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Three Myths About Cloud Computing

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With all the hype about the tsunami of cloud computing wiping out internal data centers, you’d think it’s only a matter of days before the thousands of internal data centers in the corporate world were converted into foosball playgrounds.

Yet all of the talk about cloud computing as a corporate IT revolution, especially the public cloud, overstates the short and medium term outlook, as well as ignoring some of the key obstacles.

I’ve spent the past several months reviewing data from two massive global surveys of senior and mid-level corporate executives from around the world, as well as follow up field interviews. More than 2,000 respondents to the two mid-2011 surveys – one by Harvard Business Review Analytic Services for Microsoft and the other by Bloomberg Businessweek Research Services (BBWS) on behalf of Pricewaterhouse Coopers – clearly show that companies are adopting the cloud computing paradigm to a certain extent.

(More information about the demographics is available via the hyperlinks at the end of this column.)

The first myth is that companies are abandoning their existing infrastructure in droves to adopt the new computing paradigm. The reality is that the majority of their IT infrastructure resources is in a traditional data center environment now and will be in three years.

On average, only a third of companies’ IT resources will be from the cloud, even in 2014.

The second myth of cloud computing is the rise of the public cloud. Well, yes, lots of individuals and companies are using the public cloud for email, document sharing or other non-strategic tasks. But IT resources from the public cloud will only be 7% of the overall infrastructure, on average.

Private cloud infrastructures will be far more popular – more than a quarter of the average organization’s IT resources will be based on some sort of private cloud implementation.

The third myth of cloud computing is the most interesting: the key concerns. We all know about the security bugaboo surrounding the cloud, and smart IT pros realize there are integration, governance and compliance challenges in adopting cloud architecture. What most people outside of the data center don’t realize is the challenge of transforming existing applications to run in a cloud environment.

The BBRS survey focused on this aspect and revealed some important data. Of course the most likely workload to go from an internal data center to a cloud environment is storage, particularly back-up and disaster recovery. In a sense, DR has been a cloud application for decades, so it is easy to shift that workload to a cloud infrastructure if it is already internal.

As the table below shows, most organizations already have shifted their DR workloads to some sort of cloud arrangement. And notice the interest in using cloud-based resources for mission-critical applications such as online transaction processing: roughly half the organizations say they’ll be using the cloud for OLTP within three years.

private, public cloud computing

Source: Bloomberg Businessweek Research Services, 2011

True to form, the biggest increases in future cloud adoption appear to focus on areas where the existing IT department has less of an installed base, or clout.

One of the biggest growth areas for cloud computing is in the provisioning for big data and analytics projects. Many CIOs clearly are saying that they don’t want to buy a big dedicated box to solve an occasional computational challenge, or spend a fortune gearing up for a large big-data initiative when no one seems able to articulate the ROI of that spend in advance.

Many seem to be saying that it is much better to hire Amazon Web Services or some other cloud provider for a short term horsepower injection when needed.

Overall, though, in discussions with services firms that provide either traditional or cloud computing resources as well as consultants, there is a substantial amount of skepticism that these organizations will be able to shift the majority of their workloads to some sort of cloud architecture in this time frame.

It’s not just the financial reasons – CFOs won’t be keen to prematurely write off a lot of hardware and software investments – that will slow the shift. Shifting a traditional RDBMS application to the cloud is a non-trivial task. And there are substantial IT architecture questions to be addressed.

“While there are many great reasons to consider cloud infrastructure, and it is definitely the future, the transition is not free,” warns David Stuckey, Pricewaterhouse Cooper’s practice leader for data center infrastructure. “Before re-hosting major parts of the application portfolio onto clouds, an enterprise would be wise to revisit the strategic fit between the evolving business architecture and IT. It’s also a great time to commit to disciplines such as IT service management) because cloud infrastructure fits naturally into that paradigm.”

You can see the dilemma faced by many organizations—they are eager to adopt cloud computing, but know their organizations’ culture, workloads or other factors preclude a massive adoption.

When asked two separate questions – 1) which type of IT infrastructure will your organization have in three years and 2) which approach will be the best in three years – they have a severe case of cognitive dissonance.

Six out of ten say they’ll still have a traditional data center in 2014, but less than four out of ten think that is the best approach at that point.

Similarly, while a third says they’ll have some sort of cloud infrastructure in place in three years, almost two thirds say cloud is the best approach. Here’s the table with the data:

support and best approach to cloud computing

Source: Bloomberg Businessweek Research Services, 2011

In other words, cloud computing is not the panacea for all of the ills of managing IT. Many of the challenges don’t go away, and new ones rise up. And anyone who thinks that there will be huge piles of abandoned data center mainframes littering corporate trash bins anytime soon has been drinking too much cloud Kool-Aid.

For more information about the BBRS study and the reports produced by Pricewaterhouse about the future of cloud and IT outsourcing, visit this page of the PwC web site. The HBR AS study is available at this page of the Microsoft web site.

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