This article originally appeared in the October 2010 issue of INTERNET TELEPHONY

Do you work for one of the many organizations asking: How can my company get started with cloud computing? If so, first look at what some of the early adopters and market leaders consider the cloud’s true benefits. Surprisingly, cost reductions do not top the list. The ability to scale capacity on-demand – with costs that match true consumption – offers businesses the flexibility they need to compete. The real question is: Are you cloud ready?  According to Forrester (News - Alert) Research surveys that were correlated with customer interviews, only about 5 percent of enterprise IT shops have enough experience to activate cloud computing.

The application deployment challenges that an OEM or ISV must overcome are equally alarming, and complicated by the standardization issues with which cloud providers are struggling. Most cloud providers today are not achieving sustainable profit around their cloud offerings as a result of high capital expense, low operational efficiency and high customer turn over. Vendors beware.

OEMs and ISVs want the public cloud to reach broader markets while their applications leverage an inexpensive and easily accessible way to share and provision information. But the public cloud’s lack of automation and management tools causes these vendors to support a wide range of cloud standards, increasing their costs. One option is the internal or private cloud, which is hosted and highly controlled within a data center. Private clouds can leverage standard processes and protections, but they tend to be limited in size and scale. However, the end customer must incur the full capital and operational costs for the physical resources – back to square one.

It’s the seamless integration between public and private cloud infrastructures that promises the greatest value. A hybrid cloud structure can provide a multi-tenant environment built on rented resources that are dedicated to a single client. This helps to defer the high capital and operational expenses of an internal cloud. Hybrid resources can more easily grow or shrink in size as needed by simply renting more resources but providing more custom SLAs.

The tools needed to create a hybrid cloud are emerging. Hybrid cloud appliances offer a hardware/software solution that leverages the public cloud for non-core functions such as e-mail, and retains control over sensitive data that the end customer is not ready to share in a public cloud (such as medical records). The cost of the hardware acquisition is lower, but the level of control, automation and security around key data is secure.