Forecast 2010: Cloud computing: Love it or hate it?

Is cloud computing the next best thing in IT, or is it overhyped and underdelivering? Here's what both sides have to say.

It seems that IT leaders are warming up to cloud computing, with its promise of elasticity, utility-based billing, multiple storage locations, and the ability to pull data directly from storage devices. In fact, cloud computing ranked second (behind virtualization) as the technology most beta-tested in 2009, according to Computerworld's 2010 Forecast survey of more than 300 IT executives.

But does that mean cloud computing is destined for success? Not so fast, said nearly half of the IT executives polled. They said they are unlikely to try cloud computing this year and ranked it as the No. 1 overhyped and underdelivering technology. What's behind this love-hate relationship? We asked people on both sides of the debate.

Puffing up the cloud

For every naysayer, there's another user who can't get enough of cloud computing'sbenefits.

Cloud initiatives are high on Jessica Carroll's priority list for 2010 at the United States Golf Association. Last year, the Far Hills, N.J.-based USGA signed on with IBM.

"We're able to do online backups nightly into the cloud for our mission-critical data," says Carroll, who is the USGA's managing director for information technologies. "But we were looking for that extra added safety net completely off-site -- at a different location, outside of our environment -- where if we have a disaster, we can go someplace, set up and get our data back."

But the cloud feature that does the most to help Carroll sleep at night is the e-mail continuity component. "E-mail is probably the lifeblood of what we do. Communication and outreach is who we are. If we don't have e-mail, it's a real kink in our business day," she says. "With cloud backup, if we have a situation where our internal systems go down, we can, through the Internet, flip over to our Web-based e-mail system via IBM, using our own e-mail addresses, and the staff barely would even know what happened."

Now Carroll is eager to take cloud computing to the next level. She'd like to reduce the number of servers in the USGA's data center -- it currently has 70 -- and try out cloud-based testing and development.

This year, she will be looking at deploying cloud-based test environments that the USGA would pay a monthly fee to use. "[The providers] are responsible for setting up your environment to your specifications. Can they do that in a faster, more economical way than we can internally? I think the answer is going to be yes," says Carroll. "And if this works for the testing and development environment, do these concepts work for your production environment? I'm anticipating the answer is going to be a mix."

She cautions would-be cloud users to study all contracts and scrutinize the hosting vendor's environment and operating procedures. What is its security policy? What is its disaster recovery plan? Is it willing to share that information with you and put it in a contract?

"This is where I've seen the enterprise-class vendors emerge real strong because they can give you that information and have strong policies and practices they can share with you," Carroll says. "When you are signing with a hosting vendor that is pay-by-month that you found on the Internet -- are you going to be able to get that kind of detail? From what I've experienced so far, that answer is no, and for me that's a red flag."

Speedy Solution

The New York State Office of Temporary and Disability Assistance is hoping that cloud computing will help it handle the 30% jump in demand for its services over the past year as a result of record job losses in the state.

"Our data center is running out of capacity," says CIO Daniel Chan, "and we don't really have enough staff to do the work that we need to get done. So the idea is, can we do something creatively to outsource some of these computing needs?" Chan says he would like to use the cloud for application and development testing first, and then possibly offer Web-based applications to users.

The state agency's current technology is at least one generation behind, Chan says, because the need to comply with government policies on security and other matters leads to delays in deployments. What's more, IT costs are higher than they should be because by the time purchases are approved, the technology is dated, but the state is still paying what it cost when it was new.

If the agency did testing in the cloud, Chan says, it could get systems up and running faster because it would be able to quickly set up multiple test environments, allowing many employees to test concurrently -- on more current equipment that would be less costly because it wouldn't have the bells and whistles of a production environment. "We don't need that same level of robustness" as in a production environment, Chan says. Right now, "in most cases, we pay for the functionality we really don't need for test and development," he explains.

With cloud computing, the agency can stay up to date technologically, Chan says. He plans to launch the agency's first cloud project in the second half of this year. "If we can demonstrate that we're saving the taxpayers money, I'm sure we can get the procurement agency on board," he says. "From a business perspective, it's a very compelling story."

The American Bible Society uses Amazon.com Inc.'s cloud services for 80GB to 100GB of Web files, but that's just the beginning, says CIO and Chief Technology Officer Nick Garbidakis. The Manhattan-based organization plans to use cloud services for some disaster recovery and storage, but Garbidakis says he will move more data to the cloud when servers or equipment needs to be replaced, and he will push out more when bandwidth becomes more affordable for the nonprofit group.

"Any deployment we do, any change of service providers, usually we do it at a time we are ready to retire some five-year-old servers, for example," Garbidakis says. "We would not go out and try to do it while some new servers are deployed already."

The data going to the cloud will be secondary files, "so if it takes an extra second or two to access, it's not a big problem," he says. "I wouldn't push out any of my financial data or primary data right now."

Garbidakis says he expects to move nontransactional systems to the cloud within a year and more heavy-duty applications to the cloud in five years -- "if hardware, software and management costs go down."

Gene Ruth, a storage analyst at Burton Group in Midvale, Utah, says his firm's big clients are interested in cloud computing, but they aren't moving production environments there yet. "I've heard plenty of people try to pick and choose what might be an interesting application for cloud storage," such as archiving or creating access points for contractors in development teams who don't need to use data inside firewalls, he says. "It's an emerging market," Ruth says. "It's not a done deal by a long shot."

Bursting the bubble

Information technology leaders who want to burst the cloud bubble offer arguments like these: Applications for their industries don't yet exist, they can't justify the cost, or cloud computing just isn't ready for enterprise use.

"Cloud computing is a solution looking for a problem. I don't need it right now," says Clarence White, CIO at the Western U.S. branch of The Salvation Army in Long Beach, Calif. One of the largest nonprofit organizations in the world, The Salvation Army has more than 100TB of active data, and its servers process tens of millions of transactions annually. White says he prefers to maintain tight control of his data and likes to have the ability to cross-reference information from different applications. "I haven't yet seen a cloud model that would facilitate my ability to quickly mine my data for business intelligence," he says. "I could be completely wrong, but I haven't seen it."

He also says that cloud computing's other potential uses -- as a means of providing scalable storage, safer disaster recovery or more easily deployed test environments -- have already been addressed in today's data centers with virtualization technology and storage-area networks.

White says he might consider cloud computing "when applications for my industry type are more mature and when the plumbing is mature enough that it feels as if I have local access to my data."

"I think it's overhyped," says Melvin Evans, IT director at Hand Arendall LLC, a Mobile, Ala.-based law firm. "It still sounds better on paper than it does in the real world."

He and his firm's business leaders grew skeptical about the cloud after the much publicized outages suffered by Google Inc. and other providers of hosted IT services in 2009. What's more, the law firm sees legal holes in many vendors' service-level agreements. "The vendors out there tout 95% to 99.9% uptime, but the way it's worded, there is no way you're going to get credit or reimbursement for a small amount of downtime," Evans says. "When the guarantee is worded with so many loopholes, I'll never be able to see that guarantee enforced."

Mike Wright says that in the heavily regulated financial services industry, strict mitigation requirements make cloud computing unappealing to small and midsize banks like the one he works for.

Beyond, say, a document-imaging application, "I can't think of any application that would benefit us for this type of a medium-size business," says Wright, vice president and IT director at HomeTown Bank, a community bank based in Roanoke, Va. "There are certain things that we could virtualize, but we would have to have control over and ownership of the hardware. It circles back around to risk mitigation."

Cloud computing may seem overhyped because so many marketers are jumping on the bandwagon. "To make it seem bigger than it is, many people are including everything they can in [the term] cloud," says Michael Peterson, president of Strategic Research Corp., an IT research and consulting firm in Santa Barbara, Calif. He says he thinks of true cloud computing functions as pre-existing grid-style compute-and-storage services, tightly coupled remote compute-and-storage services that are remote but look local, and hosted computing services.

Functions that shouldn't be considered cloud computing, says Peterson, include remote delivery of everyday data center services such as replication and disaster recovery, routine Web 2.0 services, application service providers' offerings and social networking.

Deciphering the meaning of the term cloud would help the industry "get a handle on adoption," he adds.

Collett is a Computerworld contributing writer. Contact her at stcollett@aol.com.

Tags Forecast 2010cloud computing

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Stacy Collett

Computerworld (US)

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