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Monday, June 16, 2008

Key cloud computing concerns by CXO's

Key cloud computing concerns by CXO's attending the Enterprise 2.0 Conference in Boston were addresed in a June 9th panel of executives from Google, Amazon Web Services (AWS), and Salesforce.com. A June 14th Information Week Article by Rob Preston summarized them as:

  • Security.

It's still top of mind for most customers. The vendor argument usually comes down to scale and centralized control. Few enterprises can allocate the money and resources that companies such as Amazon, Google, IBM, and Salesforce do to secure their data centers. Data stored within the cloud, the vendors argue, is inherently safer than data that inevitably ends up on scattered laptops, smartphones, and home PCs.

  • Vendor lock-in and standards.

The cloud vendors emphasize the openness and extensibility of SOAP, XMPP, and other Web services protocols. AWS's Adam Selinsky notes that the vendor's IT infrastructure services require no capital or other up-front investments, and Ross Piper of Salesforce.com points out that Salesforce's app service customers can start with as few as five users and commit gradually.

  • Regulatory and legal compliance.

Organizations looking to move some of their data into the cloud must navigate a labyrinth of vertical (HIPAA, PCI, FERPA, etc.) and horizontal (SOX, Patriot Act, FISMA, etc.) rules on where information must be stored and how it must be accessed, especially for e-discovery, and most of those rules are open to interpretation. The cloud vendors offer no pat answers. They can't change the laws and, in seeking clarity for potential customers, they, too, get five opinions for every four lawyers they consult.
  • Reliability.

Mary Sobiechowski, CIO of health care advertising and marketing agency Sudler & Hennessey, questions whether the cloud renders the capacity for transmitting the kinds of large files typical in an agency environment. "There's bandwidth issues," she says. "We also need real fast processing."

No matter how robust their technology infrastructures are, the cloud vendors experience outages. All the major cloud vendors point to their service-level agreements, which, of course, compensate customers for service disruptions, not for lost business. In the end, their value proposition is this: Is your application, database, storage, or compute infrastructure any more reliable than theirs? And even if it's comparable, wouldn't your IT organization rather spend its time on matters that make a competitive difference instead of managing and upgrading servers, disk arrays, applications, and other software and infrastructure?

  • Total cost of ownership (or rental)

The cloud vendors make an excellent case that it's cheaper to subscribe to their services than to buy and run premises-based hardware and software. Pay no up-front costs; pay for only what you use, with the ability to scale up and down quickly; and take advantage of the vendors' huge economies of scale. AWS's storage service, for instance, costs just 15 cents per gigabyte per month. With subscription software services, the cost equation is less clear. In most cases, it's at least a wash.
  • Choice

Options grow every day. Salesforce's Web platform, Force.com, Google, Amazon, EMC, IBM, Microsoft, Sun, and other major players are ramping up a range of services, and scores of tech startups are embracing the subscription approach.
  • Long-term vendor commitment.

The cloud vendors like to compare the current IT provisioning model with the early days of electricity, when companies ran their own generators before moving to a handful of large utility providers. Northeastern University CTO Richard Mickool questions whether high-energy, high-innovation companies such as Google and Amazon will lose interest in selling commodity, electricity-like services.

The vendors insist they're in this business for the long term, and that customers are warming to the movement. Says Google's Chandra: "It's not a matter of when or if the cloud computing paradigm is coming. It's a matter of how fast." That depends on how fast vendors can assuage customers' concerns.