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Cloud Computing Concepts - Part 2 - Why Businesses Like it, and Why They Don't

By Andrew Pollack on 11/18/2008 at 05:27 PM EST

Why Business Likes It, and Why Not? I.T. Shops bring it on themselves

A move to Cloud Computing is a huge commitment for a business to take. When your applications and sometimes even your data isn’t stored, managed, and controlled by your own business you’re talking a huge risk that the provider of those things could disappear or have some major catastrophe. Why would any business take such a risk?

For those of us in the I.T. industry – those who consider themselves technology savvy, there would seem to be little benefit to moving to a cloud computing model. Our lack of understanding is almost the definition of that appeal to the business side and the end user side of the house however. To a business, a subscription based cloud computing model becomes a fixed cost to a controllable service. In many respects, the appeal is that they can bypass their own in house I.T. shops. These shops are seen as increasingly expensive, increasingly risky, and frankly difficult to manage or control. When the business side wants to argue for reduced budget, the I.T. side always has big, dire, scary reasons that nobody can argue with because nobody really understands. This constitutes a management threat, and it’s why the post of CIO was created in the first place. CEO’s are constantly feeling as though they can’t manage their I.T. departments well. The I.T. departments of a certain size seem to forget that the only reason they exist is to sell more or make more of whatever the business does. They become driven by their own project goals and not the business goals.

Taken this way, cloud computing picks up on the same threads as outsourcing I.T. departments attempted to do in the last big revolution. There is a belief that if the business can treat I.T. as a simple cost of doing business, and hire a company that specializes in managing I.T., that they can control costs and increase reliability. Has it worked out? For the most part, those firms that have outsourced I.T. departments haven’t ended up saving much money after all. Once ensconced, these outsourced firms suffer the same problems as the internal departments did, but are under less direct management control. Companies find themselves faced with the very expensive proposition of reacquiring their own I.T. departments. In some cases, they no longer even own the server hardware. They’re trapped again, just in a different way.

There are efficiencies to cloud computing

Done right, cloud computing appears to offer some great efficiency. A massive resource consolidation in terms of server hardware and a centralized management of security, backup, and development are two areas that could really benefit. Interoperability tends to increase in these environments, and when the applications are built well, users do like them. Ultimately, I think we’ll all be working in a heavily cloud computing driven marketplace. We’re not even close to ready yet, but in the long run, we will go that way more and more.

Cloud Computing Concepts

* For those who care, I've used Planet Lotus links for the jumps in the table above, because it lets me track the count. If that bothers anyone, you can use the regular views on this blog to navigate or use your RSS reader.

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re: Cloud Computing Concepts - Part 2 - Why Businesses Like it, and Why They Don'tBy Tom Franks on 11/21/2008 at 10:21 AM EST
Was there a "why they don't" in there, really?

You cited issues with outsourced IT shops, but it's a little different with
moving stuff to the cloud don't you think?

We looked at Google, and for basic mail, they were cheaper than our internal
costs. When you go through their a la carte menu of discovery, retention,
backups, etc. they grew to higher than our costs. Plus, even for a very large
company, you'd be small potatoes to Google. As they recently demonstrated, they
are occasionally subject to very large protracted outages, and large
corporations like having a local staff to beat with a stick to get results.

I agree that the cloud is only just beginning, but there's a lot of issues to
overcome at this point.

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