I love to watch the looks on the faces of IT leaders when you ask a question that involves the word "cloud computing". It's usually a mix between, "Oh, here we go again" and "You obviously don't know much about IT if you're asking me this."
Even if those IT leaders give a non-committal response or a tepid "It'll be interesting to see how it develops" answer, it's always easy to tell that most of them would rather gouge out their own eyeballs before turning over their company's most important applications to a vendor to host over the Internet.
Why? It's all about control.
Don't get me wrong. I'm not calling CIOs a bunch of Luddite control-freaks. It's not that simple. IT requires tight control and management because IT departments can't afford to overlook any details that could lead to unplanned errors or downtime. Jobs, productivity, reputations, and lots of money are all at stake every day when you work in IT--and even more so when you're in charge of the whole operation.
There's also the tiny little issue of data. IT leaders do not trust online vendors with the company data, including everything from customer information to legal documents to intellectual property and trade secrets. And, what about compliance? If the data isn't handled properly and is in violation of Sarbanes-Oxley (Sox) or HIPPA regulations, who's responsible?
And, what happens when the Internet goes down and all of your workers are stuck twiddling their thumbs because they can't access the company's most important piece of software? That's the other big game-breaker for IT leaders when they look at cloud computing.
However, over the next five years, we should expect CIOs to change their tune, because most of the technology obstacles will be removed and there will be a big financial incentive to make the switch. To explain, I've broken this down into the top four reasons why IT leaders will embrace cloud computing:4. Separation of data from apps
It is quite possible that in the next few years we will increasingly see the front end of applications separated from the backend. The front end will be delivered in the Web browser while the backend will be powered by highly-scalable databases.
As WAN speeds rise to over 100 Mbps, bandwidth costs decrease, and WAN acceleration technology drives much more efficient use of WAN pipes, the application front-end and the backend database will be able to exist in separate locations much more easily and effectively. In some cases, this could even allow companies to host the data inside their own private data centers and simply allow the front end apps running in the cloud to tunnel in and connect to the data.
3. Offline access for online apps
The future of cloud computing applications is not session-sensitive Web pages that deliver applications that are unavailable when there's a hiccup in Internet access or loses a user's form data when a backhoe accidentally cuts a fiber line.
Following the example of Google Gears (and in some cases using the code), we're going to see the next generation of serious Web applications develop an offline component in addition to the standard online component. This offline functionality stores the application locally and caches user data so that any hiccups to a Web session or connectivity outages allow users to continue to work uninterrupted. Then when Internet connectivity is restored, any work and changes made offline are simply synced up with the online version of the application.
2. Ubiquitous mobile Internet access
While offline functionality will be necessary for Web applications in the cloud to go mainstream, there's also going to be significant progress made over the next five years in making Internet access virtually ubiquitous--or at least available anywhere you can connect to a cell tower.
The spread of both WiMAX and LTE--competing 4G wireless standards--will bring broadband Internet to remote locations and will introduce true mobile broadband connectivity to cars, busses, and trains. This will help remove one of the psychological barriers to cloud computing: the idea that you can only use it when you're sitting at a desk where you have a high-speed connection.
The arrival of more powerful and versatile smartphones and netbooks, combined with ubiquitous mobile broadband, will open up new possibilities for cloud computing that will surpass most of what's currently available with standard software clients--and do it at a lower cost.
1. Moving Capex to Opex
Speaking of costs, that brings us to the main reason why IT leaders will eventually adopt cloud computing. Scaling servers up and down is very expensive. Most IT departments typically buy as many servers as they'll need during the company's estimated peak capacity. However, they don't need all that capacity most of the time so lots of servers sit idle.
With cloud computing (and its cousin, utility computing), the equation changes. When a company needs more capacity during its peak season, it simply pays for it on-demand. When business slows down and the company needs less capacity, its bill goes down because it's using fewer resources.
In financial terms, this allows a company to move much of its infrastructure costs from being a capital expenditure (Capex) to an operating expenditure (Opex). CAPEX costs are often tightly controlled since they involve depreciating assets. The advantage to Opex is that you can typically dial it down and dial it up much more quickly and carefully.