Is cloud computing coming off the rails?

Is cloud computing coming off the rails?

Is cloud computing coming off the rails?2

IT | John Tate | 5 Sep 2012

The IT industry is overpromoting the benefits of cloud computing, warns John Tate.

I live near a railway line and when my children were young I used to take them to see the trains.

Watching from a bridge, we first became aware of an approaching train by crackles and creaking noises on the line. Seconds later you could see the train approaching in the distance. Getting closer and closer, it looked like it was going to come right on top of us and smash the bridge to pieces. We all stood in terror and then enjoyed the relief as the train passed safely below.

Full throttle

The IT industry hype-machine has similarities with this spectacle. Right now, the phenomenon of ‘the cloud’ is at full throttle. For those not familiar with this term, the cloud is all about running your applications and storing your data online.

There are a cast of many that make up the train. The IT suppliers are the drivers; the media and blogging community provide the fuel; while the end-users are the customers who experience what is really happening.

But the IT hype-machine is no ordinary train. It charges along at breakneck speed, often on the wrong side of the track, with no standard wheel gauge. There are countless accidents, with injured customers littering the track.

In recent weeks we have seen many of these cloud-related accidents. LinkedIn reported that millions of their users’ login credentials had been downloaded by an unauthorised source; Dropbox announced that customer information had been obtained via a security breach; Google Talk – the text, voice and video-chat service – suffered an outage in July; and so it goes on.

Microsoft’s prediction that the cloud will ‘fundamentally change how businesses operate and compete’ is correct, but not perhaps in the way they meant it. HP’s view that ‘through the cloud, everything will be delivered as a service, from computing power, to business processes, to personal interactions’ is deeply worrying. Call me stupid, but shouldn’t personal interactions be personal?

Not only are there accidents, but the lack of standards within cloud IT systems makes it incredibly difficult to integrate different applications. For example, it is very tempting to add a cloud service to your CRM (contact management) system, to engage in online fundraising or to sell new products and services. But how do you link this to your current systems?

New contacts can be added, and details changed, within a cloud product but most core CRM systems do not offer the facility to automate the integration of this data. Similarly, if you have a number of different cloud solutions on top of your core CRM system, how do you get one view of what is going on with your contacts? Each solution will hold the data in a different format and it is a huge challenge to pull all this together.

Civil war

Customers want standards and interoperability, but the IT industry is apparently engaged in a civil war that makes this look very unlikely to happen.

There has been a tidal wave of patent litigation involving the likes of Oracle, Apple, Microsoft, RIM (creator of the BlackBerry), Facebook and Yahoo. Longstanding partnerships are being broken and former allies are now in competition.

A good example of this was Microsoft’s announcement of the launch of their own tablet device, which puts them in direct competition with their major partners such as Dell, Acer and HP.

For those who remember the original launch of the graphical user interface (including the Windows operating system), the rise of social media, and outsourcing, this hype is all too familiar.

So if you are going to adopt some cloud technology please do the blindingly obvious. Check very carefully that the product works before you buy it, worry a lot about security, and then develop an IT plan to manage data integration as well as you can.

Finally, make sure you get a really quick ROI on your expenditure, so there is a chance your money will be well spent.

If you want to check out a different sort of train, you might like to visit the bridge I mentioned. The postcode is TW9 1UY.

John Tate is a business consultant, IT adviser to CFG and a visiting lecturer at Cass Business School 

Alex McLachlan
Senior Consultant
7 Sep 2012

I very much agree John that the cloud has been subject to the well know "Gartner IT hype curve" that plays up the advantages and minimises the complexities.**content removed - refer to community standards - advertising**

The Cloud is a huge opportunity for organisations to improve speed to market, provide operational resilience and increase value for money. However, there are complexities that need to be considered and you need to be careful to select a solution that is appropriate for your business.

Many organisations are using the cloud for email and office applications, particularly from Google. Others are utilising cloud services from the likes of Amazon to provide rapid, flexible testing platforms to bring new ideas to market and to scale for peaks in demand - "cloud-based services are allowing SMEs to have industrial-strength IT very quickly" as Gartner analyst Dave Aron said recently. A good example of an organisation taking advantage of the cloud is Big Society Capital, who are in the process of rolling out their new services rapidly using cloud services, something that would have been very difficult to achieve if they had to purchase and then set up their own infrastructure.

Amazon provides extremely flexible services that can be rapidly set up, deployed and then taken back down, all paid for by units of processing utilised. The take-up of Amazon's Cloud services has been huge - it is estimated [March 2012] that Amazon has of the order of 450,000 servers.

There are though some limitations to Amazon's cloud services. This sort of limitation has led Acquia, the leading Drupal hosting company to diversify to provide a range of Cloud hosting services for different needs, from fully shared to completely private.

Another area where organisations need to be aware when making decisions about the Cloud is the financial implications. One of the attractions of the Cloud is the different payments models, using OpEx rather than CapEx. This though can still be problematic as discussed in a recent HBR blog post "The Truth About Cloud Economics".

Another example is that whilst Salesforce is a very attractive Cloud-based CRM platform that can give considerable savings for a compact set of users, if a wider community requires occasional access (consultants who have part-time sales activities for example) then the costs can be prohibitive.

So, the Cloud has a considerable potential benefits, but the options need to be considered carefully to deliver the best business value.

Matt Parker
Lamplight Database Systems Limited
7 Sep 2012

I don't see how this is about 'the cloud'. The whole article seems to be either about IT in general, or comparing 'the cloud' to a mythical perfect computing approach (which from what I can tell is all on the command line, if you don't like GUIs).

Starting with your conclusions:

"So if you are going to adopt some cloud technology please do the blindingly obvious. Check very carefully that the product works before you buy it, worry a lot about security, and then develop an IT plan to manage data integration as well as you can.
Finally, make sure you get a really quick ROI on your expenditure, so there is a chance your money will be well spent."

These apply to any technology, not just 'cloud' products. In fact it probably applies to lots of things we buy (though perhaps houses or cars don't need IT plans!).

Interoperability of systems is a problem whether they are 'cloud'-ey or not. In fact the language of 'the cloud' - html - is perhaps one of the best examples of interoperability and standards agreed by competing vendors around. And in general it's much easier to hook up a web-based package to your website (or whatever) than with an offline one (try linking up to well-known offline accounting software, compared with something like Kashflow, an online alternative. From experience, offline is horrible, expensive, and fragile.)

The most recent and well-publicised patent case between Apple and Sumsung was about design (icons with rounded corners) and mobile interface idioms (touch-to-zoom) - nothing to do with 'the cloud'. Yes, some "Longstanding partnerships are being broken and former allies are now in competition" - but new players emerge and new alliances are made (eg Nokia-MS). That's just the nature of capitalism, I suspect. There's nothing special about tech firms, or cloud products in this.

You're right that there have been security problems with online systems. But there have been plenty with offline ones too. It seems like at least monthly a hospital or Local Authority gets fined by the ICO for sending an email with sensitive information to the wrong people, or throwing out hard disks full of unencrypted, sensitive patient data, or whatever). Absolutely worry about security, but worry about it whether you're online or off.

I'm not going to go on about the positives of 'cloud' products - for there are lots - but perhaps you should have done to give a little balance? But I'll just note in passing that you blogged this article and it got sent by email to my (cloud-based) email client!

For what it's worth: my conclusion: use the best tool for the job. Sometimes that'll be a cloud product, other times it won't. Understand the issues of each - for whatever approach you use there will be issues - and plan for them.


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John Tate

John Tate is a qualified accountant and entrepreneur. He is a columnist for Charity Finance, a visiting lecturer at Cass Business School's Centre for Charity Effectiveness and trustee of Eduserv.

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