Ben Trowbridge

Cloud Sourcing: Why is Everyone Getting So Excited?

Posted by Ben Trowbridge on Tuesday, 23 November 2010 00:19
Categories: Strategy

The word ‘cloud’ will take on greater meaning and relevance in the coming year as companies, as well as the general public, become more acquainted with how it will change our lives. Cloud Computing is about to completely change the way IT services are supplied, consumed, and most of all how IT is outsourced.

Recently, President Barack Obama spoke about cloud sourcing as an emerging IT theme. And, Microsoft has gone so far as to announce a ‘cloud strategy.'

The reasons behind this sudden expansion are many and varied, but one of the fundamental reasons is the current economic climate. From an economic perspective, cloud enables:

-    Avoidance of capital expenditure and fixed costs. By moving to an outsourced, pay as you go model for computing power, organizations avoid the capital expenditure involved in setting up servers and data centers and the fixed costs of a team to keep them running.

-    Scale up and scale down. By moving to a model where the generator of computing power is given the task of smoothing the peaks and valleys of computing usage across wide swathes of users, the purchaser gets the ability to handle peaks and valleys on demand without an investment in a specific system configured for the peaks.

-    Resilience. A model where computing is spread across multiple sources of supply is more resilient – designed right, a failure of a server or an entire data centre should not be a disaster which needs to be recovered but a normal part of business.

In other words, cloud computing provides a pay as you go scenario and leaves someone else to worry about demand planning and continuity of supply. It’s a nice perk in economic conditions where cost saving is at the forefront of everyone’s mind.

While there is a clear upside to Cloud Computing, there are some pitfalls which need to be navigated as the cloud industry matures.
-    Performance and Downtime. While cloud providers offer and meet service levels, outages can and will happen.

-    Security and Data Protection. Corporations need clarity on data protection and data security. Not all current offerings are compliant with European Data.

-    Protection laws. As with any other outsource supplier, a cloud supplier must be willing to demonstrate and prove the security of their facilities.

-    Lock-in. As is typical in a new industry, there’s no one standard of service. The kinds of services offered vary from provider to provider. Adapting corporate processes to the wrong provider would mean a costly refit to change to another.

-    Wrong technology base. In some cases the technology offered is not a lot of help. If you are running a web-based business supported by a warehouse full of Linux servers you’re probably thinking about the Cloud already; if you have a room full of legacy AS400s, the current Cloud will not help unless you rebuild your corporate applications from scratch.

-    Over-hyped and under specified. As always there’s vapourware and overhyped offerings. A cursory look at Google Docs reveals it’s a long way from being a Microsoft Office competitor unless (and here’s the key) functionality can take a back seat to rapid, cost-effective rollout to a large number of users.

It is important to see cloud computing for what it is, an exciting paradigm shift in the way that all business and consumers will ultimately use technology.

Additional perspective can be found in a new article from Alsbridge titled,
 “Cloud Sourcing: Why is Everyone Getting So Excited?”

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