Why cloud computing is not for everyone

I’m often invited by CEOs and CFOs to explain what all the excitement is about this thing called cloud. They’ve all heard the term, but they’re not sure what it really means. They’ve been told that they can save a lot of money by having their employees use the cloud for their computing needs, and in today’s business climate, who’s not interested in saving money? They ask me to explain in simple terms just what it means to move to the cloud, and to find out if it really makes sense for them. They want to know why some companies have been reluctant to adopt cloud computing. “If it’s so good”, they ask, then “why isn’t everyone jumping in?”

There’s nothing new about the cloud. Early mainframes provided cloud-based computing services. RJE, HASP, and TSO allowed users to submit jobs for processing from a remote terminal. With a few keystrokes, anyone with a terminal and a connection to the system could leverage the enormous computing power of an IBM 360 or 370. While somewhat clumsy, these technologies did enable the delivery of large amounts of computing power to remote users in a cost-effective manner. Disk storage was very expensive so data was maintained on the mainframe. Users had no local storage, and if you wanted your data to persist you were charged dearly for the space. The basic elements of cloud computing – centralized computing resources, standardized application services, data storage, and remote connectivity – were already in place.

Years later, bandwidth, storage capacity, and compute power have increased exponentially. Simple character-based protocols have been replaced with rich network traffic. We’re able to process large amounts of data with powerful processors, faster memory, and almost unlimited amounts of storage. High speed routers, coax and fiber help deliver this rich content effectively over great distances. Books, magazines, and newspapers are quickly becoming obsolete, replaced with online content. Music and video is routinely streamed to the home or mobile phone, and almost no one uses a dictionary or encyclopedia. The data is maintained in the cloud, and the same content is delivered to everyone. It makes perfect sense to maintain a single repository in the cloud, providing the infrastructure is able to properly scale. The centralized data can be accessed from anywhere, allowing users to access their content on a variety of devices from almost anywhere in the world.

The cloud is much more than a data repository, however. Today’s clouds offer not only virtualized desktops and servers, but resources such as CPUs, memory, LANs, SANs, and networks that can be combined and configured to provide complete solutions in the cloud. In addition to platform services, the cloud can deliver SaaS applications such as word processing and graphics design on an ‘as needed’ or rental basis. Applications in the cloud can be easily updated in one place, and the new version deployed users without requiring them to do anything. A cloud also makes the perfect platform for a mobile device deployment where security, compliance, governance, and lifecycle management are critical. IT and business processes can be automated to reduce costs, and the cloud can host proactive management tools as well as rules-based analytics to help lower operating costs.

With all of these advantages, why isn’t cloud being embraced by more companies? Why have companies resisted moving their applications en masse to the cloud? Let’s take a look at some of the key issues why cloud has just not taken off.

First, all clouds are not the same.

A private cloud is installed and hosted on company premises. It is configured and maintained by the company’s IT organization. They establish and enforce security and access rights. A private cloud may or may not allow an incoming VPN for management or external access. The equipment is usually purchased, capitalized, and maintained by the internal staff. Because the private cloud remains on the customer premises, it can utilize existing directory and authentication servers on the local network and can access internal resources.

A public cloud provides access to virtual operating system images, instances, and applications for a fee, similar to AWS. There are several ways to use a public cloud, but so far, most seem to be using it to spin up a copy of Windows or Linux and kick the tires. Depending on the level of access, users may be able to store their files on a SAN or virtual file system. At the lowest price point, instances might get swapped out or destroyed without warning. Since Virtual Machines are often shared across a large number of subscribers, performance can suffer significantly as instances are swapped in an out among users, and response times may not be deterministic. Communications between VMs on virtual networks can be slow due to heavy network traffic and network isolation requirements.

Another type of cloud may be what I refer to as a local data cloud. A local data cloud contains one or more elements of both a private and a public cloud. For example, suppose a company wants to offer a public cloud where outside users can execute programs, but company employees can log on to the public cloud to perform support and administration tasks. The cloud could be configured to run the users’ virtual machines in the public address space but require those users to be authenticated with company’s internal authentication server. Another example might be the ability to permit users with an elevated level of entitlement to access certain resources on the intranet while those resources would remain invisible to others.

A compelling aspect of the local data cloud is a cloud that provides a single, managed application stack, while at the same time preventing any data from moving outside the users’ local environment. Data remains on the user’s system or on an internal repository, but never gets past the firewall. In this model, companies and users can leverage the benefit of single-sourced, managed applications in the cloud but also enforce local authentication and IT policy compliance. Data remains under the control of the company and cannot be accessed by anyone without proper credentials or access rights. The uncertainties of having confidential or sensitive data stored or exposed anywhere outside a company’s intranet is perhaps the most important reason why companies have resisted moving to the cloud. A company’s data is perhaps their most valuable asset, and they simply don’t want it stored anywhere outside their company.