As a mid size business we are able to leverage data center solutions and “cloud” solutions. Our data center solutions end up becoming a “cloud” solution for businesses we outsource business processes to.

The greatest benifit we have gotten out of “cloud” solutions – Leverage the platform or product and build innovative solutions on top of it without having to worry about hardware infrastructure.

We utilize:
Salesforce.com, Force.com (Salesforce’s platform), Workday, Eloqua, Google apps, apttus, ADP and Tangier. Each has its own benifits and all have had a solid delivery in regards to uptime. Most deliver features and functions every 2-3 months.

Douglas Menefee
CIO
Schumacher Group

Sure – people are confused, skeptical, have imaginary as well as legitimate concerns. But wasn’t that true in the early days of client-server? or the internet? open source? web 2.0? SaaS apps? I’d wager that it might even go back to disruptive technologies like PC word-processing although I wasn’t an IT person back then. As the skeptics raise questions, the proponents will attempt to address them (either through debate or through refinement of the technology/model) and it will succeed….. or fail. We’ll see.

And there may be more of an assumption of “black and white” opinions amongst cloud proponents and skeptics. I’m personally incredibly optimistic about the value and impact of cloud computing, but also completely agree that no giant enterprise is going to flip a switch and go all-cloud any time soon for many of the reasons you mention.

Thx for a good post.

-Lance

Having said all of that, the value proposition has not been clearly stated and resonated. Right now, it’s a reduce cost play and a buy as a service instead of having an asset on your books. Security is HUGE for companies that deal with personal data, health care, military (i.e. ITAR), etc.

So, if someone wants to offer me an outsourcing deal and lower my costs by connecting data centers from varying suppliers together, running grids, enabling me to ARC and RRC storage and processing (virtual servers) on the fly and call it a “cloud” so be it. But, at the end of the day they slapped a label on everything they already had in the first place.

And as the customer, I get to have that resold to me. In some cases, I may have already paid for it once before.

As I responded to you in Twitter, I have a little different perspective. I don’t see how the Cloud can be considered to be turning when it’s barely even started to come in.

What do I mean?

I think I summarized it fairly well in my blog post here titled “Most CIO’s Not Sold On Cloud? Good, They Shouldn’t Be…”: http://www.rationalsurvivability.com/blog/?p=982 <– I do not think that means what you think that means

Good food for thought.

/Hoff

I believe the fundamental difference of cloud computing isn’t the technology per se, but that cloud is a completely different economic/cost model, and that difference drives (when properly/efficiently used) an *evolutionary* architectural/operational model. Of course there are some additional differences to more traditional models as Peter points out (security, data ownership, location, SLAs, etc). However I frequently wonder when I hear all the complaining about the additional time/risks/costs to ensure compliance, data integrity & security issues are taken care of in the cloud – how many were also performing those same steps on their internal systems, and at what cost? I think for too many, cloud computing would *force* them to take steps in those areas they’ve ignored in their own shops, and that’s when the additional costs come in – costs that should have been there all along in reality. Having been on both sides, I can say SaaS and cloud vendors get asked those questions every single day, and they can’t just pay lip service to the answers.

In addition, the *hype* has been significant, and George’s post is one more sign that we may be progressing toward the “Trough of Disillusionment.” This is not a bad thing; someone needs to be crying loud and long that too many emperors in this space ain’t wearing no clothes.

But let’s not lose sight of cloud computing’s proven benefits for any number of companies. The ability to design, implement and operate a system in a fraction of the time and cost is an ability that must not be overlooked, hype notwithstanding.

The message, I guess, is that companies should take all this stuff with a grain of salt, but not rule it out. Depending on their needs, ranging from Infrastructure as a Service (IaaS) in a production environment to Data Warehousing as a Service (DaaS), they should do their due diligence and see if it makes financial and operational sense. If it does, cloud computing should be heartily embraced. If not, move on. Just like any other technology.

But cloud computing is NOT just another name for ASP or timesharing or network computing, and it’s not by any means limited to SaaS. When BusinessWeek publishes a major article on the phenomenon (last week) and gets it COMPLETELY wrong, that tells me that the trend hasn’t come close to any kind of peak, much less having turned the tide.

Cloud computing’s compelling case (sorry for the alliteration) is one of COST reduction and elasticity and flexibility, not one of sudden new functionality per se. BusinessWeek got this entirely wrong. It honestly isn’t about “taking out your credit card and ringing up Amazon to stand up some servers real quick”, either. eHarmony recently did a project where they took a monthly expense of $5K down to $1.5K with cloud computing. (http://bit.ly/z7uQy). Here’s another study of a startup using cloud approaches and reaping a lot of benefits: http://bit.ly/4vQX9D

None of that is to say that there aren’t legitimate concerns and issues to be worked through: security, avoiding vendor lock-in, establishing process, etc. These are real and large. But I honestly don’t understand when people claim that cloud computing is just the same old stuff with a different name.

But elasticity is real work. You legacy applications were not built to scale across a variable number of servers. Most likely they run on a single machine. If they scale at all, it is across a fixed set of carefully configured servers.

For most business applications, the value of hour-by-hour scale up and scale down are low. The applications you have are valuable enough to run in a fixed deployment, or you wouldn’t have them. The potential savings aren’t going to be enought to drive the required investment to make legacy apps eslastic.

That sounds like bad news, but it will work out in the long term. Slowly but surely, customers are going to demand that new applications and platforms be elastic from the start. Even if they don’t deploy them in a private cloud, it is going to start out as a checkbox in the evaluation project and eventually grow into a real deployment requirement.

So cloud computing will work in the long run. But there is not going to be a tornado of adoption in the short term. The economics won’t justify it.