By David A. Kelly and Heather Ashton, Upside Research
In recent columns, we’ve discussed the convenience of the cloud for such diverse enterprise computing areas as BPM and backup and recovery. We certainly foresee cloud computing becoming a big part of the future for enterprise (and personal) computing. It’s already becoming ubiquitous across many enterprise software categories. The benefits of cloud-based solutions abound, from faster deployment, to richer functionality, to leveling the playing field for the SMB market by extending enterprise functionality to them at a fraction of the cost. The flexibility of the cloud is also appealing to companies of all sizes, given today’s global economy.
However, there’s a flip side to the rush to cloud computing. More specifically, the question is, is cloud computing is where enterprise should be investing? Has the market exploded too quickly to properly assess the associated risks with the cloud? Certainly, headline-grabbing data breaches in recent months have caused many organizations to carefully reconsider how and what they are willing to put in the cloud. So perhaps it’s a good time to consider why later may be better for cloud computing. To get the ball rolling, here are our top 5 reasons why organizations may want to go slow with cloud computing:
- 1. Security Risks – This is perhaps the most visible and riskiest component of the cloud. From customer records being hacked to cloud providers denying responsibility, to major brands being damaged as a result, security is always an issue. There have been many recent breaches in security that involve the cloud and some household brands, thereby raising the red flag on how secure the cloud is today, and how much thought organizations have put into their policies and procedures related to securing cloud-based data or applications. These concerns need to be mitigated quickly before large enterprises lose faith in the cloud.
- 2. Hidden Costs – One of the major draws for cloud computing is that it promises a low-cost alternative to enterprise applications, especially for the SMB market. However, it is still buyer beware, even in the cloud. With the addition of user licenses, customizations, added functionality, what started as a cheap application can balloon into an expensive one without proper oversight. Other hidden costs include the cost to manage the application, which usually does have to involve IT once an application reaches enterprise-scale.
- 3. Service Levels / One Size May Not Fit All – Some enterprises have discovered that the level of service they expected has not held up, and without an airtight contract it is difficult to enforce. Because cloud-based apps can often be assigned to a departmental budget, it can become a real challenge when a cloud application grows across an enterprise, and there weren’t the necessary service agreements put in place from the beginning because IT wasn’t involved. It can be difficult to track back and remedy this when a cloud-based application proliferates throughout a company.
- 4. Lack of Competitive Advantage – Perhaps one of the “softer” reasons that the cloud may not be the panacea that vendors hope is that cloud computing levels the playing field in a world where IT strength has become Intellectual Property for many leading enterprises. No major brand wants to be homogenized, and if that is where cloud computing will take them, there will be significant reluctance to move to the new model, even with all that it promises.
- 5. Implementation is not always simple – As with enterprise applications deployed behind the firewall, applications in the cloud can contain the same level of complexity. Most enterprise customers want a cloud application customized to their business, and this can be more costly, time-intensive, and complex than initially thought. The cloud does not remove this aspect of applications development, nor the upgrade challenges that can be exacerbated by a cloud application. And, sometimes the cloud can cause more challenges for the company that decides the cloud is not for them and wants to move the application behind the firewall.
We have seen many good uses of the cloud for enterprise computing, but this article is an attempt to open a discussion about what still needs to happen for the cloud to live up to our expectations for helping improve the agility, flexibility, and globalism of enterprise applications. What is your experience with the cloud? We’re all ears.
