The Red Herrings of Cloud Computing

I came across yet another article on the limitations of cloud computing posted over on TechFlash (which i found by way of Todd Bishop’s Twitter feed). While the author, Matt Seidel, makes some good points, he fails to do his homework in constructing a defensible position against the cloud. His three primary arguments: instability of these platforms (and the lack of visibility into reasons for their failures), questionable business models (or intent) of the leading cloud computing firms, and the limitations of a proprietary system.

As I commented to the author, he had some good points, but the blanket statements just don’t stand up to the many different facets of cloud service offerings. Interestingly, these are the same issues that I tackled while with E2open back in 2001-2003 when I helped build a hosted collaboration and supply-chain visibility platform, and have largely been debunked.

First, regarding the concerns around reliability of the cloud platform, I agree that this should be of primary concern to any company or consumer investigating cloud services. However, the fact is that many of these services already attempt to maintain 99.9% uptime or better. But it is just as critical for cloud service providers need to maintain standard SLAs and uptime commitments as any brick and mortar or in-house solution – but I would argue that most hosted services make uptime and other critical application data much more visible (and timely) than most internal applications. Real-time data is a major selling factor for many of these services, with out-of-the-box integration with many of the leading BI solutions (if not downloadable raw data).

Second, I don’t think there’s much to the argument against companies like Google, Microsoft, and Amazon going against their fundamental business models by moving into the cloud services realm. Much the opposite – I believe the future business models of these companies are very much tied to the cloud, and they are the ones with the capital to research and develop this technology, building out the future platforms. There is still ample space for other players – large and small, entrepreneurial innovations to constantly push the envelope and shape our direction, and for standards bodies, government institutions, and capitalism to shape the industry. In short, I don’t believe that any one company will own the cloud computing space outright, just as no single company owns the internet. There is plenty of opportunity out there for everyone. There’s nothing ominous about Google, Microsoft and Amazon being the leading players.

Third, the concern over the limitations of features in cloud services is the strongest argument again moving toward a hosted application. The main tradeoff of cloud services is that you’re usually buying the “plain vanilla” version of a product. If you’re talking about offering SharePoint MySites to 50,000 employees, vanilla might be just what you want at an economical price. But if your need is to provide a cutting-edge collaboration platform to partners and customers, a hosted model may not provide the flexibility you need for customization and server-side control. You as a consumer need to figure out these feature tradeoffs, and decide whether you can live without the level of control and customization that comes with self-hosting, and weigh it against the costs.

There are tremendous benefits that come with cloud computing – the main benefit, in my estimation, is your ability to focus on the core of your own business, instead of having to become an expert in, say, CRM. Or collaboration. Or email. Or financial services. Cloud services allow you to “outsource” these activities, reducing (probably) your expenses and improving your core business trajectory.

Having helped launch both the E2open hosted collaboration platform and Microsoft’s enterprise hosted SharePoint platform, my advice to companies is to weigh these factors before moving forward with cloud computing: What is the system reliability/uptime/SLA? What are the features provided, and the limitations compared to current/in-house solutions? What are the integration/reporting/data benefits/limitations? What are the capital expenditure and headcount cost savings?

If you have these questions answered, you’ll be in a better position to take advantage of the next wave of cloud computing services.