CIO’s aren’t ready for cloud computing….yet

Everyone is talking about cloud computing, cloud storage, in short “the cloud”. But what is going on? What is the cloud trend? How will organizations benefit from ‘it’?

Cloud computing is defined by wikipedia as folows:

is the delivery of computing as a service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a utility (like the electricity grid) over a network (typically the Internet).

Cloud computing can consist of one, two or three layers: Infrastructure, Platform and Software. Since cloud computing is often called together with As A Service, we have Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). Further divisions are made for cloud computing within organizations, so called Private Clouds and Public Clouds, where the services are hosted off premises. Major examples of the latter are Google AppEngine, Amazon WS, Microsoft Azure.

The ambiguity of CIO’s to dive into the cloud flow is easily understood, when we look at the main reasons:

1. Amortization: We’ve invested so much in our IT.

It’s true that most CIO’s and CTO’s see this as a major concern. Having spent millions of USD/EUR in computing power, workforce and all other IT cost, simply stepping on the cloud bandwagon is just hard to explain to your CFO. On the other hand, CFO’s know the definition of sunk costs also, meaning that spent money is less relevant for the future than recurring upcoming costs. In short: create a solid business case and make your CFO a stakeholder.

2. Privacy: My customer data in the cloud? Never..

Bringing private customer data to the cloud is not something companies are willing to do so easily. It’s an understandable reason, but security of all major cloud providers as nowadays almost (some claim at least) at enterprise level. Choosing the right cloud provider is a tedious job and should be done with a person with a very high level expertise and experience. Go for the big names (Amazon/Google/Microsoft/IBM to name few) if you’re uncertain. You never want to be contacted by your provider with mails like these

3. Performance: Scaling to high peaks instantly? Unpredictable..

Cloud computing is perfect for organizations having temporary high peaks in computing demands, without the need for creating an infrastructure that’s aligned with the high peaks upfront. In other words: when you’re creating your own infrastructure, you’ll go for (a bit below) the limit you need regarding performance and computing demands. Most of the time though, you’re expensive infrastructure will be operating way below the peak demand. But yet, you’re able to instantly scale in peak times to the high demands. CIO’s and CTO often question the ability to scale instantly to high peak levels with cloud providers. Numerous cases have proven that major players are able to scale (almost) instantly and are also able to scale down instantly. Since you only pay as you go, significant cost savings can be achieved.

4. Reputation: We’ve got a great reputation, what about my cloud provider?

Your company has created a perfect brand, accompanied with all internal communication and customer service procedures to maintain your reputation on a high level. You move all of your IT to a cloud provider. What impact does it have on your reputation? Is your company mail now ending up in the spam box of your recipient? It can be one cloud-customer, spoiling everything for many other cloud customers, when their mail abuse leads to IP blacklisting of the cloud provider. Major providers though have implemented numerous anti-spam services to make sure their customers are in a safe harbor.

Good readings for Cloud Computing are: The RADlab Berkeley Publication , noteworthy also, but a bit different is the Bessemer Cloud Computing Law(s)

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