A Brief Guide To Cloud Computing Part II - Drivers & Inhibitors

In my last post on Cloud Computing I provided a brief introduction to what cloud computing was and promised that in my next post I would look at the inhibitors and drivers of cloud computing in an attempt to bring greater clarity to the subject.

As we all know there is no such thing as a free lunch and like most things in life Cloud Computing is a trade off. There are clear advantages to adopting the technology but at the moment there are a number of issues which are inhibiting its adoption. For organisations considering adopting these technologies it is a case of balancing these two sides of the equation.



Drivers

Lets first look at the drivers of cloud computing - the why would you do it question. The primary drivers for cloud computing are:

1. Financial


2. Speed of Deployment


3. Flexibility & Scalability


4. Focus on core competencies


5. Less deployment risk


6. Less IT Maintenance and
   upgrade activities


7. Easier Procurement

Financial

If you remember from previous posts one of the key characteristics of cloud computing was that it was multi-tenant and paid for on a pay as you-go basis. One of the benefits of this is that it leads to lower capital costs related to the cloud infrastructure and/or software. In fact the costs become purely operational and at pretty much any point you can withdraw or up/down scale the size of your cloud solution without any financial penalties or having to write off capital investments. A side affect of this is that the capital that is freed up can be used to accelerate other capital intensive initiatives in the wider organisation that might otherwise be possible. Clearly lower capital costs also lead to improved ROI and a shorter payback period.

Speed of Deployment

Cloud solutions can be deployed much faster than traditional IT solutions because the solutions tend to be standardised, based on pre-defined templates (that limits customisation) and make extensive use of technologies such as virtualisation.

Flexibility & Scalability

Following on from the previous point the speed of deployment benefit does not apply to just the initial deployment but also to scaling the solution up and down. Cloud based solutions are designed from the ground up to be immediately scalable in either direction, thus allowing organisations to rapidly react to daily, seasonal or yearly spikes in demand for computing power.
Focus on Core Competencies

By leveraging Cloud Computing to effectively outsource all or some IT functions organisation can focus on what they regard as the competencies that gives them competitive advantage.

Less Deployment Risk

Deploying cloud solutions is generally automated and largely taken care by the service provider thus lowering the deployment risk for IT organisations.

Less IT Maintenance and upgrade activities

As I've alluded to above by leveraging Cloud Computing organisations lessen the burden on themselves in relation to performing mundane IT maintenance activities. Upgrades are also taken care of by the service provider, for SaaS offerings often up to 4 times a year, thus freeing IT organisations from these sometimes complex tasks and avoiding the situation where an application becomes hopelessly out of date and requires a large and expensive upgrade at some point in the future.

Easier Procurement

Because Cloud Computing solutions do not require major up front capital investments the internal procurement process is made much easier as less approvals and reviews are usually required. This can be especially useful in getting pilot projects off the ground.

Inhibitors

Given the obvious benefits of Cloud Computing described above why isn't everyone vigorously adopting these new technologies. The answer to this question lies in the inhibitors I have listed below. These include:

1. Security & Compliance concerns


2. One size fits all approach


3. Required Mind shift in IT


4. Provider maturity and viability


5. Integration with on-premises applications

Security & Compliance concerns

This is probably the biggest inhibitor to wide scale adoption of cloud computing. Security is a particular concern for many organisations who fear that they will be exposed in a multi-tenant world with data located outside of the corporate firewall. It can be argued that these fears are overblown as the data centers operated by many of the cloud service providers have very robust security features (including SAS70, SOX, HIPPA and PCI compliance) and that the data centers offer security capabilities in excess of those in place in many using organisations.

Regulation presents another problem, particularly in the public sector. In many countries data privacy and other regulations stipulate that certain data (e.g. related to a citizen) may not reside outside the country. This can be a very real inhibitor for many organisations, though vendors are beginning to offer solutions that either guarantee data is located in a particular country or group of countries or which offer a hybrid model which combines the cloud with hosted data solutions.

One Size Fits All Approach

Cloud solutions, particularly SaaS solutions, provided facilities to enable customers to customise their solutions, however these are limited and will usually mean that organisations need to make compromises or change their business processes in order to integrate the solution into their business. While an inhibitor, this does have an upside from a maintainability and cost perspective.

Required Mind shift in IT

This inhibitor is probably the least understood as it is people related. The introduction of cloud computing into an IT organisation introduces change and requires a mind shift from those in the IT organisation. When fully implemented, Cloud Computing moves the focus away from operational activities and more towards visioning, service provisioning and relationship management. This implies changes both for how the organisations is structured and for the individuals within the organisation. Job roles will change, new skills will be required, process will need to change and quite possibly the size of the IT organisation will most likely shrink.

Provider maturity and viability

Cloud Computing is still an emerging and fast moving technology. Cloud Service providers are emerging all the time and even some of the more established vendors are no more than 10 years old. This makes provider viability a concern particularly in a market where consolidation is likely over the coming years. However many established vendors from the traditional IT arena are now entering the market and with careful vendor assessment and due diligence the risk involved can be mitigated.

Integration with on-premises applications

In many cases it will be necessary to integrate on-premises (particularly legacy) applications with applications in the cloud. This involves integrating outside the firewall and over the Internet. There are a number of challenges related to this including interfaces protocols and security particularly where an existing application or system has not been exposed externally before. Ultimately it is unlikely that this will inhibit the adoption of a cloud computing solution, however it does add a degree of complexity.

In Summary

Ultimately each organisation must weigh up the risks versus the benefits of Cloud Computing for their particular organisation. However, it seems to me that Cloud Computing is here to stay and it is more a case of when rather than if organisations adopt these technologies.

In my next blog on Cloud Computing I will look in a bit more depth at Software As A Service and look at some of the sub categories of solution offerings such as CRM, ECM and Digitial Content Creation.