SIEMENS

If one had to pick a buzzword for the IT sector in 2010, it would be “cloud computing.” The cloud, which signifies the abstraction of IT infrastructure components such as computers, databases, and networks, is increasingly becoming a home for hardware and software. Many companies are now discovering what pioneers like Google and Amazon have been offering for years — cloud-based e-mail programs, storage capacity for photos and music, and computing capacity. These companies now market IT products and services on and through the network. Siemens too uses cloud computing for its businesses and customers, and a team at Siemens Corporate Technology (CT) has been addressing the topic at a special center of expertise since January 2011.

The term “cloud” originates from an early phase of the Internet. Back in 1960, American computer pioneer and artificial intelligence specialist John McCarthy made the following prediction: “We will someday access computing power the same way we obtain water or electricity today.” However, it wasn’t until the PC revolution and the advent of the Internet that the right conditions for the cloud were available. Things really began moving when Internet bookseller Amazon decided to modernize its data center following the bursting of the dot-com bubble. At that point, the company — like many others — discovered that only a fraction of its computing capacity was actually being used most of the time.

IT specialists at Amazon then decided to utilize emerging Web-service and virtualization technology to make the company’s IT resources available in a flexible and efficient manner. This worked out so well that the company then launched its own Amazon Web Services on the market, offering, among other things, computing capacity that could be rented at extremely short notice.

Different Clouds for Different Crowds. Experts distinguish between three forms of cloud computing. The first is known as “Software as a Service” (SaaS) — i.e. accessing software via the network. In this setup, programs are not stored on a customer’s computer but instead called up on an as-needed basis. For example, a heating company technician can use a tablet computer to access the latest maintenance program on site at any time. A company could also make print drivers available on the Web, thereby allowing smartphone users to print on the go. The second form of cloud computing is called “Infrastructure as a Service” (IaaS), which, as the name suggests, involves renting computing power in the form of virtual hardware — like the type of service Amazon offers. Finally, there’s “Platform as a Service” (PaaS). Here, customers can access common development and operating system platforms. Put simply, PaaS can be viewed as an operating system for an entire computer center that itself is also able to communicate with other computer centers.

Cloud-related hardware and software services don’t have to be distributed across the entire Web or be accessible to everyone. In other words, there are both “public clouds” and “private clouds” (see illustration below). The latter is a closed private network that uses the same technology as a public cloud, but for legal reasons only a certain group of customers may have access to it. The two architectures can be combined into a so-called hybrid cloud that allows the benefits of both to be exploited — more specifically, efficiency and worldwide accessibility on the one hand and the highest levels of security on the other. In cases where customer data needs to be processed in complex simulations, data storage can be handled by a private cloud while calculations are carried out in a public one.

“Put simply, cloud computing provides a business model for making IT services available via the network,” says Nils gentschen Felde, a computer scientist and network expert in the Munich Network Management Team at Ludwig- Maximilians-University in Munich. Dr. Gerald Käfer, an electrical engineer who is the director of the Siemens Cloud Computing Competence Center, says that what may sound mundane is actually a real innovation: “Cloud computing offers a new technological foundation for providing software as a service. It’s therefore possible that we will access IT services in the future as easily as we get electricity and water today — including billing on the basis of consumption.”

Siemens has brought together all of its cloud activities at its Competence Center so as to be able to advise individual company Sectors on which applications they might be able to offer cloud computing for. Conversely, the Center also communicates with strategic providers regarding what Siemens expects from future industrial cloud services as a customer. In addition, CT has a core team of cloud specialists who call in other Siemens experts when they are needed. “In a certain sense, we ourselves work in a cloud,” Käfer jokes. The benefit here, of course, is the ability to tap into a huge pool of resources and always remain up-to-date on the latest developments.

Remote Diagnostics. In the future, the most impressive examples of the advantages of cloud computing could be offered by medical image-processing applications and remote diagnostics. Here’s a scenario. Let’s say a patient is sent to a hospital because a doctor believes he or she may have a lung tumor. The patient is immediately given a CT scan. IT-based systems can then automatically process and evaluate the images, leading to an increased probability of a rapid and reliable diagnosis. Often, however, small hospitals do not have such systems because of their relatively high cost.

But in the future, physicians at such clinics may be able to purchase diagnostic systems as a cloud computing service. In this model, CT images are made anonymous and then sent in encrypted form to a Siemens service center, where they are evaluated automatically. The patient’s attending physician would then receive a diagnosis within a few minutes.

Welding robots in automotive plants are another example. PLM Software, a Siemens subsidiary with headquarters in Plano, Texas, offers a program for monitoring the quality of robot operations by continually recording and analyzing data on vehicle bodies and weld spots. The program generates a report that either confirms a robot’s — and thus the product’s — quality or informs the plant management that the robot needs to be serviced or replaced. However, the huge amount of data involved makes this type of monitoring extremely complex and expensive — which is why PLM Software has been working on a cloud-based solution for smaller production lines since the summer of 2010. The company has been working closely with Microsoft, whose Azure platform is being used for the system. “Companies can significantly reduce the cost of their own infrastructure and support if they opt for Windows Azure and take advantage of the opportunities offered by cloud computing,” says Sanjay Ravi, who is responsible for high-tech and electronics industries worldwide at Microsoft.

Embedding applications into the Web also makes it possible to continually update them. “Up until now, Siemens has maintained computer centers around the world to manage software distribution,” says Käfer. “This requires buildings, IT and data security infrastructures, and people to run and monitor everything. All of this ultimately costs a lot of money, and these costs are transferred to the customer.” Siemens is therefore now looking into possibilities for using cloud computing centers for its worldwide software distribution. In an initial pilot project with Microsoft computer centers, IT capacity is being rented only when a software update is actually needed.

This results in both lower costs and greater flexibility — which are among the key benefits offered by cloud computing. In this case, the benefit is enjoyed by both Siemens as the software provider and by its customers. Using the cloud for other applications such as X-ray image processing means that customers no longer have to purchase an expensive data processing infrastructure but instead only pay each time they need a patient diagnosis. Cloud solutions are also flexible — i.e. it makes no difference whether a clinic only needs one CT scan diagnosis on a single day or ten.

Reliable Security. One of the biggest technological challenges facing cloud computing involves keeping costs low even as services become more complex in the future. The fact that microchip performance might increase 500-fold over the next 20 years does nothing to solve the problem, since the chips will still need the infrastructure that allows them to communicate in order to ensure that their data is continually updated. “Even if you were able to store and process all the data in the world at a certain point in time on a smartphone, it still wouldn’t be enough,” says Käfer. That’s because up-to-date and globally available information is becoming more and more important, and such information requires a scalable and efficient infrastructure. It’s a little like cars and roads — even a Ferrari won’t get very far on a rough farm trail. The cloud can thus also be imagined as a type of road network that includes highways and refueling stations.

And what about security? Just how well protected are important company documents if they’re stored on the Web or on computers in a public cloud that more or less the whole world can potentially access? And what happens if they get lost — or if a server is hacked? “Above all, how can you guarantee data protection when you release sensitive data to third parties?” asks gentschen Felde, who is convinced that large companies are still hesitating to enter the cloud due to such data security concerns. “Security considerations usually bring together factors such as legal stipulations on data protection, adherence to domain standards, and technical security measures,” says Käfer.

A more difficult task, according to Käfer, involves meeting the data protection guidelines for service providers in the event that such firms manage the personal data of other companies, or if different types of certifications need to be carried out. Käfer believes it’s “good that there’s a lively debate on cloud computing security” because it increases awareness of the issue among both service providers and consumers. “That’s the only way essential evolutionary developments will be carried out,” he says. Legally speaking, similar security requirements already exist for diverse Web applications and for cloud computing. “Many companies have been outsourcing and offshoring for quite some time, and customers remain satisfied even though they’re not aware of it,” Käfer explains.

“Nevertheless, many companies will only use private clouds for their initial cloud computing because a lot of legal gray areas remain in the public cloud, and companies first need to gain the associated knowledge and experience,” Käfer says. However, he is convinced that current concerns won’t stop the trend.

Statistics on growth in the cloud computing sector indicate that Käfer’s prediction is correct. Although forecasts differ, analysts generally agree that cloud computing is heading for a boom. According to a study that was conducted by the Experton Group, revenues of €1.1 billion were generated with cloud computing in Germany alone in 2010, and this figure is expected to increase to more than €8 billion by 2015. The question that arises here is: Does cloud computing represent a technology leap similar to the one that occurred when PCs entered the working world? This, at least, is the prediction made by Achim Berg, former president of Microsoft Germany and now head of Microsoft’s global cell phone business. We’ll still have to wait some time to find out whether Berg’s prediction is right — at least until the current euphoria settles down. Still, Käfer is convinced that “cloud computing will permanently change the IT world, even if the trend might be given a new name three years down the line.”