Are there Clouds on the Horizon?

Seldom in the history of IT marketing has there been such a tornado of hype as that which is currently to be found billowing around the term “cloud computing”. It appears as if every vendor with any product or solution to market is compelled to employ one of the terms “cloud”, “IaaS” (infrastructure as a service), “PaaS” (platform as a service) or plain, simple “SaaS” somewhere in the stories they promote.

With so much energy being expended marketing the term, it is worthwhile looking at what is actually happening in the real world. Several studies have shown us that actual deployment of any form of cloud solution is still confined to a relatively small number of organisations, with usage being higher in larger organisations rather than in small business. This is a matter of some concern to those calling themselves “cloud service providers”.

If everything to do with cloud computing is as wonderful as many vendors believe, what are the inhibitors holding back the active utilisation of such solutions in main stream organisations? Beyond the lack of clarity surrounding the term “cloud computing” and the normal fear, uncertainty and doubt attached to any new offering, I believe that potential customer concerns fall into four main areas. To be specific these are questions regarding security, quality of service, the question of data / vendor lock-in and, finally, the long term cost of such services.

Security of information, and potentially of the structure of business processes, will always be matters that merit acute study even when services are run in house. When organisations consider moving to services that reside entirely outside of their computer rooms and data centres they need significant reassurance that not only their staff will be able to access and change corporate data, but also that such data will be adequately backed up and otherwise protected.

There is also the question or where, geographically and geo-politically, corporate data will be held. Many nation states have strong restrictions on how and where certain data types must be held. Until cloud providers are able to demonstrate that their offerings more than adequately satisfy such legislative requirements there will be significant hurdles to overcome.

Another factor to consider, especially when looking at PaaS and IaaS offerings, concerns the nature of software licensing, who is responsible for what from a licensing perspective, and how any licensing issues can be monitored and managed effectively.

The concerns surrounding data and IP “escrow” are matters that merit serious consideration by anyone looking to use any form of cloud service. It is essential that client organisations have agreements that detail the processes to be used to return all corporate data and any embedded intellectual property held at the end of life of the service, whatever the cause. This is an area where few cloud suppliers have taken any pains to explain how these situations are handled and how any guarantees are to be enforced.

The next question, that few cloud service providers do much to publicise, concerns what, if any, guarantees they will meet when it comes to the quality of service they will deliver to customers. It can be difficult to get anything beyond a “best effort” agreement to be put into contracts and many questions asked by potential customers are met with references to past performance without offering any assurance of future service delivery. Such an approach is likely to clash with enterprise and smaller company demands for service quality, visibility and the corresponding drive for continuous improvement.

This just leaves the matter of cost. One of the great arguments put forward by cloud suppliers is that the have the benefits of ’economy of scale’ on their side and can therefore deliver services more cheaply than can often be achieved by in-house IT. However,our research highlights that the long term cost of service question is a major inhibitor to cloud adoption amongst both existing users of cloud services, frequently SaaS offerings, and those yet to take the leap. There is clearly a perception that cloud services have some way yet to go to be priced at levels acceptable to many organisations, for anything more than one-off engagements.

There are clearly many factors for cloud service providers and potential customers to address, both technically, in contract production and in market education. For what it is worth, I have stated on many occasions over the course of the last decade that I believe that slowly organisations will utilise an ever-expanding range of services that are sourced from outside the organisation itself. I still believe this to be so, but it is equally clear that cloud will not “take over” the market overnight. Instead usage will grow slowly, perhaps in many instances almost without being visible. Yes, there are process and technical challenges to be addressed but there is nothing insuperable to be overcome, perhaps apart from inertia and understanding. All the same, I would advise companies to move forward with their eyes wide open when it comes to what remains currently a relatively immature space.