The CIO's jargon busting blog has an excellent discussion of cloud computing a term that is bandied about and which came back into my conversations when I was working with a UK city council earlier this week. (We were discussing 'consumerization of IT', another phrase to go in the jargon buster). The CIOs discussion points out that:
Many of you are now realizing that you know more about cloud computing than you'd thought. If you're using a SaaS app in your enterprise, you're using "the cloud." If you run your personal life via Google tools, you're tapping into "the cloud.
In late 2008 CIO conducted a survey revealing that "despite security concerns, enterprises see real promise for flexibility and savings from the cloud."
However, according to an Economist article Cloudy with a Chance of Rain corporate customers, big and small, have not exactly rushed to embrace the new data-processing paradigm. The writer of the article suggests two reasons for this: security and adequate data destruction when a customer moves on. The 30 or so commentators on the article suggest more reasons including communication issues in dealing with off shored companies, the investment already made in hardware and the costs of changing, lack of regulation, potential service continuity issues, and lack of understanding of "the subtle nuances of the [cloud] technologies and how they are used."
In January 2010 Accenture published a report, Six Questions Executives Should Ask About Cloud Computing that helps executives towards making a cloud/no cloud decision (although as one person commenting on the Economist article pointed out "Cloud is not an all or nothing model, it's a component in the application portfolio.") The Accenture report lists six questions with answers about cloud computing:
1. What is it and how does it work?
2. What specific benefits can cloud computing bring to my organization?
3. Can I depend on clouds to save my organization money?
4. How will clouds affect the way my organization competes?
5. What risks must my organization manage?
6. What are my next steps?
- Ask hard questions and demand data-based analyses regarding cost savings.
- Establish a clear governance structure for cloud computing
- Keep cloud efforts on track
- Set the standards for success
- Provide the necessary support
- Buy cautiously appraise frequently
Some of the benefits of cloud computing that this report cites are:
Cloud computing lets companies bypass the expense and bother of buying, installing, operating, maintaining and upgrading the networks and computers found in data centers. Instead of licensing software, users tap into a service when it's needed for as long as it's needed. All that is required is a broadband Internet connection, and a phone or personal computer with a browser".
Clouds are well suited for sporadic, seasonal or temporary work, for finishing tasks at lightning speed and processing vast amounts of data, and for software development and testing
Cloud-based consumer applications like Facebook and iPhone applets are driving innovation
in unpredictable ways.
By using the speed, power and easy access of cloud applications, start-ups and established companies alike can attempt to seize first mover advantage in a new market, enter an adjacent
market or new region, and displace slower-moving, less innovative rivals.
Clouds can provide a competitive advantage so every strategist will need to understand when their current IT infrastructure becomes a competitive disadvantage.
Clouds can also help companies improve their efficiency and decision making, and make them more competitive and profitable.
For an established company which is buying and maintaining its own servers, data-storage units and network gear making the decision to go down the cloud route inevitably means changes to the design of their organization. I wonder how many are factoring this into the decision?