When is a cloud not a cloud?

As well as the levels of cloudiness, there are several attributes of cloudiness, which differ significantly between the pure cloud, dedicated or private cloud, and in-house or out-sourced provision. Here are some of the attributes of cloudiness and how they vary between different cloud configurations.

At h2index, we observe confusion arising from the loose use of the phrases "private cloud" and "cloud." Some vendors provide dedicated infrastructure, platforms or software off site and use the fashionable term "in the cloud" for what is really outsourcing: there is no elasticity (the ability to vary capacity easily) or variable pricing.  

Other vendors provide dedicated storage in a private cloud, but as a service complete with elasticity or pricing per user. It may not deliver all the cost savings of the full cloud, but it gives clients some control over change management enabling them to manage any customised interfaces.

If you look at the two right-hand columns in the table above, you may consider that these fuzzy definitions are not really what cloud computing is all about and we agree. Based upon what our clients tell us, we are going to concentrate on pure cloud computing.

Why go to the cloud?

The primary advantages are elasticity and the ability to pay per user or unit. Many large companies routinely operate infrastructure at low capacity so that they can cope with peak demand. In the cloud, companies avoid the initial heavy investment in new hardware and software and pay for the services or capacity as they need them, secure in the knowledge that they can accommodate a big jump in demand at any time.

Further advantages can include reducing the requirement for expensive specialist staff, removing day to day management of the service, and always having up-to-date systems so that the organisation can take advantage of new technology immediately.  

Why isn't everyone in the cloud?

Some of the biggest issues relate to security and regulatory matters: the vendors are working hard to address these and big multinationals are well aware of them. Sometimes the cloud is never going to be a suitable solution; most of the time there is likely to be a work around. We are not going to consider these further here.

We are more interested in four issues that our clients had not foreseen:

• Losing control
• Staffing
• Customisation
• Innovation

Our clients are astute: they have decided to move to the cloud after a detailed analysis of the costs and benefits, and acceptance of the compromises involved including the loss of control of their IT systems. However many senior IT managers have spent their whole career fighting to improve IT efficiency and effectiveness by standardising and harmonising IT systems and processes wherever and whenever it is helpful.  And doing it across large organisations operating in many countries. The reality of the cloud is that IT managers have to relinquish some control and we have seen many people for whom this is very uncomfortable.

For example, the vendor is about to release an update. Whilst being grateful for the warning, what are the implications? Do they affect users (new buttons or options)? Will the systems still operate particularly if they have been customised?

Vendors are still learning how to manage change in the cloud environment in conjunction with their customers. As they compete for business, their understanding and communications seem likely to improve, but it will take time.

Staffing

The business case for moving to the cloud commonly requires a reduction in the number of expensive specialist staff. But often companies have to retain more technical staff than was first thought and acquire new skills to manage the contracts and services. h2index has seen some painful transitional periods as IT departments adjust to the changing personnel requirements.

Customisation

Ideally, to benefit from the pure cloud, organisations need to remove customisations completely and live with the consequences. If this cannot be done, they need to segregate the customised parts and manage them separately, for example using platforms like Windows Azure. In theory there is a third option for the vendors to allow for (all) customers' needs, but in reality this isn't practical.

Innovation

Perhaps the biggest question of cloud computing revolves around innovation. Many large multinationals have gained benefits from their investment in sophisticated IT systems. If everyone has access to the same tools, will big companies lose this advantage?

Of course, whilst the tools might be available to all, they are sophisticated and can be used in many different ways. Will multinationals concentrate on people, training, communication and processes rather than customising their software?

It seems inevitable that cloud computing will transform IT provision into a utility like electricity or telephony. These latter two technologies were themselves once provided entirely by individual companies and they too had a moment in time when the first large companies took the big step to move to vendors over which they had no or little control.

Some of the points above may be contentious and we would welcome a debate about the issues raised or reply to this email.