Debunking the buzz
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Debunking the buzz
Yuvi Kochar, CTO for The Washington Post Co., says that the lack of an agreed-upon definition of the cloud forces IT executives to spend too much time determining whether products fit into the category. "There are many existing services that everyone has tried to morph into cloud computing, and some of those are relevant and rightly fit into that definition," Kochar says. But, he notes, "a souped-up version of virtualization doesn't fit into a definition of cloud computing."
And even when vendors' offerings can legitimately be called cloud computing, many are being tripped up by their own underdeveloped approaches to pricing.
"There aren't enough business models emerging out of the cloud beyond the raw cost proposition," says K. Ananth Krishnan, CTO for Tata Consultancy Services. "I think the 'aha' moment is yet to come."
Actually, some CIOs have had an "aha" moment, as in: "Aha! I should have known the big vendors are still doing things the old way." Jerry Batt, CIO of Pulte Homes, found that when his business went south due to the subprime crisis, he wasn't able to ramp down his investment in a cloud service as much as he wanted to.
Batt acknowledges that he may have jumped on too quickly. His issues with pricing inflexibility came on the heels of numerous technical hiccups that unexpectedly resulted from integrating his internal systems with the cloud service. But as frustrating as those problems were, he says the lack of flexible pricing--which he attributes, in part, to over-consolidation in the vendor market--is responsible for his mistrust of the cloud.
But Krishnan believes that the perceived shortcomings of cloud computing have as much to do with the impatience of the IT world as they do with the immaturity of the market. He points to Nicholas Carr's suggestion, in his most recent book, The Big Switch, that a model for delivering metered IT could evolve much the way it has for electricity. The catch? That electricity-delivery model took shape over 100 years; the cloud computing market has been forming for less than a decade.
In other words, CIOs can learn a valuable lesson about patience from Batt and other who may have over-committed to cloud computing before it could really live up to the hype. That doesn't mean CIOs should crawl inside a hole and wait for a mature cloud computing model to emerge. Rather, they should pick carefully by auditing each of their applications to determine whether the requirements make them good candidates for the cloud--when it finally comes along.
There are plenty of business needs adequately met by today's cloud. On-demand applications are enabling IT shops to outsource non-critical business processes, such as contact management or expense reporting. Platform-as-a-service offerings are letting companies build their own tools to manage similar processes. And renting server time and processing power can be ideal to accommodate entrepreneurial IT projects.
Until the cloud market evolves to where it can deliver the kind of capabilities that will make choosing it a no-brainer for meeting broad enterprise needs, CIOs should adjust their expectations. By doing so, says Kusnetzky, "they may find that some of what they're doing is available today as a product in the cloud."
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