Naked CIO: Cloud - so what's the big deal?

Everyone's talking about cloud computing but the Naked CIO just doesn't see what all the fuss is about. Here's his take.

For some time now I have been reading and hearing dynamic discussions about cloud computing and software as a service models. It appears this is the new hot topic of conversation. And with Amazon, Google and Salesforce.com all in the picture, there is also some big money being spent on marketing and promoting these services.

I have, for once, stayed somewhat clear of the debate, allowing discussions to roll on without my sourpuss perspective on things. However, I now feel I need to weigh in because I really don't see what the hype is all about.

For small businesses who cannot afford to have robust infrastructures and yet need strong infrastructure to support their products and services, cloud models are a no-brainer. Equally, those companies that can leverage the subscription applications of products such as Salesforce's without supporting or investing in software can benefit. These arguments are simple, although are biased towards smaller entities.

There are some simple arguments against the cloud model as well. For instance if cash flow and P&L performance are critical to your business, capitalising expenditures could be more beneficial than going to a subscription service. Equally in general the larger the company and larger the requirements, the less beneficial these services will be.

With larger companies it is likely you will require some level of infrastructure anyway. So using cloud offerings would mean managing mixed complex environments - which can present more problems than managing it yourself or through datacentre services. Then again, if your business is agile and needs to set up remote operations quickly, these services can be beneficial to supporting these business needs.

In the end these services fall into the same category as many other current hot IT debates. There is no right or wrong answer but there are right and wrong decisions.

Before choosing a cloud offering, look at your needs and current business drivers closely and decide on models that support these. Make sure your organisation is aware of the additional expenses compared with simply the depreciation of fixed assets. For many companies, especially in today's economic environment, these are very important issues and challenges.

Finally, make sure you understand the risks. Cloud computing can present some real privacy compliance issues which need to be considered.

It drives me nuts when people pick sides on issues such as these because it is in vogue to do so. When choosing a particular technology, platform or product, ask the right questions, understand your capabilities and resources, and map out your needs not only today but for the term of the agreement.

Then consider exit strategies and terms that may impede changes in the future - and most importantly, make a decision based on all the information - not just the desire to be cool.