Cloud Computing and the New Normal

As the "new normal" of the post-recession economy stretches before us, cloud computing services are become more widely considered and adopted by large mainstream enterprises. Many organizations just last year refused to accept the premise and are now enthusiastic advocates looking forward to a new future of computing flexibility and choice.

As the "new normal" of the post-recession economy stretches before us, cloud computing services are become more widely considered and adopted by large mainstream enterprises.  Many organizations just last year refused to accept the premise and are now enthusiastic advocates looking forward to a new future of computing flexibility and choice. 

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And with a new class of complex enterprise buyers entering the market, a higher standard of performance and reliability is being applied to the purveyors of cloud services.   Yet to no one's surprise, the increased exposure of today's commercial cloud services to the rigors of top-tier enterprise requirements is exposing the immaturity of cloud computing, and the way forward seems more like a long haul than a quick sprint.

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Like every major technology emerging before it, the excitement of cloud computing has been dampened by the inevitable realization that real progress will require significant effort and careful steps forward.  There is indeed no magic bullet or free lunch.  But the need to identify better ways to deliver IT services requires a serious look at increasingly strategic uses of cloud services.

The architectures used by true cloud computing platforms -- rapid scalability, flexibility, resource pooling and usage-based pricing -- are significantly different from what are now deemed "classic" IT computing models. With these differences come the opportunity for significant gains in asset efficiency, capital utilization and business responsiveness.   

The price of progress, however, is more uncertainty, with an associated loss of control. The old rules of operations seemingly do not apply, and the new rules have not been established. The previously predictable and steadfast world of enterprise IT is now an unexplored territory of new and evolving services. The rate of change is higher than has been experienced in many decades. Many IT veterans are skittish of unproven technology, but feel they have no choice but to move forward, regardless of unknowns. The prerogatives of the "new normal" require a rebalancing of risk and rewards for enterprise IT, and a relearning of operational tactics to maintain the business.

The journey to cloud normality

As the most sophisticated enterprises take a serious look at cloud technologies, the technical shortcomings are more difficult to overlook.   The list of "enterprise class" features supplied by the major cloud service providers is growing, but still lags the expectations and requirements of the high end of the market. Certain advanced features, which are assumed to be part of the enterprise checklist, may not be part of the current crop of cloud services. Capabilities cited as high on the "must haves" include:

* Predicable service levels for system availability, reliability or responsiveness.

* Understanding of overall system capacity limitations, physical or otherwise.

* Sophisticated systems monitoring, metering and performance reporting, visible to enterprise IT.

* Operational visibility into backup, data archiving and disaster-recovery capabilities.

* Security systems that integrate with enterprise single-sign-on and identity management.

* Integrated problem, change and configuration management systems for application support.

In addition to these fundamental operational characteristics, cloud computing services may also be limited in their ability to provide the mundane yet critical functions that are required for business, including:

* User-friendly automation for self-service provisioning, in a reliable and security environment.

* Granular usage tracking and reporting to back-office accounting systems.

* Consistent pricing mechanisms that allow budgeting, charge-backs and confident forecasting.

* Contractual clarity, which reduces the negative surprises of unexpected billing and extra charges.

* Clear pricing models that allow for confident purchases over a longer term, based on simple-use cases.

In order for cloud computing to meet the needs of the "new normal", these high-end capabilities must be incorporated into standard services models. The performance standards of sophisticated enterprises are much higher than the capabilities of most cloud service providers.  Yet the message in the marketplace frequently overlooks this reality, and expectations of complex enterprises are not being met.

Taking the spin down to size

Frequent misdirected marketing and media messaging about the economics of cloud computing is also running askew of on-the-ground reality.   It is well reported that smaller companies, startups and cash-strapped nonprofits are the big early adopters of public cloud computing services. Any number of cloud service providers will gladly report the vast numbers of "enterprise customers" who are rapidly joining their burgeoning ranks -- neglecting to mention the tiny size of their typical subscribers, which generate little or no revenue for the cloud provider. Growth of cloud computing adoption is indeed rapid when the price of entry approaches zero for the smallest subscribers.

Big enterprises, on the other hand, typically have a large installed IT base, significant purchasing power and economies of scale, which provide attractive economics for capital expenditures. The economics of cloud computing services must be significantly more attractive to compel a switch. Unfortunately, contrary to the marketing spin, cloud computing is not nearly as advantageous for larger enterprises compared to smaller companies from a cost perspective. The advantages must therefore lie elsewhere.

The real advantage for large enterprises is not cost savings, but increased flexibility and responsiveness to the business. Companies are finding that their real-world experience at high scale shows only moderate cost savings, but significant productivity, time to market, and efficiency gains. This can be a pleasant surprise to many big enterprise adopters -- as the benefits touted by the media and vendors fail to materialize, they find other advantages which are more mundane but ultimately more beneficial to the business.

Longtime observers of IT are not surprised by the inability of services companies to accurately foresee the utility of their offerings. It is only through the iteration of real enterprise users in multiple unpredictable settings -- and creative deployment outside of design parameters -- that actual business value can be determined. Only now are the most sophisticated enterprises beginning to deploy their creative energies to explore the potential of cloud computing.  There will be many surprises, reappraisals and innovations, which are yet to be discovered.

In these early days, cloud computing providers would be well served to learn from their customers, and incorporate real world feedback into both their marketing spin machines as well as their product roadmaps.  There is nothing like a dose of reality-based marketing and services evolution to increase ones credibility in the ranks of high-end enterprise users.

As last year's new phenomenon becomes this year's standard, the common gripes of sophisticated users are best described as "expected immaturities", and do not indicate a loss of faith in the cloud computing model.   Experienced hands understand that the cloud market is in its early phases, and they have settled in for the long haul, planning to invest and evolve the new model to boost its usefulness and efficiency, while bracing for the uncertainty implicit in the transition.    

As the bar is raised for sophisticated enterprise class computing for cloud services, there will be no shortage of serious critiques. The iteration of innovation is a bumpy process -- and that is certainly not a surprise.

Read more about data center in Network World's Data Center section.

This story, "Cloud Computing and the New Normal" was originally published by Network World.

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