No cloud in sight!

The conventional wisdom at the beginning of ’09 was that the economic downturn would catapult cloud adoption but that hasn’t quite happened. This post explores trends and possible reasons for the slow adoption as well as what the future may hold.

A lot has been written in the past few days about Cloud Computing adoption based on a survey by ITIC (http://www.itic-corp.com/). At the time of this writing, I haven’t been able to locate a copy of this report or a link with more details online but most articles referencing this survey quote Laura DiDio as saying,

“An overwhelming 85% majority of corporate customers will not implement a private or public cloud computing infrastructure in 2009 because of fears that cloud providers may not be able to adequately secure sensitive corporate data”.

In another part of the country, structure09 had a lot of discussion about Cloud Computing. Moderating a panel of VC’s, Paul Kedrosky asked for a show of hands of VC’s who run their business on the cloud. To quote Liz Gannes,

“Let’s just say the hands did not go flying up”.

Elsewhere, a GigaOM report by George Gilbert and Juergen Urbanski conclude that leading storage vendors are planning their innovation around a three year time frame, expecting adoption of new storage technologies to coincide with emergence from the current recession.

My point of view

In the short term, services that are already “networked” will begin to migrate into the cloud. The migration may begin at the individual and SMB end of the market rather than at the Fortune 100. Email and CRM applications will be the poster-children for this wave.

PMCrunch also lists some SMB ERP solutions that will be in this early wave of migration.

But, this wave will primarily target the provision of application services through a different delivery model (application hosted on a remote server instead of a corporate server).

It will be a while before cloud based office applications (word-processing, spreadsheets, presentations) become mainstream. The issue is not so much security as it is network connectivity. The cloud is useless to a person who is not on the network and until ubiquitous high bandwidth network connectivity is available everywhere, and at an accessible and reasonable cost, the cloud platform will not be able to move forward.

We are beginning to see increased adoption in Broadband WiFi or Cellular Data in the US but the costs are still too high and service is still insufficient. Just ask anyone who has tried to get online at one of the many airports and hotels in the US.

Gartner highlights five key attributes of Cloud Computing.

  1. Uses Internet Technologies
  2. Service Based
  3. Metered by Use
  4. Shared
  5. Scalable and Elastic

Note that I have re-ordered them into what I believe is the order in which cloud adoption will progress. The early adoption will be in applications that “Uses Internet Technologies” and “Service Based” and the last will be “Scalable and Elastic”.

As stated above, the early adopters will deploy applications with a clearly defined and “static” set of deliverables in areas that currently require the user to have network connectivity (i.e. do no worse than current, change the application delivery model from in-house to hosted). In parallel, corporations will begin to deploy private clouds for use within their firewalls.

As high bandwidth connectivity is more easily available adoption will increase, currently I think that is the real limitation.

Data Security will be built along the way, as will best practices on things like Escrow and mechanisms to migrate from one service provider to another.

Two other things that could kick cloud adoption into high gear are

  1. the delivery of a cloud platform from a company like Akamai (why hasn’t this happened yet?)
  2. a mechanism that would allow applications to scale based on load and use the right amount of cloud resource. Applications like web servers can scale based on client demand but this isn’t (yet) the case with other downstream services like databases or mail servers.

That’s my point of view, and I’d love to hear yours especially in the area of companies that are addressing the problem of providing a cloud user the ability to migrate from one provider to another, or mechanisms to dynamically scale services like databases and mail servers.

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