Cloud Computing: Whose Crystal Ball is Correct?

Are private clouds a pipe dream for all but a few enterprises?'s Bernard Golden sorts through the newest cloud predictions for enterprise IT's future and shares some practical advice.

By Bernard Golden
Mon, August 02, 2010

CIO — Last week brought a spate of interesting—and contradictory—stories and research reports about how enterprises are or will embrace cloud computing, topped off by a report by Forrester analyst James Staten that concludes that for all the talk about private clouds, they're a pipe dream for all but a few enterprises.

Kicking off the parade of news was a survey sponsored by Savvis. The survey asked 600 IT and business decision makers about their plans for cloud computing. The results showed that 68 percent of those surveyed thought that cloud computing could help organizations recover from the current economic downturn; respondents expected cloud computing to decrease IT budgets by 15 percent. A full 70 percent of of IT decision makers are using or expect to be using an enterprise-class cloud within two years, the Savvis survey said.

Interestingly, 76 percent of survey takers who fell into the category of business decision makers see the "lack of access to IT capacity" as a barrier to business progress. I addressed the way that cloud computing can aid business agility in my blog last week and noted that this type of agility would, ultimately, be the most crucial business-oriented deliverable of the cloud. I also provided a link to our checklist (registration required) to evaluate if cloud computing could aid your business agility.

Given that most IT funding flows from business units, this implies to me that the ultimate beneficiaries of cloud computing (business units and their applications) are eager for quicker access to compute resources as a way of helping them solve their business problems.

Next up was an article in InformationWeek titled "The Why and How of Private Clouds." IW performed its own survey and found that 58 percent of its survey takers are either currently using or plan to use a private cloud. The primary reason IT groups aren't implementing a private cloud today is "no business need," this survey said. Cited as an example is Indiana University, which provides a portal for users to request IT resources, but then provisions them manually, making them available within half a day. Among the survey respondents, the amount of money devoted to implementing a private cloud varies, with over one-third (38 percent) setting aside no specific budget for cloud implementation (15 percent say they devote over 20 percent of their budget to implementing private clouds, with another third saying they spend 10 percent or less).

Then I turned to an interview in Forbes with Mark McDonald of the Gartner Group (Gartner had also done its own survey on the topic of cloud computing as well). This article was really fascinating: Gartner divides IT groups into three buckets: rich, poor, and stuck in the middle.

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