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BLOG: The Threat Cloud Computing Providers Pose to Corporate IT

Bernard Golden | Oct. 18, 2011
The biggest threat cloud computing providers present to IT organizations is that they raise the bar for IT management. If a cloud provider can get a server up in eight seconds when it takes the IT organization two weeks, IT will be seen as hopelessly ineffective--and ripe for a complete teardown.

What struck me about's announcement is the contrast between this distribution of free resources with the typical stringent rationing of computing resources within most companies (which, of course, is driven by the restricted budgets doled out to IT organizations).

Obviously, has made a financial calculation and concluded that, based on its business opportunities and cost structure, it can provide a large amount of IT resource at no cost to users. And, even more obviously, this has now raised the bar for other cloud providers. How long will it be before another provider ups the ante to 100 GB?

Using low costs driven by purchasing economies of scale, along with the kind of low operating costs provided by automation techniques such as those described in the piece on AOL, cloud providers can vastly undercut internal IT service offerings and costs.

Of course, one can point out that offerings such as suffer from shortcomings that enterprise IT offerings don't: They fail to provide compliance certainty, in-person support, integration with internal applications, etc. There's no doubt that this is true.

What both the enterprise IT professional and the people who point out shortcomings in popular cloud services fail to comprehend, however, is that the number of applications that require that stringent certainty and that hand-optimization is a small percentage of overall enterprise applications. Not to mention the fact that there is an enormous universe of applications that, today, are not even considered because they can't possibly justify themselves in the resource-constrained, high-cost, rationed world of enterprise IT.

The problem with arguing that current practices must be continued to address necessary application optimizations or compliance requirements is that it imposes the inefficiency and high cost structure of current practices on all the applications that make up the corporate portfolio-even though most of them don't require those practices. It's like insisting that one's family use a Ferrari to make the weekly grocery run because occasionally it's necessary to turn a 56.12 lap at Lime Rock Raceway.

The biggest threat to IT organizations faced with these new cloud developments is that they set the new bar of expectations. If AOL can get a server up in eight seconds, and the IT organization takes two weeks, it's going to be seen as hopelessly ineffective-and ripe for a complete teardown.

Far better would be to evaluate the application portfolio and identify those applications for which the skills of experienced personnel are required to ensure performance, compliance or other characteristics uncongenial to cloud deployment. A case should be made for those applications to be deployed, administered and monitored by the IT organization. The rest of the application portfolio should be aggressively migrated to cloud providers who can apply their efficiency and cost advantages to them.


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