There has been much focus recently on cloud computing and its adoption (or not) by the enterprise. Although most cloud vendors are understandably keeping their cards close to the chest, by all reports the enterprise uptake has been slow.
The problem as I see it thus far has been:
- Enterprises are notoriously bad at costing internal IT infrastructure. For 20 years the IT department has sat comfortably in the corner of the office occasionally ducking in and out of that off-limits humming room with no windows speaking a secret coded language of CAT-5 cables and firewalls. They have long enjoyed the place of an unavoidable cost of doing business, as a supplier of basic employee needs, like the water cooler and instant coffee and thereby flying under the radar of accountability and business cost alignment
- When a cloud computing alternative is investigated, who is called upon to do the cost comparison? The IT Infrastructure department! With vested interests in their own survival they are unlikely to cost in the financial benefits realised by their own demise. The costs benefits of cloud alternatives to an enterprise are often understated and don’t include the material benefits of reduced personnel, electricity, bandwidth, and expensive floor space.
- Moving to the cloud takes effort, human effort, and that’s expensive both in raw hourly rates and opportunity cost that could be spent building new features into your products to keep ahead of your existing competition. The human effort required to move workloads to the cloud costs more than the immediate savings.
- The Cloud has not been around long enough to outlive the incumbent hardware cycle. Hardware is purchased and depreciated on a 3-4 year capital expenditure and depreciation cycle. The sunk costs in existing hardware deployments need to be ridden out before new alternatives are considered.
- Large enterprises already enjoy reasonable economies of scale in existing computing and virtualisation infrastructure. While they certainly can’t match the pricing of a cloud vendor, the price they currently pay is not different enough to motivate immediate corrective action.
- The perceived security of having data physically located within the four walls of the organization is a difficult mindset to overcome. “I like to be able to touch my data” is an emotional reaction akin to keeping money under the mattress that doesn’t stand up to technical debate but is deeply rooted in our human nature and our attitude to apparent physical security.
All of these problems are temporary and will inevitably make their way through the process of organisational change. The movement of existing on-premise computing workloads to cheaper processing alternatives is economically inevitable. So with cautious uptake of cloud computing by enterprise, is all this cloud talk really just hype? Is there really a cloud revolution or is it just the Internet in new clothes? Halving an IT budget and moving unpredictable capital expenditure to predictable operating expenditure is certainly great for business, but it’s not that great a leap forward in human evolution.
Cloud is an enabling technology, a familiar tool wielded by a new set of hands for which traditional computing was financially out of reach. It’s here that utility computing is being leveraged to bring new opportunities and leaps forward in innovation. Unencumbered by legacy infrastructure or attitudes the new cloud-enabled industry is stealing away time and market share on the discounted cloud infrastructure deployed waiting for enterprise to arrive.
There is certainly a “Cloud Revolution” underway, and like all great revolutions it is starting from the bottom up which I will cover by looking a little closer at the following three case studies: