What are the key benefits and issues associated with cloud computing?

Benefits

Faster, less expensive deployments. Often when adding a new user to your business, there are up-front costs – extra software licenses, costs of adding the user into various subsystems (logins, permissions, email, etc). Cloud computing can significantly reduce the time and expense required.

More flexible remote access. Because the computing services are hosted ‘in the cloud’, access is just as easy from work, home or Timbuktu. (Well, I’m not sure about Internet connectivity in Mali, but you get the idea!)

No more major upgrades. Servers getting long in the tooth and wearing out are the service provider’s problem, not yours. They take care of migrating workloads to newer hardware as required, and without cost to you.

Eliminates large capital expenditures. You don’t need to purchase the hardware and software licenses for your business. Instead, you pay rent each month based on the number of users and services.

Higher reliability? Hmmm. Maybe. If your current server(s) are managed by professionals, it’s likely they are giving good reliability now. And there have been several major catastrophes amongst cloud computing vendors, including Amazon EC2, BigPond, WebCentral and most recently Distribute.IT. However, vendors make the case that their services are very reliable…

Better backup and recovery? Again, with the service provider performing any needed backups and recoveries, in theory you don’t need to go to any trouble to get your data and systems restored. If you already have a solid backup and recovery system, it is unlikely that the added complexity of a major data centre and complex storage systems will add reliability or speed (see the above disasters for examples). However, if you don’t, it will be a step forward.

Issues

Information security and privacy. This is a biggie. You need to read the cloud computing agreements very, very carefully. Some actually go so far as to assert copyright over your data! See this analysis of the top ten clauses to watch when entering a cloud computing agreement. A recent announcement by Microsoft, that data stored by any American vendor is subject to the US Patriot Act regardless of local laws should be of profound concern. The Patriot Act allows the US government to access any and all data stored by any firm operating or headquartered in America, without notice to or permission from the owner of that data.!

International, political and economic problems. There are many issues here. What jurisdiction is your cloud computing agreement written for? If there are issues, will you have to contest in offshore courts? What happens if your cloud computing vendor is the victim of a soft economy in their country? What is their country’s attitude to data privacy? Can their security forces rake over your data? /p>

Continuity of service. See ‘Higher reliability?’ above.

Data migration (especially if changing providers). How easy will it be to have your data transferred to another cloud computing vendor or back in-house? In what format? How quickly? And at what cost? In a grab for market share, Microsoft has just announced that from July 1st, all data migrations onto their cloud platform, Azure, will be free. However they haven’t been so noble as to make data migrations away from Azure free!

You will be forced to upgrade from time to time. Cloud vendors have to contain their costs too, and can’t have every customer dictate what versions of software they will support. This means you will be forced to change versions (and even products!) at times that may not suit you.

Reliance on broadband connection. You will need a reliable, fast broadband connection to your workplace. All your business traffic is now going over that connection, such that if it fails or performs poorly, it will have a much bigger impact than in an in-house server scenario. This may add significantly to ongoing costs.

Still need desktop hardware and in-house network. In all scenarios, even virtualised desktops, you will still need desktop hardware at the user end. Something has to connect to those offsite resources. Don’t assume you will do away with this expense. You may, however, be able to do with less expensive desktop equipment.

Learn from Experience

In the aftermath of the recent Distribute.IT disaster, SmartCompany published an excellent article: Five lessons from the Distribute.IT hosting disaster. A very worthwhile read!

As well as lessons for consumers, there are some hard lessons for cloud computing vendors. Distribute.IT publicly confessed to “incalculable” damage to its business from the outage. It said it had “little choice” but to help customers transfer hosting and email to “other hosting providers”. And within two days of that statement, Distribute.IT was bought by NetRegistry.

Will you save money?

You will pay for the hardware, software and professional services you use. You may pay for it via rental rather than via a mixture of capital and recurrent expenditure, but you will pay. An obvious analogy is leasing a car. You will probably be financially better off buying the car, using it, maintaining and then selling it yourself. But you have to find the capital to purchase it or wear loan costs. And you will probably put a little more effort into the lifecycle process than if you lease the car. However, you will likely pay quite a bit more overall for a lease, albeit with some potential to reduce your own time involvement.

If you already use a professional IT service provider like The IT Department to take care of your IT infrastructure, you may already have the best of both worlds – the security, control and lower cost of owning your own systems and data, and the reliability and responsiveness of professional support and advice.

Finally – cloud computing does not have to be an all-or-nothing decision. We have already helped several clients move some part of their infrastructure to the cloud, while keeping other parts in-house, as their needs have dictated.

Please don’t hesitate to talk to your IT Department account manager if you would like a more specific assessment of the potential and pitfalls of cloud computing for your organisation.