"Look at how vendors try to sell cloud infrastructures to IT. When businesses turn to their trusted vendors—HP, Cisco, VMware, IBM—they discover that all of them want to sell massive cloud projects," said Jay Litkey, CEO of Embotics, a provider of private cloud management tools.
If a trusted vendor tells you that you pretty much need to start over from scratch and tackle a forklift upgrade of your infrastructure, you'll find reasons to put it off. The vendor will tell you that this will pay for itself, but you're smart enough to know that this will take long enough that you may no longer even be with the company once it does.
Then, even if you avoid a massive cloud undertaking and roll out cloud services on the cheap, it's your employees who will think of the cloud as free. It's the tragedy of the commons happening in your data center.
"People will run up resources for some hair-brained idea, but if it doesn't pan out, they never give the resources back," Litkey said. He noted that a client of Embotic's, an international telecommunications firm, used Embotic's management software to find 50 idle virtual machines. These VMs were still consuming resources, but they hadn't been used in more than a year.
It's easy enough to set up policies to expire idle VMs, but if you think of the cloud as free, you will most likely neglect creating such policies.
Once you stop thinking of the cloud as free, the next step often appears to be chargebacks. It makes sense, but striving for chargebacks too early in the adoption cycle can be counterproductive.
Instead, at first smart organizations opt for "show backs."
Starting with "show backs" is really just some psychological jujitsu that paves the way for chargebacks, but it's an important step that shouldn't be skipped.
"Business units and individual employees get to see exactly what they're costing the business," Litkey said. "What happens, of course, is that those consuming the most resources are forced to be self-reflective because they can see where this is heading. But they can't really complain because you're just showing them, not charging them."
According to Litkey, the biggest resource hogs usually try to curtail usage so they don't stand out, and the result is that a little behavioral sleight of hand forces people to think about best practices and consume resources wisely.
There's actually some truth in this misperception. Of course, if your application is a virtual machine is in Amazon's data center, you can't exercise the same kind of control as over an application in a server within your own data center.
But who cares?
As cloud innovations push computing resources towards utility-type consumption, what you control shifts from plumbing to strategic assets. After all, how many businesses run their own power plants?
Case in point: when DISH Networks sought to modernize its mobile workforce, one of their fears about embracing the cloud was that it would involve ceding control over the application. But ceding control meant that they could focus on controlling things that actually benefited the bottom line, such as worker productivity.
Instead of developing their own application or extensively customizing something already on the market – which they would then need to maintain and manage – DISH turned to TOA Technologies. "The benefits for us was, first, that when you turn [the application] over to someone else who has better scale to provide it to you, then don’t really have to worry about the particulars of how it’s being hosted, just the outcomes," said Mike McClaskey, CIO of DISH Networks.
"Secondly, speed of implementation is a real benefit for us," he added. By embracing cloud services, businesses find that they can roll out new applications and services in hour or days, rather than weeks or months.
Of course, we've heard this story before (the ASPs and MSPs of the late 90s and early 2000s), but it didn't always pan out.
What's different this time around is scale. The early service providers could certainly scale better than individual businesses, but they were constrained by traditional, hard-to-scale infrastructures. As more and more computing resources become commodities, cloud scale is a vastly different thing. Today's service providers can focus on adding value rather than just keeping the plumbing functioning, and, in turn, their customers can experiment with all sorts of use cases—and focus on outcomes.
So, yes, you may give up some control when you move to the cloud, but you'll gain the ability to innovate quickly. In today's cutthroat economy, speed of execution is what often separates the winners from the losers.
Jeff Vance is a Santa Monica-based writer. He's the founder of Startup50, a site devoted to emerging tech startups, and he also founded the content marketing firm, Sandstorm Media. Connect with him on Twitter @JWVance.