Cloud Computing: got your head or your business in the cloud?

To cloud compute or not to cloud compute?

Not only has cloud computing become a phenomenon but it has also become the rage as companies are racing towards its adoption, as seen during my attendance at the Cloud Computing World Forum in London. However, cloud computing still isn’t for everyone right now and there are a risks and complications that go along with migrating towards the cloud.

Advantages of the cloud

The cloud provides some advantages that companies must assess when deciding to move to the cloud. Below is a list of some common advantages obtained when migrating to the cloud:

1. Unified communications: Most companies require integrating their technologies to provide a unified communications stream, usually as a result of multiple devices such as laptops and cell-phones. Additionally, this provides device and location independence allowing for seamless integration and mobility for users.
2. Collaboration: Companies are realizing everyday that collaboration can share and foster new ideas within the workplace and can speed up processes through channels that foster communication.
3. Scalability and Agility: Growing companies require the flexibility to be able to ramp up their service requirements without having to redesign the whole infrastructure, platform or service. The cloud allows companies to grow without having to worry too much about technology related growing pains. Moreover, cloud services can improve infrastructure and capacity utilization to improve resource efficiency, reliability and performance.
4. Reduced costs: Cost reductions can be achieved through pay-as-you go services which create variable costs associated with use rather than sunk fixed costs, helping smaller businesses grow. Additionally, the IT human capital and infrastructure required for cloud services can be outsourced to these service providers and their time can achieve economies of scale to benefit all participants.

Cloud Computing Risks

1. Security: The biggest risk is definitely security. During the conference, all the speakers were highlighting how user and business adoption is particularly inhibited by fears of data leakage and other privacy breaches.  Data stored in the cloud may poses threats both from hacking and from lost retrieval. Imagine that sensitive company document you are working on is stored in a location very far away that could be hacked by a competitor, or you lose your connection and are unable to access it when you need to. Moreover, data would become highly localized on servers, allowing countries or organizations to seize and restrict the flow and access to information.
2. Migration: Standards are currently lacking between companies using cloud services, so integrating databases becomes a nightmare unless API’s are used. However, these API’s need to be constantly maintained and upgraded, which adds costs and time to service provisions. The API’s may also not be openly available to use between private software suppliers.
3. Consistency: A chain of tech support with similar service levels needs to be maintained and provided across all cloud services in order to provide complete service provisions to clients; otherwise service gaps occur.
4. Pricing: Support contracts usually are based on a price per head, but in cloud environments it doesn’t make sense. Thus, support pricing migration towards per server load is usually a better indicator, as it is a measure of the uptime quality.
5. Continuity of service: The cloud computing conference speakers kept re-iterating: “Focus on service and not infrastructure.” When outsourcing services using the cloud, you can save on costs but you trade off flexibility. Usually Service Level Agreements (SLAs) are negotiated between a service provider and a company to make sure there are certain guarantees for service delivery. In general, companies that rely on real-time services usually take the biggest risks when migrating to a cloud where there may be lags or downtimes. As such, the cloud doesn’t operate under SLA’s but instead measures its service guarantees with uptime.

In particular, if Skype has a 95% up-time rating, and consumers are used to phone lines with 99% availability, then a 4% difference wouldn’t seem like much, but it can have a huge cost to service perception and consequently brand perception.  Skype responds well to such a situation by asking users to rate all their phone conversations in order to improve uptime and service quality. However, despite their own service initiatives, Skype’s recent crash highlights how errors in the cloud can result in long delays along with other unintended consequences.

When to adopt cloud computing?

Most companies are moving towards the cloud in at least some areas of their business. In some cases, not moving to the cloud could risk falling behind in the competitive marketplace in terms of innovation, cost structures and service offerings. However, in other cases, real-time service providers may not be ready to upgrade to the cloud until it is ready for their offerings. In all cases, determine what stage your business is in, what are the costs and risks associated with the cloud and the benefits returned.