The Forecast for Cloud Computing

A huge cloud hangs over the future of IT.

After more than a decade of refining the Internet as a marketplace, the business world is grappling with the uneasy reality that companies can run almost every information system they rely on without owning any tech equipment. Thanks to the phenomenon known as cloud computing, businesses can rent access to applications and IT infrastructure that reside on the Internet, pay for them on a subscription or per-use basis and provide employees with access to information from anywhere at any time with nothing more than a connected device.

In theory, it sounds great. No more wrangling with software updates or growing storage requirements. And the days of having to expand data centers to make room for additional racks of servers to support a growing business? Gone.

Of course, the promise of cloud computing goes far beyond providing solutions to such headaches. It may, in fact, hold promise for transforming the role of IT within the business. The potential to one day subscribe to systems as a service could mean an end to wrangling with infrastructure decisions by letting a service provider sweat issues like server capacity, storage and bandwidth. Cloud computing also may prove to be an ideal strategy for reaping the full benefit of mobile devices by allowing companies to essentially push their IT environment out to employees, rather than employees having to get access to the IT environment.

But theory isn’t reality, and just because cloud computing holds promise doesn’t mean that’s going to translate into practical solutions for real business technology challenges–at least, not anytime soon. Cloud computing serves as a reminder that computing models constantly change. As businesses face increasing pressures to be as agile as possible, they’ll be forced to adapt to evolving computing models to remain competitive.

Like all technological advances, cloud computing isn’t without risk. For instance, there are security risks related to commingling your data with that of other companies. And reliability concerns arise whenever you depend on a third party’s systems to be up and running 24/7, as companies that rely on’s fledgling Simple Storage Service, or S3, learned when the service went down for two hours last month.

Still, IT folks seem willing to put up with the glitches in exchange for the potential benefits, as indicated by one online poster who chimed in on the Wall Street Journal Web site after reading of the Amazon outage. “Cloud computing may be new and may not be at telephone reliability,” wrote the S3 user, “but Internet hosting as a utility is a trend that’s well on its way.”

There’s plenty of evidence to back up such statements. On-demand application providers such as and NetSuite have proven that there’s a market for so-called software as a service, or SaaS. Amazon’s S3 and Elastic Compute Cloud offerings, which provide storage and excess server computing capacity, respectively, as utility services, have been met with great enthusiasm. The tech industry’s old and new guards, IBM and Google, also have made strategic commitments to cloud computing, separately and in tandem.

This spring, IBM will roll out Blue Cloud, an initiative that lets IT departments benefit from cloud computing technologies within their own data infrastructure. Eventually, this effort could allow IT departments to build internal clouds that will link to the larger public cloud or to other private clouds. “However, our customers are telling us that’s not what they want today,” says Dennis Quan, chief technology officer for the Blue Cloud initiative. “What they want are the benefits of cloud computing to maximize their infrastructures and control the rapid growth in their data centers.”

Google, meanwhile, has been building a head of steam for its Google Apps, a suite of Web-based productivity and collaboration tools, such as e-mail and word processing, designed for use by consumers and small businesses.

And last year, IBM and Google announced a research initiative in which they’ll invest $30 million to develop a joint infrastructure cloud for universities that want to provide remote programming and research capabilities for their students.

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