The short and probably most concise answer to this question is: ‘resource allocation’.

For small businesses cloud computing (AKA Infrastructure as a Service) is a fairly new delivery model of Information Technology Services. In a nutshell, it enables using virtual servers online to host IT Services (such as email, document management, and database applications) without having to invest in or manage an in-house virtual server infrastructure. Furthermore, it allows increasing infrastructure resource needs (drive space, memory, etc) on demand. Cloud computing can be seen as a logical evolution in outsourcing IT services.

Some examples of companies offering cloud services and computing include: Google App engine, Amazon Web Services, Go Grid, Terremark, and Microsoft Office 365. Although, despite all of Microsoft’s talk about cloud computing, they will probably fight hard to avoid killing their back office server products with cloud offerings.

Small businesses typically use an in-house server for remote access, file sharing, database systems, email, and web hosting among others. Today most of these services can easily be obtained over the cloud without sacrificing functionality. However, so far only an estimated 2% of businesses with fewer than 100 employees are using cloud computing, according to a May 2009 report by Forrester Research.

Why is the adoption of cloud computing so low? To answer this question first I will explore some of the advantages and disadvantages of cloud computing. I will then answer a Key Question that both IT companies and small business face: will it eliminate the need for IT Service companies? And finally, I will conclude by expanding on why adoption is so low.

Advantages and Benefits

  • Low upfront costs. You don’t need to invest huge amounts in your own servers. A good comparison is when you decide to lease a car as opposed to buying. The initial cost is low, but it adds up in the long run. You will still need IT service to develop, enable, configure, and support the infrastructure. However, initial Infrastructure investments are freed. An entry level Cloud computing solutions is $500/month excluding any software license costs.
  • Easily Scale. you are able to increase computing capacity as you need it. No need to configure or purchase new hardware. Just pay for the extra capacity and it is enabled instantly.
  • Easy Deployment: because cloud computing is a virtualized environment, it is easy to clone a pre-configured system and deploy it in a new environment. In essence, you get the advantages of virtualization without the huge initial investment.
  • Failover Capability: failover capability is available typically at an extra cost. This allows for a more reliable and resilient network environment.

Disadvantages

  • Integration: Not all applications are ready to reside on a cloud. Furthermore, moving applications to the cloud can demand the integration of existing local networks with cloud networks. At the worst this could mean that information does not flow smoothly from one point to another.
  • Loss of Control: This means no control over one of a businesses most precious assest: data. In some cases it is easy to export information. In others, it is nearly impossible to extract information from the cloud application.
  • Security: security, privacy and compliancy is still difficult for cloud solutions. Especially for public cloud services. Physical location of hardware and software is unknown. Site inspections and audits are hard. Failure to compliance is a potential issue. (i.e. HIPAA, SOX, PCI, SAS 70 and audits).

Will Cloud Computing eliminate the need for IT service?

Certainly not. It will shift IT Professionals attention away from infrastructure deployment into developing, enabling, supporting, and managing services. Shifting attention from infrastructure can allow teams to focus more on the strategic impact of IT on the business.

Conclusion

I would say that adoption is mainly low, due to lack of knowledge and understanding of what the cloud is and what it can do in terms of efficiency and savings. I believe it is not as much a question of integration but rather a question of time.

For an in depth study by Gartner please visit: http://tinyurl.com/5symafv

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