Editor’s Note: Senior Member Alexander Pasik is chief information officer of IEEE. To read more about Pasik’s view on cloud computing, check out “A View Inside the Cloud.”
Sometimes an emerging technology is so innovative and counterintuitive that our society is struck with awe combined with skepticism—either the awe overcomes the skepticism and the technology radically alters the state of the art, or the technology struggles until it either dies or survives the hurdles. However, sometimes an emerging technology is neither awesome nor suspicious, but is so obviously the right answer that it is only a matter of time before it inevitably permeates our society. Cloud computing is in this latter class—its characteristics of economic value, technological elegance, and business empowerment all combine to make it the clear architecture of choice for the bulk of information technology needs of the 21st century.
Cloud computing is the synthesis of technologies that had their origins in the 1960s, 1990s, and 2000s: time-sharing, Web browsers, and multitenancy. As such, there is really nothing new about cloud computing that inspires awe, or that creates much skepticism. Indeed, cloud computing does provoke some skepticism, but that is mostly inspired by inertia and fear, rather than being based on real economic or technical foundations.
The accelerated emergence of cloud computing in the last few years is the result of the pressure of economics, maturing technologies, and solid business solutions on the obstacles of inertia and fear. What are the economic, technological, and business solutions that cloud computing offers? What are the components of the inertia and fear that must be overcome?
Economies of scale are derived from leveraging costs across an increasing number of users. Cloud computing is characterized by just such leverage. Indeed, as cloud solutions range from shared infrastructure (Infrastructure as a Service—IaaS) to shared platforms (Platform as a Service—PaaS) to fully shared applications with multitenancy (Software as a Service—SaaS), the leverage increases. The savings associated with the shared services provides for both lower total cost of ownership for the clients and profitable business models for the providers.
Ultimately, cloud computing has been enabled by four core technologies: the inexpensive high-bandwidth network connectivity of the Internet, the proliferation of standards-based user interfaces with HTML browsers, server and storage virtualization, and secure multitenant enterprise applications. Together, these technologies enable the delivery of user-friendly (meaning zero training) solutions that are designed, developed, deployed, and maintained by centrally organized providers and consumed by end users anywhere in the world.
Business solutions fall into three categories: industry-independent applications (e-mail, accounting, customer management), industry-specific applications (medical records management, manufacturing resource planning), and competitive differentiating applications (eBay’s auction algorithms, Netflix’s recommendation algorithms). Cloud providers of SaaS solutions focus primarily on the first category because it encompasses the broadest market with the most leveraged solutions requiring little to no customization. Cloud providers have emerged with industry-specific SaaS as well. But even those custom competitive differentiators can be implemented on IaaS or PaaS cloud computing platforms to provide some of the economic benefits.
But in order to take advantage of the benefits presented, inertia and fear must be addressed.
Organizations that have invested heavily in on-premise technologies and processes are reluctant to give them up. The transition process is arduous, and often the very people required to champion the change feel that they are the most at risk of losing power. Thus, the adoption of cloud solutions must be approached in conjunction with thorough total-cost-of-ownership analyses. It behooves CIOs to perform such analyses and champion the transitions based on them—if they do not do so, it is at their peril, as others (both in their organizations and in those of their competitors) demonstrate the savings.
The fears that accompany proposed cloud transitions are often centered on data security and privacy. Organizations convince themselves that physically locating their data within their own managed locations delivers better security and privacy than cloud-based alternatives. Although in rare cases this belief may very well be true, in most cases it is not. Well-run organizations will invest most of their time and capital into their core competencies—automobile manufacturers in their cars, pharmaceutical companies in their drugs. As such, best-in-class cloud providers invest heavily in data security, and typically far more than their client organizations can or do. Furthermore, clients adopting cloud services must negotiate contracts that provide them with their requirements with regard to privacy; best-in-class cloud providers will readily accommodate their clients’ privacy concerns.
With cloud computing, the question is not if, but when. Organizations that avoid it are doomed to be working less efficiently than their competitors and will be forced to make a late transition—which perhaps may be too late.