One of the most prominent IT trends to emerge in 2009 was cloud computing. It's a technology that has been wholly embraced by vendors, but businesses remain justifiably skeptical. Even IT pundits widely disagree about the future of cloud computing: Is it yet another thinly veiled attempt to resurrect the widely rejected era of the mainframe and thin computing, or is it the basis for an all-new type of application that represents the future of computing? In these tight economic times, cloud computing’s promise to cut costs makes it a compelling offering. So, what are today's vendors offering?
What Is Cloud Computing?
Cloud computing is an umbrella term for an Internet-based service that provides some type of essential service to the organization. The specific types of services vary widely. Common cloud computing services include Microsoft Exchange Server hosting, application offerings such as Google Docs, the lease of backup storage, and even relational database services such as SQL Azure. Typically, the vendor’s servers entirely host these services, which you access over the Internet.
However, some vendors—including Microsoft—have attempted to push a Software Plus Services model, in which locally installed software (e.g., Microsoft Office) interacts with a web-based service (e.g., Windows Live Office). Customers typically pay the cloud computing vendor for the use of these services. Vendors usually offer some type of SLA guaranteeing specific levels of uptime and often a range of acceptable service-level performance. The types of SLAs vary with the type of service and often the level of service that the customer pays for.
The Silver Lining
Cost cutting is the primary benefit that most vendors cite for cloud computing. Cloud computing essentially lets you lease esential computing services from a third party and therefore avoid the capital expenditures necessary to support these services in-house. Leasing services instead of buying and building them lets a company save in infrastructure costs, licensing costs, and the costs for the IT personnel required to run and manage those services. Other advantages of cloud computing services are global accessibility, immediate deployment, and easy scalability. Because they're Internet-based, you can access cloud services wherever you have an Internet connection. In most cases, there are no deployment concerns. You can access the cloud-based services immediately, without any installation hassles. And cloud computing vendors have vast computing infrastructures that support very high levels of scalability. If you need additional scalability, it’s often as easy as simply paying for the next level of service.
Perhaps the biggest advantages of cloud computing go to the vendors that offer the solutions. Unlike traditional software sales, cloud services use a subscription-based income model. This model lets vendors sidestep all the packaging and deployment costs typically associated with selling on-premise software. Subscription-based income is the Holy Grail for software companies because it offers a predictable income model that isn't tied to the constant release of new products.
The Dark Underbelly
There’s certainly merit to the notion of cloud computing, but there’s also a dark side. The first concern is availability. Although the Internet and most of the involved websites are pretty reliable, the truth is that they all have downtime. When everything works, it’s all transparent, but an Internet connection has many working parts, and that last mile can often be the most troublesome. Some downtime is inevitable. The amount that’s acceptable depends on the type of service. For an application such as Hotmail or backup storage, high availability isn’t really a vital concern. For line-of-business (LOB) applications that your business depends on, it is. The SLAs of cloud computing vendors typically offer some amount of free services in the event of downtime.
Another concern is performance. In most cases, you’re buying into an existing computing infrastructure, but you're also sharing that infrastructure with many other customers. A shared infrastructure might provide slower performance during peak usage times than you might expect. Again, for performance-sensitive services, look for SLAs that offer guarantees of acceptable performance levels.
Cloud computing also comes with potential security concerns. These solutions store your confidential data on servers that are owned by another company. Your data isn't on the premises. That might or might not be a concern. However, as Tom Casey—general manager for SQL Server business intelligence—pointed out in his recent interview with SQL Server Magazine, security hasn't been a problem with most services. For example, he pointed out that many companies have successfully outsourced payroll through Automatic Data Processing (ADP) or other providers for many years and have experienced no unacceptable security problems with sensitive data.
Another area of concern is application integration. Integrating applications that are running in boxes sitting together in the same rack can be difficult. Integrating existing processes with external services adds another hurdle. Finally, choosing the correct vendor for your cloud computing services is another complication. You certainly don’t want your cloud computing vendor going out of business—at least not if you have critical business applications that depend on their services. Big companies such as Amazon, Google, and Microsoft aren’t much of a risk, but cloud computing is an emerging technology, and many smaller vendors will be vying for a piece of the cloud.