Heads in the Cloud? Forecasting the future of enterprise IT

September 11, 2009

joe-baguley– Joe Baguley is Chief Technology Officer, Europe, for Quest Software. The opinions expressed are his own. –

‘Cloud computing’ essentially describes an approach whereby IT resources are provided as services via the internet.  Instead of purchasing physical servers, databases, middleware and applications separately, organisations will be able to order these services over the internet in ‘virtual’ form, as demand dictates.

In theory, cloud computing will deliver all the benefits but none of the financial costs and technical headaches associated with wholly-owned IT assets.  Consumption of computing power will be billed using a simple ‘utility’ model – a per-unit approach similar to that used by energy companies.

Whatever the wider economic environment, the recent stampede toward cloud computing has been startling.  As big players like Google and Microsoft jostle to position themselves as Cloud Service Providers (CSPs), so relative arrivistes like Amazon.com are also being increasingly seen as technology providers rather than mere retailers.  In this brave new world, the rationale goes, why shouldn’t buying computing power online be as straightforward as purchasing books or DVDs with a simple mouse click?

With such noise around this technology, it would appear that the future for cloud computing is assured.  Indeed, IDC predicts that the market for cloud computing will reach $42 billion by 2012.  Before we all get carried away with such astronomic forecasts, though, it’s worth considering some potential pitfalls.

Foremost amongst these is the question of cost – not to mention value.  Cloud computing certainly promises the potential for some significant efficiencies – but, when many organisations don’t even have an accurate picture of their IT costs today, how will companies know whether the cloud can save them money?  IT companies need to invest in helping customers understand their existing technology spend before they even start thinking about moving them into the cloud.

With so much hype around cloud computing, there is a danger that CIOs will feel pressurised into reshaping IT strategies around a technology that may not be the most cost-effective solution for their organisation.  Providing accurate financial ‘dashboarding’ on internal IT efficiency versus business needs – ‘Service Value Management’, as UK analyst firm Quocirca describes it – has long been a holy grail in this industry, of course, but at Quest we’re hopeful that our own Foglight application management solution will establish itself as a market leader in this respect.

Allied to cost concerns are ongoing questions about technical robustness.  Microsoft attracted criticism recently for an outage of its fledgling Azure cloud platform.  Azure is only at the ‘pre-beta’ stage and this sector of the market is equally new.  These kinds of glitches are positively healthy, as they highlight the need for greater industry collaboration and more cohesive standards within the cloud environment.

Inevitably, the greatest concerns over cloud computing relate to the security of corporate data stored offsite and to the reliability of mission-critical applications being hosted remotely.  Understandably, many companies will struggle with the concept of not knowing exactly where in the world their data is stored.  There are also legal issues to consider in certain markets, where information is not permitted to be stored across national boundaries.

It is difficult to envision cloud computing losing its current momentum, but then again it wouldn’t be the first time that the technology industry’s next great white hope turned out to be only so much marketing rhetoric.  To avoid a repeat scenario, the IT industry must work together to address nascent issues like cost and security, ensuring that this cloud at least has a silver lining.

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