Cloud Computing

As the title of a good white paper from Pace Harmon (News - Alert) issued in Aug. puts it, “Cloud Computing: Where does it fit within your Enterprise IT plans?”

The paper has a good overall discussion of the topic, and lists some good reasons why you would -- and why you wouldn’t -- use cloud computing. First, the pro:

Cost Effectiveness.

Providing the business immediate and economic access to enterprise- class IT services. In a traditional model, access to these resources would require significant capital investment (or large ongoing financial commitments).

Scalability.

An ability to respond rapidly to peaks and troughs in demand for IT resources and to pay for only the needed resources when they are needed. In a traditional model, systems need to be architected to support peaks in utilization, leaving costly resources sitting idle for most of the time.

Timeliness. With rapid deployment time frames measured in hours (for infrastructure and/or platforms) to weeks (for software). From sizing and purchasing infrastructure to installation, configuration, and testing, the deployment of enterprise infrastructure and applications is usually measured in months. Cloud Computing services therefore become an attractive option when timeframes are aggressive.

But it’s not for everyone.

Some Cons:

Business Risk.

There are intrinsic risks in making a third-party vendor responsible for part of the business’s key operations and/or service offerings. Even with extensive diligence, ongoing audits, and aggressive management, Cloud Computing still requires a level of trust in the vendor infrastructure and operations.

Data Security.

Compared to an internal deployment on standardized architecture, it is a challenge to incorporate Cloud services into enterprise-wide data archiving, backup and recovery processes.

Integration Complexity.

 While standalone services may have some value, integration is key to enabling end-to-end business processes. Integrating cloud offerings with internal resources (such as Active Directory for single sign on) or other cloud services is challenging. Vendors are starting to recognize and address this issue, with many SaaS (News - Alert) vendors developing related PaaS environments to enable development and integration (e.g., Salesforce’s Force.com and VMForce offerings).

Inflexibility.

The configurability of SaaS offerings is inherently limited because of the “shared” delivery model. The shared platform basically precludes comprehensive changes and an enterprise may not wish to redesign its processes or make the necessary compromises in application functionality.

Contractual terms.

A full discussion of contractual terms is beyond the scope of this memo, but this is an area that often poses problems for the enterprise. Volume commitments, change fees and minimum terms can significantly constrain the expected scalability and flexibility.