Does “The Cloud” Make Sense for Business?

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The interest in Cloud Computing has grown exponentially in the past few months with a quick Google search on “The Cloud” and on “Cloud Computing” yielding over 25 million articles between the two phrases.

Suddenly, it seems, this is the panacea for all that ails in the technology space – or is it?

There is certainly a good deal of ongoing investment in giant data farms – although the cost of power required to run, and cool, these massive installations is now causing serious concern. I’ve seen estimates of up to 100MW for a giant server farm under development, with 50MW farms apparently not being unusual. Consequently we’re seeing imaginative schemes to overcome this in advanced stages of investigation – ranging from hydroelectric schemes in particularly cold countries with good water, like Iceland and Finland, to Scottish tidal power, to some companies even investigating building sea-platforms that use wave energy for power and sea water for cooling.

However, there is equally a slow but steady increase in governments wanting to monitor data traffic – apparently for security reasons, although I suspect there may be oversight by the fiscal authorities, too. Even Australia is talking about Internet filtering…

All of this is adding greatly to the conversation, of course, with equally strong lobbies on both sides of the debate – much around whether Cloud Computing is taking us back to the old “mainframe and dumb terminal” computing days or whether it’s taking us forward to an more secure, cost-effective era, albeit with the possibility of less flexibility with systems and information.

In my view, though, the issue of whether to adopt a Cloud architecture or not comes down to individual companies and applications – and for the purposes of this discussion, I mean a public Cloud architecture, rather than one owned by the end-user company.

To my mind, the companies that should strongly look at this approach are the SMEs (Small and Medium Enterprises). The reasons here are straightforward economics – few will have the staff or the capital resources to have a fully secure IT infrastructure, complete with Disaster Recovery. This means multiple servers in multiple locations, interconnected by very high speed links and a significant IT team managing it all, with a strong security system. By adopting Cloud architecture for most applications – including that most critical one of all for most businesses, email – the issues of security, availability, backup and full disaster recovery are outsourced to the experts and the SME gets on with running its business. That’s not to say you dispense with PCs – they will still have a strong place in many areas, from detailed individual analysis of data to creative writing, design, etc.

For large corporates, though, the issue is different. They have large IT teams. They have multiple locations, many servers and, generally, already have high-speed connections between them all. Therefore, ensuring adequate levels of security and availability while having a proper backup regimen and a full set of disaster recovery plans for each location, should be routine and already in place. For these organisations, Cloud Computing makes little sense – except, perhaps, for some specialist applications that are not available in another form.

And, of course, if all the world’s large corporates had all their corporate systems in a few locations, what a tempting terrorist target that would make – SPECTRE, of James Bond fame, would seem tame by comparison with the havoc that could be wrought in such a scenario.

So, to answer the question about whether “The Cloud” makes sense for business, my view is that for most SMEs, certainly. For large corporates, probably not. What do you think?

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6 responses to “Does “The Cloud” Make Sense for Business?

  1. Guy

    Some comments:

    1) The term “Cloud Computing” as a catch all takes no account of what the application being delivered is/does for the end user. Therefore to make the huge leap to say that it is relevant mainly for SMB is somewhat misleading and out of context. Intralinks, for example, in the US alone, provides Cloud based solutions to 800 of the Fortune 1000 companies in addition to a plethora of smaller companies.

    2) SaaS/Cloud providers that don’t have bullet proof local and geographical High Availability infrastructures with solid Business Continuity processes to protect from “normal” disasters or severe terrorist attack should not be in business.

    3) Companies like Intralinks, Informatica and Salesforce.com extend the value of the existing corporate IT infrastructure by integrating with it and delivering additional value – Cloud based solutions are not always about an either or choice. Again, it depends on the business process and the application.

    4) Isn’t it a good thing for corporates to be able to drive efficiencies and increase security at the same time as improving their green credentials by reducing their energy consumption?

    • Thanks for some great comments, Alasdair.

      The context of Cloud I was using for this short post was that of organisations moving their entire IT infrastructure to the Cloud, and this is where it makes most sense for SMEs. When discussing individual applications, rather than the whole environment, I would tend to refer to SaaS applications.

      To be honest, a detailed discussion would be beyond the scope of a blog such as this, which can only provide a high-level look.

      I agree that environments like Intralinks provide great SaaS offerings that make sense for large corporates – these are more along the lines of the specialist apps to which I referred. There may well be ways in which corporations can run similar applications in-house, but in some cases – and yours is a great example – utilising SaaS makes most sense.

      On the energy side I’m not convinced that for large corporations, these would be noticable overall: rather they’re just shifting the energy use to the server farm provider. Any cost savings on the energy side would be more than covered by the price paid to the server farm for utilising its facilities (after all, they’re in business to make a profit, too). A large corporate with a properly designed IT infrastructure should be making very effective use of its energy environment anyway.

      Thanks again for your comments.

  2. Pingback: Tweets that mention Does “The Cloud” Make Sense for Business?: Image by Getty Images via Daylife The interest in Cloud Computing ... -- Topsy.com

  3. I agree that Cloud certainly has a lot of advantages for the SMB sector but one should not rule out the advantages for the enterprise sector.

    • Thanks Mita. I agree that it has a place in the Enterprise for certain apps, but don’t believe it’s a good idea as an overall IT strategy for large Enterprises.

      Happy to hear your more detailed views, though, and discuss.

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