computer systems, according to Bloomberg News. IBM has made the most possible PR use of Watson capabilities, working to embed that intelligence in medical and other applications. Last week, IBM took its show on the road to Washington D.C. last week to show Congress the progress Watson has made in healthcare applications.

… as SAP doubles down on HANA

German enterprise software giant SAP, in a move you could see coming miles away, said this week that HANA, it’s in-memory analytical database, will be the brains of its ERP software going forward, according to InformationWeek and other  outlets. Running do-or-die ERP and CRM applications on HANA is a big step up from data warehouses because ERP and CRM cannot go down for hours or a day without severe blowback. And yet at the annual SAPPHIRE conference last week SAP announced general availability of its core Business Suite applications on HANA. Or, as CRN put it, it “bet the farm” on HANA.

From around the interwebs:

Top 5 data center stories of the week, from Data Center Knowledge.

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Tableau, Marketo software IPOs soar to cloud from Business Recorder.

Windows 8 is an enterprise non-starter because IT sees no value in changes from ComputerWorld.

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The topic arose at the clouderati-filled Cloud 2020 meetup in Las Vegas last week (where someone suggested we’ll have a cloud duopoly of Amazon Web Services and Google) and it’s back in the public eye again this week with the general availability of Google Compute Engine. I think we might get an idea how the cloud computing market will play out by looking at the fast-food industry.

The analogy goes like this: Fast food restaurants offer their consumers essentially the same things as public clouds offer their customers – convenience, speed, standardization, flexibility and everything else that comes with not having to prepare a meal from scratch or deploy applications on physical gear. And if all anyone wanted was fast, cheap hamburgers, fries and maybe some sort of chicken sandwich, the more than 33,000 McDonald’s across the world would probably do the trick.

However, when I come to any major intersection in a big city (and even in some small towns), I usually see no less than two national fast food chains taking up corner real estate. If I drive a little down the road, I’ll likely see a few more, and possibly some regional chains thrown in, as well.

Not all hamburgers are created equal, it seems.

Why should cloud computing be any different? If all anyone wanted was a virtual server, they’d probably go with the omnipresent Amazon Web Services. But when features, price, security, network connectivity and related services come into play, it becomes easy to see why there’s such an appetite for more options.

Amazon is to McDonald’s as Google is to …

Amazon Web Services = McDonald’s and Yum Brands rolled into one: AWS is to the cloud what McDonald’s is to fast food. It was the first, it’s the biggest and it’s the best known. All things being equal, there would be no reason for anyone to go anywhere else for cloud computing because AWS delivers reasonable services at a fair price (sometimes downright cheap), is omnipresent and can pretty much handle whatever scale you throw at it.

Only, if we consider the virtual server the hamburger of public cloud, the object store the French fries and the cloud database a chicken sandwich, AWS starts to look like a lot more than just a McDonald’s. You might look at it more like Yum Brands, the parent company of Taco Bell, KFC and Pizza Hut. The Amazon platform is about far more than just machine images and some standard storage and database features. It has myriad services covering everything from configuration to big data, and they’re all designed to integrate tightly with one another — like one of those KFC/Taco Bell combination restaurants that dot the urban landscape.

AWS, like McDonald’s, is the undisputed champion. Source: Wikipedia Commons

Rackspace = Wendy’s: Wendy’s is the No. 2 fast-food franchise in the United States, a title I think Rackspace probably holds in the cloud space (although assessing cloud market share is a little more difficult than assessing fast-food market share). And much like Wendy’s places a premium on the quality of its products, Rackspace places a premium on the quality of its service. CEO Lanham Napier has gone so far as to say it’s “playing a different game” than Amazon.

What he means is that Rackspace doesn’t need to compete with AWS by constantly driving down prices because Rackspace customers value service and will pay for it. Maybe, but the company might take a hint from what’s happening with Wendy’s as it struggles to maintain its No. 2 status against a feisty Burger King that’s largely following the McDonald’s playbook. If market share is important, higher prices aren’t often the best recipe for maintaining it.

The Angry Whopper, like App Engine, probably isn’t for everyone.

Google = Burger King: That cloud version of Burger King nipping at Rackspace’s heels is Google. It already has all the standard fare in servers, storage and databases, but it’s also hipper than the rest (or at least it tries to be), it takes some chances on product design (sometimes to the love-it-or-hate-it extreme) and, like Burger King with the Whopper, what it does well, it does really well. In Google’s case, that’s perform at scale.

If Google keeps adding services and cutting the costs of everything, there’s no reason it can’t become the world’s No. 2 cloud provider — some have already bestowed that honor upon it — and maybe challenge AWS a decade down the road.

Microsoft = Arby’s: Despite Microsoft’s best efforts to market it otherwise, Windows Azure is still largely viewed as a cloud platform for running .NET applications and generally doing all things Windows. Not that that’s a bad thing — a lot of people really like Windows and, by many accounts, Windows Azure is a fine platform. It’s like going to Arby’s: the menu offers a lot of things, but you go for the roast beef.

Joyent, Virtustream, CloudSigma et al = In-N-Out Burger, Culvers, Five Guys et al: These cloud providers, like their analogous restaurant chains, are damn good at what they do and their patrons are loyal. They’re typically designed for maximum performance, maybe security, too, and will play around with new infrastructural or programming components in order to maintain their edge. They might even be the best at certain things and have some major customers (I’ve seen Maseratis leaving the In-N-Out drive-thru), but cost, geography or the desire to get a chicken sandwich, too, limit the number of users they can attract.

Yes, In-N-Out is delicious — and that’s about the entire menu.

VMware = Del Taco: According to my colleage Barb Darrow, VMware’s new VMware vCloud Hybrid Service will “be run from partner data centers and sold by VMware’s channel but managed by VMware.” Del Taco sounds like a Mexican place but also has hamburgers, fries, shakes and even iced coffee. And I don’t know anyone who eats there.

OpenStack = Frozen French fries, or cheeseburger-flavored Doritos: It really depends on who you ask (some would even say it’s like kale). If you’re grilling burgers and cooking fries, you’re essentially trying to recreate the fast-food experience at home. On the bright side, when you’re making the hamburger patties and cooking the fries, you can control how much salt you add and ensure everyone who handles them washes their hands. It might turn out great, but it’s never really the same.

Perhaps I’m being overly pessimistic, but I’m beginning to suspect that OpenStack-based public clouds (of the non-Rackspace( rax) variety) will end up being a lot like cheeseburger-flavored Doritos. In name, they’re like cheeseburgers, but after a few bites you’re left saying, “Hey, Doritos doesn’t make cheeseburgers …”

Everyone else = everyone else: Even after all this, we’re still left a bunch of different cloud providers and a bunch of different fast food chains. You might compare the telcos to Jack in the Box, Carl’s Jr. and Hardees in that they’re big and make money, but they’re pretty much non-factors in the grand scheme of things. Then there are your various web hosts and others, which might compare with some local chain restaurants. And different countries will certainly have their own cloud providers just like they have their own takes on fast food.

In the end, though, it’s just hard to see how cloud computing becomes a two-horse race any more than the fast-food industry is a two-horse race. Sure, there are three clear leaders (with No. 1 having a big lead), but there’s plenty of business to go around because aside from some core similarities, no two providers are the same. And as long as more applications are developed and need a cloud to call home, there will be developers and CIOs with very different ideas of what makes a cloud platform great.

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The Microsoft that produced the Windows-Office monopoly let its products get fat, dumb and happy. The Microsoft that must contend with the Oracle database juggernaut puts out a pretty good database. That’s why the sudden influx of new public cloud riches exemplified by this week’s official launch of the Google Compute Engine, coming a few weeks after Microsoft launched its Windows Azure IaaS options, may be tough on the competitors but could be very good for smart IT consumers.

Look for price cuts to continue, along with a flow of new services, and better APIs to access those services.

While I haven’t parsed the instance-by-instance price comparison between GCE and AWS, Google’s decision to sell compute instances in sub-hour increments could lead to cost savings vs. Amazon, which prices by the full hour. Don’t be surprised if Amazon responds, however.

We’ve already seen several price skirmishes in cloud including five or six price cuts in cloud storage in the span of a few weeks late last year between Google, AWS and Microsoft. Heck, even Rackspace, which touts its fanatical support rather than low prices, got into the act a little bit later.

Look for this sort of one-upsmanship (one-downsmanship?) to continue as these extremely well-funded and highly motivated competitors angle to get your workloads on their respective clouds. For the discerning IT buyer, whether she’s at a startup or a Fortune 100 company, that is only good news.

Photo courtesy of  Flickr user Official U.S. Navy Imagery

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The theory behind tools like these is basically this: sure, public cloud computing is billed as cheap, but too often it turns into a wasteland of dormant instances and other fallow resources. So as inexpensive as it can be, it’s not necessarily efficient or as cheap as it could be. Companies like Newvem, Cloudability, Cloudyn, CloudVertical et al say they can help you optimize all that and save more.

Newvem for Windows Azure covers many of the same core usage and cost metrics as the AWS version. A “heat map” helps users visualize their workloads as they move from on-premise implementations to the cloud, according to Newvem VP of marketing Cameron Peron. The free beta is available now to all Azure users. Newvem’s AWS version started out free as well, and a base level of capabilities remain free, but as of late last year, the company started charging for higher-level services.

Newvem said it sees Azure — which launched its AWS-like Infrastructure-as-a-Service  capabilities last month — gaining traction.

“The size of the Azure installed base is probably one of [Microsoft's] best-kept secrets,” Peron noted. Well, not that secret since Microsoft recently said Azure is a $1 billion-a-year business – a claim that some find difficult to swallow. Newvem would not comment when asked if Microsoft helped fund its Azure tool, but given that Microsoft wants to build the Azure ecosystem and compete better with AWS (as well as the spanking new Google Compute Engine), I’d say it’s a safe bet.

It’s also true that companies like Newvem, which built services around AWS, have been perplexed to see AWS adding richer and deeper monitoring and management services like Trusted Advisor. Given that, it makes sense that these companies offer multi-cloud capabilities.

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There are two primary reasons why, the first of which is obvious: Companies are tired of managing applications and infrastructure, so something that optimizes a common task using techniques they don’t know on servers they don’t have to manage is probably compelling. It’s called cloud computing.

The other reason is that the big part of big data really is important if you want to get a really clear picture of what’s happening in any given space. While no single end-user company can (or likely would) address search-engine optimization, for example, by building a massive store comprised of data from hundreds or thousands of companies as well as the entire web, a cloud service dedicated to that specific task can.

From web security to systems management, we’re already seeing how centralized data stores provide SaaS companies a broad view into what’s happening that can then be filtered down to serve each individual customer’s specific situation. BloomReach, a SaaS startup that helps companies optimize web-page content, is another good example of this principle in action.

How do you say, “cotton maxi dress”

Ideally, BloomReach Head of Marketing Joelle Kaufman told me, the company wants to help customers ensure they get found in web searches by making sure they’re not invisible (buried deep down), irrelevant (not saying anything meaningful on their sites) or incompatible (not speaking their consumers’ language). On Tuesday, the company announced a new feature called Continuous Quality Management, which lets customers continuously monitor their pages to ensure they’re still featuring the right products and the right terminology. It’s the latest addition to a seemingly useful service that’s built atop a big data foundation few — if any — of its customers would ever attempt to build themselves.

BloomReach is able to help companies optimize their sites because it’s constantly crawling the web in order to figure out how everyone else is describing their content, laying out their pages and structuring their links. Running on the Amazon Web Services cloud, BloomReach runs more than 1,000 Hadoop jobs a day that process about 5 terabytes of data and a billion data points about users’ site behavior. With the latter, co-founder and CTO Ashutosh Garg explained, the company is trying to figure out who’s visiting sites, what they’re doing, how long they’re spending there and how they’re related in terms of behavior.

“You need to have the right amount of data and from the right places before we can do anything with it,” he said. “… It’s a massive machine learning problem.”

When you consider all the possible ways something could be described or formatted, the scale of the problem becomes more evident. Simple semantic analysis like associating “desk” and “table” is easy, Garg explained, but what if some wants a lightweight camera and you only have its exact weight listed without any indication of how it compares to other options? What if people searching for “smartphones” really mean “Android phones,” but you’re top-loading your results with BlackBerry phones and Windows phones?

Another of Garg’s hypotheticals has to do with consumers’ presentation biases. If, for example, they’re looking at a lot of websites that look the same or focus on the same things (e.g., megapixels for digital cameras), they’ll expect to see the same things from every site.

10 nonillion possibilities: Choose 1.

From a sheer numbers perspective, things get even hairier when you’re trying to determine the relationship between any two pages in order to figure out the best path for links to to take. Garg said this is what computer scientists call an NP-complete problem, which means the amount of time it takes to process the results is exponentially greater than the amount of content you’re analyzing. So, for example, analyzing 40 pages doesn’t take 10 times as long as analyzing 4 pages, but more like 100 times longer.

Actually, BloomReach CEO Raj De Datta gave me another example of this problem when we spoke in early 2012. Here’s how I described it then:

[I]f a company wants to display just 1,000 products across 100 pages, De Datta explained, there are 10-to-the-28th-power (10 octillion) possibilities for how to do that. When it comes time to describe those products, there are 10-to-the-30th-power (10 nonillion) possibilities.

If a website has a million pages, Garg said, “it will take you longer than the life of the universe to solve that problem.”

Where this type of problem arises, BloomReach turns to Monte Carlo simluations, a favorite technique of physicists and Wall Street quants. The method involves running lots of simulations over large data sets in order to determine approximate results in a reasonable time frame. (And if all this isn’t enough computer science and cloud infrastructure for you, I suggest attending our Structure conference in June, which features a who’s who list of speakers, including Google’s Jeff Dean, Facebook’s Jay Parikh and Netflix’s Adrian Cockroft.)

Different queries, different pages

Things get even trickier when you’re trying to change the content of web pages in real time as people are searching for things. This isn’t the best method for organic search, where pages need to stay pretty consistent with the indexed versions, but it can be ideal in situations such as paid search and mobile. There are millions of ways to segment buyers, Garg explained, and how accurately you assess their intent and display your content can make the all the difference. Whether someone is a new or repeat visitor often matters, as does whether someone is price-conscious (e.g., the query included “cheap”) or perhaps searching for a particular brand.

Source: BloomReach

Around the holidays, the company actually realized something interesting: The bounce rate on queries for things like “gifts for dad” or “gifts for co-workers” was pretty high, but so was the conversion rate. The time to conversion was relatively fast, as well. It turns out, Garg explained, that people don’t like to overthink certain gifts too much, so if something is presented in a visually appealing manner and is within their price range, they’ll buy.

But creating these types of models involves more than meets the eye. For all the talk about machine learning — and machines do a majority of the work for BloomReach — people also play a critical role. A person might know better than a machine whether something was likely purchased as gift, Garg explained, or they might spot the offensive content on the T-shirt the machine decided was ideal.

“Humans are really good at creativity, thinking through stuff,” he said.

Smart humans are also good at knowing when they’re overmatched, which is why SaaS is so valuable in the big data era. CMOs could try doing what BloomReach or similar companies such as DataPop are doing, or they could pay someone to do it much better. Guess which route the smart ones will take.

Feature image courtesy of Shutterstock user Andrea Danti.

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Just in time for Google I/O, Google will support the Debian Linux distribution in its Google Compute Engine, which is still in preview mode. From now on, Debian will be the “default image mode” for GCE, according to the Google AppEngine Blog. Google cited Debian’s improved handling of 32/64 bit compatibility as one reason for the move

According to the Thursday blog post:

“Today we’re adding Debian images for Google Compute Engine.  Debian, in collaboration with us, is providing images for both Debian 7.0 “wheezy” and the previous stable release, Debian 6.0 “squeeze.”   This support will make it easy for anyone using Debian today to migrate their workloads onto Compute Engine.”

A Google spokesperson told eWeek  that “customers will get a great experience having a Linux distribution that is maintained by the Debian community. Debian and derivatives thereof (such as Mint and Ubuntu) are among the most popular on the Internet, and Google itself is a heavy contributor to the Debian code base. We will also continue to offer CentOS, and are actively exploring other operating system options based on feedback from our customers.”

Google has a complicated relationship with the open source world. Most of its underpinnings are built on open source software and it does contribute a lot of technology to the community. But its own infrastructure is seen as a black box to many in that community. It’s interesting that there were a grand total of two comments as of Sunday on this blog post — one was removed and the other offered good wishes but added “the thing I’d like to see in future is how community members could be part of this project.”

While Google isn’t saying, folks expect the company will announce general availability of Google Compute Engine, which will compete with Amazon Web Services this week at the big show. GCE was announced last June and the preview was expanded to anyone paying for Gold support last month. Many cloud watchers say GCE, once fully available, will be the second-largest IaaS in terms of capacity after Amazon Web Services or AWS. Microsoft launched its Windows Azure IaaS capabilities in April.

In other words, buckle up, the cloud wars we’ve seen so far, are going to get rougher.

New tool allows AWS management from Microsoft consoles

Speaking of AWS and Microsoft, the new AWS Management Pack for Microsoft System Center means that a Windows admin at a company — at least one running System Center 2012 — can now use one console to monitor on-premises Windows resources as well as EC2 Linux or Windows instances, Elastic Load Balancing, CloudFormation and Elastic Beanstalk running on AWS.

As GigaOM PRO analyst Janakiram MSV pointed out in his report Thursday, this move is just one more example of Amazon’s push into the enterprise where  Windows reigns.  He points out that Tom Rizzo, a Microsoft vet, headed up this project at Amazon. Janakiram wrote:

“In 2010, Microsoft launched the Management Pack for Windows Azure deployments making it easier to manage on-premise and cloud infrastructure. Customers running Windows-based workloads on Amazon EC2 had to use a different set of tools based on Amazon CloudWatch, Nagios, OpsView, Nimsoft or other third-party software to monitor their deployments.  Through the AWS Management Pack, Amazon made it easy for enterprise IT teams to manage the servers running within on-premise, Windows Azure and AWS. Microsoft enterprise customers will welcome this.”

Interestingly Rizzo’s AWS blog post does not mention that the console was part of a joint effort with Microsoft, something that Microsoft rectified in it’s post about the news a day later.

Adobe tests the market for all-cloud delivery

Well, my  post on Adobe’s plan to move all updates of Creative Suite to a subscription service characterized it as a low-risk gamble. For Adobe anyway. Well, gauging by reader response,I should have talked to more graphic designers and artists who are fighting mad. Many vowed to stick with their old version as long as possible and then seek other non-Adobe options. Their beef? That even $50 per month per user will end up costing them way more than the current pay-once-use-forever model.

A Change.org petition asking Adobe to rethink its plan had more than 8,500 signatories as of Sunday morning

At any rate, Microsoft ,which has more at stake here than anyone with its zillions of Office users, was quick to weigh in. In short, it says subscription SaaS is the way of the future because it ensures users are always on the latest-and-greatest versions and can use their subscriptions across devices.  But:

” … unlike Adobe, we think people’s shift from packaged software to subscription services will take time. Within a decade, we think everyone will choose to subscribe because the benefits are undeniable. In the meantime, we are committed to offering choice–premier software sold as a package and powerful services sold as a subscription.”

News from around the web:

From Data Center Knowledge: Equinix unveils new crown jewel Ashburn Campus

From GigaOM: Box acquires Crocadoc to make document previews richer

From CITEworld: Office web apps: Not bad for free, but on demand is way better

From TechCrunch:  Microsoft to fold Yammer sales team into Office 365, identity surfaces as a core focus

From GigaOM:  Laggard Rackspace growth sparks concerns: is there enough cloud growth to go around?

From Fox Business News; U.S. judge orders Hewlett-Packard to face shareholder lawsuit

From InformationWeek: Google I/O preview

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The cloud technology providers are banking that these legacy players have tried to build their own cloud services and realized that it’s easier and more productive to base those services on a cloud expert’s technology. So they’re rolling out bundles and packages tailored for that constituency.

Case in point: On Wednesday Tier 3  announced the “Reseller Edition” of its Enterprise Cloud Services.  The Bellevue, Wash.-based company built its own management, controls and services atop VMware vSsphere and packaged all that up for third-party providers from VARs to  telcos.

And Thursday, Dell and OnApp announced joint offerings that are pre-tested to enable service providers, MSPs and telcos ro roll out cloud services as fast as possible.Last month, Rackspace pitched its own cloud infrastructure as a short cut for telcos, MSPS – the usual suspects — to build their own clouds.

Pivotal CEO Paul Maritz has repeatedly used wireless carriers as a key target market for the big data-oriented cloud platform his company is building.

So if carriers are gearing up to build clouds atop third-party IP, why is it happening now versus say, six or nine months ago? Tier 3 CEO Jared Wray thinks it’s because they see the market maturing. “Before recently it just wasn’t defined and there wasn’t a huge de facto open source initiative going on,” Wray said. Now, with OpenStack, in particular, that has happened.

“OpenStack has the fanfare and momentum, so the telcos see a defined, evolved ecosystem and it’s looking like they understand what the key components are,” Wray said. “The idea now is to use the colos and wires they already have and layer value added services atop all that.”

Wray attended last month’s OpenStack Summit to see for himself. As to whether Tier 3 will add OpenStack support he was noncommittal.

This is, of course, all very self-interested by these cloud providers to say. But there is evidence that hosting companies, data center providers and telcos really are getting pressure from their customers for the sorts of cloud services that come from Amazon Web Services and others, said Carl Brooks, cloud analyst at The 451 Group.

To be fair, not all the old line companies have given up on building their own technology for the cloud era. Thirty-year old MetaSwitch is open sourcing it’s new IMS core software to ease cloud development.

But whoever’s technology ends up in the mix, as raw connectivity and compute get ever more commoditized, the secret to profitability — and happy customers — is truly useful services and cloud seems the deployment model of choice.

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Think about how many other cloud database services, platform-as-a-service offerings and — if you can count that high — software-as-a-service applications have launched in the past few years. If the 75-percent-of-all-startups-fail statistic applies equally to cloud computing as it does to other sectors,  we’re about to see a lot more sad emails to users warning them to move their data or find a new provider within the next month.

It sucks to think of adopting a new, presumably useful service as a significant risk, but that’s exactly what is if your data is trapped in some proprietary format or can’t be easily exported. The tide may be turning, though.

We can’t recreate cloud services, but maybe we can extend their lives

According to Mike Driscoll, founder and CEO of cloud-based analytics service Metamarkets (see disclosure), one of the major problems with cloud services is today is that they’re just not designed to be easily replicated. This creates problems when customers — particularly large enterprises — approach cloud providers with contractual conditions that harken back to the era of actual on-premises software. Essentially, they want the cloud version of a software escrow account that would place the service’s source code with a trusted third party and, should the company cease operations, would allow the customer to keep running the service on its own infrastructure.

For now, the response has been to push back on those requests because it wouldn’t really be possible to run the service anywhere other than where it’s currently running. Driscoll said many SaaS applications today — his own included — are “fairly monolithic in the way they’re architected,” which means there’s a strong dependency between the applications and the cloud operating system on which they’re running. He thinks it’s possible that hybrid cloud deployments could help solve the problem (e.g., what OpenStack, Cloud Foundry and Amazon-Eucalyptus theoretically would allow for), but that a feasible hybrid model is probably a few years out.

However, services like Metamarkets, also require a centralized data model (a la Bloomberg terminals) so much of the value is lost if customers all run their own versions on their own servers. For situations like this, he’s heard it proposed that service providers could put cash rather than software into an escrow account, and the cash would pay for a skeleton crew to manage the service for a year, let’s say, so customers would have ample time to find an alternative.

A screenshot of the Metamarkets service

Until things some of these mitigation strategies get figured out, it’s probably more of the status quo for cloud adoption. Small businesses will likely assume more risk and rely heavily on cloud services, while larger companies will use them for non-mission-critical applications or when they’ve received adequate assurances of security and stability. “When you’re GE or JPMorgan,” Driscoll said, “you’re never going to create a dependency on any application that can just get unplugged.”

How insurable are you and your cloud provider?

Maybe the answer is to adopt but protect. I used Xeround’s closure as a reason to catch up with CloudInsure, a cloud-ratings firm that I first covered as it was just starting in 2011. The idea behind the company is to serve as an actuary for insurance providers that want to get into the business of insuring cloud computing customers like they previously have with managed hosting customers and general purchasers of IT equipment.

The way it works is by analyzing some 140 factors about both the user and the cloud provider(s) in order to assign a risk score. So, a high-risk user (e.g., one with highly regulated, very valuable data) might cost more to insure even though its cloud provider is rated as a very low risk. The inverse could be true, too, where a low-risk user could choose to deploy on a high-risk cloud service. Founder Drew Bartkiewicz said CloudInsure covers IaaS, PaaS and SaaS providers, and the financial stability of the provider is among the variables its models consider.

Depending on the insurance policy, insured companies would receive monetary remunerations to mitigate against an outage, breach or closure that required them to pay penalties to customers or regulators, or to move to another cloud provider. Insurance broker Lockton is already offering a cloud insurance product through the International Association of Cloud and Managed Service Providers, and has a partnership in place with CloudInsure, as well.

CloudInsure has solidified quite a bit since we last spoke, established some significant partnerships and, Bartkiewicz told me on Thursday, is about ready to make its service a lot more public.

The insurance model could prove to be a really big deal, especially if it helps smaller cloud providers gain a foothold that will allow them to flourish. Right now, a prudent CIO might decide to opt only for services from companies he assumes aren’t going anywhere — Amazon Web Services, Microsoft, IBM and the like — when insurance might make it a little easier to take a risk on something that might pay bigger dividends.

Besides, it’s not as if being part of a large vendor is always a sign of stability: VMware bought and then sold an app-development technology called WaveMaker in a two-year timeframe, but it just as easily could have killed the business rather than try to sell it. I have reached out to Amazon Web Services to discuss the circumstances under which it would ever consider terminating a service, but have not received a response.

The internet never* forgets

When you look at the topic of web service closures beyond business applications, you actually see just how perplexing and possibly problematic it is. Screenshots might exist of services such as Google Reader and Posterous, but myriad dependencies on other services might make them impossible to recreate even if you had the source code. Unique file formats and other development decisions could present problems for digital archivists trying to preserve the web in a way that’s accessible by future generations.

“This is a case where the internet is more forgetful than the things that came before it,” Driscoll quipped. “The internet never forgets, until it does — and then it forgets everything.”

Disclosure: Metamarkets is a portfolio company of True Ventures, which is also an investor in GigaOM. Om Malik is also a venture partner at True.

Feature image courtesy of Shutterstock user Tom Baker.

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