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TechnologyMar 27, 2010

Get Your Head Out of the Cloud

Matt Allen

Low costs. Unlimited scalability. Constant availability. Quick and easy implementation. What’s not to like? Sound too good to be true? Well, you know how that ends…

Cloud computing is the buzzword du jour, conjuring images of worry-free profits and improbable ROI in the minds of many IT managers. And, hey, what’s not to like? Three big players in the IT world, Microsoft, Google, and Amazon, have all thrown their hats into the ring, heralding cloud computing as the next big thing. In fact, if one were to believe the hype, he or she might think that could computing will solve all problems, that it is the Holy Grail of IT.

“I don’t have to worry about servers, software licenses, or other capital costs,” says one.

“Disaster recovery? Taken care of!” says another.

A third manager piles on, “I won’t need a support staff anywhere near what I have now.”

“Think of all our savings! And, it’s so easy!”

Slow down there, Turbo… It is time to tap the brakes.

Cloud computing does indeed have benefits, within reason. The problem is all of hype surrounding it. It is starting to sound like ERP, and we all know where that went. For the sake of bringing the discussion down to earth, let us just agree that benefits exist and not discuss them here. Instead, let us discuss some areas of concern around cloud computing.

Scalability and Throughput

One of the largest selling points of the cloud is its scalability, or more specifically, subscribers do not have to worry about its scalability. For the subscriber, enough capacity will always be available to provide the throughput needed. Is that true? For example, take Amazon EC2’s recent problems. In January 2010, ping latency tests revealed increased latency in the network, seeming to indicate less throughput available for subscribers. Some will argue that this is just one of the natural bumps in the road for emerging technologies. Is it so hard to imagine a scenario in late autumn where retail subscribers to clouds might quickly need capacity that is not available? No doubt, there are mathematical algorithms that determine how many servers or processors are needed to support X number of subscribers, etc. It appears, at least in the EC2 example, that those algorithms need to be revisited. It is probably not an unsolvable problem, but it is something to keep in mind when considering a cloud solution.

Strategic Advantage

Perceptive CIOs see their purview as a strategic advantage for their companies. While not every process within an IT organization is a value driver, some can be. Take Business Intelligence, for example. Custom reporting solutions, data mining, forecasting processes, etc. can all differentiate a business from its competitors. If one retail chain is able to identify a customer segment previously under served, it can increase sales (and profits) by addressing that segment. Sophisticated statistical models are often used to identify these opportunities. Now, imagine that those models are sitting in the cloud, where everyone has access to them. What has that chain gained? Sure, it might be possible to find a provider who will customize solutions to that detail. Again, it is something to consider when you are thinking about the cloud.

Privacy laws/Data Security

It matters where data is stored. Bill Thompson argues in this BBC article that the location of servers does matter. Many countries do not allow the sensitive data stored on servers within their borders to cross those borders. Different standards exist in different global areas (see here). What happens when your data ends up in a country you never knew it would be? It is in the cloud. You should not care, right? Think again. Data privacy is complex. When you outsource your data management, you at least need to provide strict oversight of that data and that data management process. Your data is a strategic asset. Think twice before you outsource it.

Cloud computing may well indeed be the wave of the future. It does seem to have some promise. Do not get carried away, though, by the wave of hype. Instead, as you think about a cloud solution, think strategically.

  • What are your strategic advantages in your IT department?

  • What business processes and components would you rather your competitors not see?

  • What service level is necessary, especially during peak times? Can you accept less?

  • How important is your data to you? Is it really something you trust to someone else?

There might be room for a cloud solution, but come down to earth to think about it.