IBM’s aggressive push in the emerging private cloud market isn’t just for IBM customers – Big Blue is building several private cloud services within its own firewall, CIO Mark Hennessy says.

Hennessy, the IBM CIO since July 2007, said he’s not ready to adopt public cloud services such as Amazon or Salesforce.com in any major way, but that private clouds are helping IBM deliver development and research tools to employees in a more efficient manner.

Public clouds raise questions about “availability risk, data security risk, regulatory compliance and corporate governance,” Hennessy said in an interview this week.

“If we can utilise those cloud technologies inside our firewall, we kind of get the best of both worlds. We get the efficiency and productivity advantages of cloud technology,” he said. “We have many workloads we would be uncomfortable running in a public environment.”

IBM uses the private cloud model for its Technology Adoption Program, a four-year-old service that’s an “online sandbox where developers and process owners can try out new tools and techniques,” Hennessy noted.

About 10 months ago, IBM launched a private cloud that lets researchers build out and provision their own stacks, and has been used to the tune of 640,000 compute hours, Hennessy continued. And now IBM is building out a new test and development cloud.

“We will use this cloud for all the development and test for our internal systems,” he said.

The phrase private cloud means different things to various observers, but in general cloud networks aggregate servers, storage, and networking into large, shared computing pools, and rely on virtualisation and automation tools to quickly provision new services to end users.

IBM and many other vendors claim they can provide CIOs the tools to build their own clouds. For example, grid vendor Platform Computing just announced software that takes existing hardware and creates shared pools of physical and virtual resources, giving IT administrators a single pane of glass from which to manage and deploy services.

Giving developers and other users the ability to self-provision their own resources has improved productivity at IBM, and the whole cloud model increases energy efficiency, Hennessy said. Although IBM relies mainly on the private cloud model for its own users, Hennessy said a mixture of public and private clouds will be beneficial for enterprises in general.

“I think cloud technology is going to be a really positive development for enterprises and end users,” he says.

“It is a highly virtualised, highly scalable, highly energy efficient infrastructure. They can utilize automated provisioning to provide services to end users. And it’s been very well utilized in the public space with Salesforce.com and Amazon, and even our own LotusLive.”

IBM’s current approach is to build out several private clouds for different purposes, rather than one giant cloud for all workloads, but “over time many of them will probably converge,” Hennessy says.

Public cloud services generally fall into three categories: software-as-a-service for business applications, infrastructure offerings that provide virtual servers and storage capacity, and platform-as-a-service tools that help developers build and deploy Web applications on a hosted infrastructure.

Enterprises face potentially difficult decisions about which workloads are appropriate for public clouds, Hennessy said.

“There’s going to be a set of workloads that are appropriate for public cloud utilization. There’s going to be another set of workloads that enterprises will probably want to run inside their own firewall,” he said. “We wouldn’t want to be running a workload with sensitive and personal information in a public environment. Banks wouldn’t want to do it because of the regulatory compliance issues they have. There will be plenty of examples where you want to run things inside your own enterprise.”

Cloud computing isn’t the only initiative IBM is undertaking internally to improve IT efficiency. IBM consolidated 155 datacentres down to just five, a process that was completed two years ago, and Big Blue is continuing to ramp up use of virtualisation. “We’re now virtualizing over 1,000 systems a year on lots of different platforms,” Hennessy said.

IBM has also spent most of the past decade consolidating applications, going from about 15,000 to 4,500 company-wide, and is continuing to retire another 30 applications each month. IBM is still identifying applications that overlap with each other, and also applications that could be phased out because they are limited to a small group of users.

“4,500 are probably still too many for us,” Hennessy said. “I do believe we can continue to sunset applications.”