CIO Dashboard » You Aren’t Using a Cloud Platform

You Aren’t Using a Cloud Platform

post by Chris Curran on August 11, 2010

I’m pretty sure that in larger companies, aside from the internal use of virtual machines that are mis-labeled as cloud computing, the cloud wave is a wave of talk. Instead of telling us how they are using (or want to use) the cloud, many of our clients are still asking us to help them survey the market so that they can evaluate it as part of their overall sourcing approach and technology architecture.

One insurance CEO asked for a summary of the hype vs. reality as we see it. Here’s what I came up with. See what you think.

Service	Myth	Reality	3 Year Outlook
Storage	Unlimited, cheap storage eliminates need to buy new storage devices	Cloud storage not production ready out of the box - security, SLAs, lack of location transparency; some content distribution is used	Still primarily non-critical storage; some turnkey analytics services emerge; compliance and security still a concern
Processing	Just in time compute power can handle peak production loads	Offloading or balancing in-house processing to the cloud is a complex project in itself	Processing and platform services merge as “bare” processing capacity adds little enterprise value
Platform	Applications can be moved to the cloud easily to pre-configured software environments	Enterprise systems don’t use standard software “stacks“; few variations are available	.Net/Azure environments grow as more use Azure as primary development environment; several Java platform providers emerge
Applications	Industry applications can be implemented in the cloud with little capital outlay	Typical packaged software issues plus lower level of operational, security and SLA control, but lower capital outlay	More competitors in enterprise apps/ERP/CRM field; Much more office automation in the cloud; Some industry apps mature (ie Exigen/Insurance)

I think the story for the SMB segment is much different, in both the willingness to jump into the cloud and their speed in doing it. Stanton Jones, an SMB CIO, does a nice job summarizing the major vendors cloud offerings in email, office automation and other office apps. For larger firms, until the integration, operational control and security issues are tackled, SMB will lead the way

cc licensed flickr photo shared by mikebaird

jfbauer

Chris, good realistic view of cloud computing. Sure, the potential for cloud to provide strong new capabilities is there, but just like SOA was prior, it has classic challenges to overcome to achieve that level of value. Security is formidable just like in SOA.

In the Application 3 year outlook, you include ERP as a candidate for cloud use. From my growing knowledge of real world ERP deployments, very few have a “vanilla” ERP package. Some tweaks here, some custom code there, some changes to interface with a warehouse management or distribution system and you have an ERP platform that is a challenge to upgrade and maintain let alone pick up and move to the cloud. I am sure it can be done, but resources needed are already slim and tied up “keeping the lights on”. I’m not sure I would add ERP to the list myself in that time frame.
jfbauer

Chris, good realistic view of cloud computing. Sure, the potential for cloud to provide strong new capabilities is there, but just like SOA was prior, it has classic challenges to overcome to achieve that level of value. Security is formidable just like in SOA.

In the Application 3 year outlook, you include ERP as a candidate for cloud use. From my growing knowledge of real world ERP deployments, very few have a “vanilla” ERP package. Some tweaks here, some custom code there, some changes to interface with a warehouse management or distribution system and you have an ERP platform that is a challenge to upgrade and maintain let alone pick up and move to the cloud. I am sure it can be done, but resources needed are already slim and tied up “keeping the lights on”. I’m not sure I would add ERP to the list myself in that time frame.
John Henry Bonham

Per @jafbauer’s comment re ERP solutions on the cloud, Lawson are already offering this service: http://www.lawson.com/wcw.nsf/pub/new_4B31DD
John Henry Bonham

Per @jafbauer’s comment re ERP solutions on the cloud, Lawson are already offering this service: http://www.lawson.com/wcw.nsf/pub/new_4B31DD
Stanton Jones

Chris: thanks for the mention. Fully agree with you here - I believe we’re going to see a significant percentage of small to mid-sized companies moving collaboration, storage and line of business apps to the public cloud over the next three to five years.

Another yet untapped cloud-related opportunity for the SMB: the PC. We’re going to start to see an influx of “packaged” offerings from many of the Virtual Desktop Infrastructure (VDI) vendors, whereby small to mid-sized organizations get their desktop(s) from the cloud. This technology exists today, but CIOs have to buy it, rack it and manage it themselves. Soon, mid-market tech leaders will be in a position to buy a desktop seat in the same way they can today with a BPOS SharePoint seat or Google Apps account - with their credit card.
Stanton Jones

Chris: thanks for the mention. Fully agree with you here - I believe we’re going to see a significant percentage of small to mid-sized companies moving collaboration, storage and line of business apps to the public cloud over the next three to five years.

Another yet untapped cloud-related opportunity for the SMB: the PC. We’re going to start to see an influx of “packaged” offerings from many of the Virtual Desktop Infrastructure (VDI) vendors, whereby small to mid-sized organizations get their desktop(s) from the cloud. This technology exists today, but CIOs have to buy it, rack it and manage it themselves. Soon, mid-market tech leaders will be in a position to buy a desktop seat in the same way they can today with a BPOS SharePoint seat or Google Apps account - with their credit card.
business phone service

I’ve been doing a lot of research and have come across several of these myths, and I knew that they really didn’t make a whole lot of sense. All seemed a little pie-in-the-sky if you ask me. Thanks for clearing things up!
business phone service

I’ve been doing a lot of research and have come across several of these myths, and I knew that they really didn’t make a whole lot of sense. All seemed a little pie-in-the-sky if you ask me. Thanks for clearing things up!
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Leo de Sousa

Chris,

A couple of other factors to consider. Typical software license agreements don’t readily move to a cloud platform as they are per processor of per core based. This is a significant barrier that needs to be addressed.

The second issue we encounter is government policy and laws. In British Columbia, Canada we have provincial law that forbids storing Personal Identifiable Information outside of Canada. Canada is only 1/10 of the US market so the availability of Canadian cloud services is significantly limited.

Thanks for the post, Leo