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A Place in the Cloud

Cloud computing offers an enticing value proposition, but do the benefits justify the risks?

Even if cloud providers solve those critical issues, there are others. Right now the market is long on technology but short on services, which means that clients will need heavy-duty IT operations expertise. “Going to Amazon’s Web services is like going to the grocery store — you can bring home a lot of groceries but you still have to make dinner,” Novikoff says. And as companies move some applications, but not others, to the cloud, integration problems will arise. “No company runs just one or two business services,” explains Microsoft’s Wilkin. “I can’t put some of those services out into the cloud and expect the same level of integration as if everything was on the premises.”

Cloud computing won’t be the revolution that Internet adoption was, but the fact that it will take time to emerge shouldn’t discourage companies from exploring at least some facets now. The possibility of unwinding a decades-long investment in IT infrastructure in favor of a more flexible and nimble approach could even lead to that mythical IT/business alignment that companies have been chasing for years.

Vincent Ryan is a senior editor at CFO.

Peering through the Mist

Assessing the current reality of cloud computing

Hype: All of corporate computing will move to the cloud.
Reality: Low-priority business tasks will constitute the bulk of migration out of internal data centers.

Hype: The economics are vastly superior.
Reality: Cloud computing is not yet more efficient than the best enterprise IT departments.

Hype: Mainstream enterprises are using it.
Reality: Most current users are Web 2.0–type companies — early adopters.

Hype: It will drive IT capital expenditures to zero.
Reality: It can reduce the start-up costs (particularly hardware) for new companies and projects.

Hype: It will result in an IT infrastructure that a business unit can provision with a credit card.
Reality: It still requires a savvy IT administrator, developer, or both.

Cloud Computing Is:

  • Standardized IT hardware, software, and other products/services
  • Accessible via Internet protocols from any computer
  • Always available (in theory), and will scale automatically to adjust to demand
  • Pay-per-use (or advertising-based)
  • Virtualized; that is, it allows customers to provision, manage, and terminate services themselves

Source: Forrester Research

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