While you are sleeping, who is managing your IT risk?

Running your own infrastructure is a risky proposition and one which can be overcome by shifting risk to Cloud Computing Vendors. Cloud Computing is becoming more mainstream and promises to gain more popularity in the near future. In a recent post on Datamation (Cloud Computing: The Road Ahead – Datamation ), Damu Kuttikrishnan quoted Gartner:

"By 2014, Gartner predicts worldwide cloud services revenue (both public and private) will reach more than $148 billion. With its latest survey, Gartner received responses from 2,014 CIOs representing more than $160 billion in CIO IT spending and covering 38 industries across 50 countries. The survey found that only 3% of CIOs today have more than half of their infrastructure and applications operating in the cloud. But that number is expected to grow to 46% by 2015, making cloud transformation the hallmark of many CIOs at their current companies."

What does that mean for your organization? Companies are rapidly moving services, applications and infrastructure to the cloud. By doing so, they are actually outsourcing their IT similar to the way we use supermarkets. For example, what did we outsource when we started using supermarkets? We trust that our supermarket will deliver fruit which is free of disease, fresh, and tasty. We don't give it a thought. We line up at the store and buy our apples, quickly rinse them and eat them. We pay a decent price, which is prescribed and agreed to up front, and in that price we "outsource" all the risk of growing apples and maintaining pesticides, harvesting (with heavy equipment), transportation, stocking, cleaning, refrigeration. The supermarket and their suppliers take care of ALL OF THAT! The same is true for cloud computing.

Cloud computing providers can be thought of as supermarkets of infrastructure, data-storage, applications, bandwidth, and services. You sign an agreement with your (reputable and good) cloud provider called an SLA (Service Level Agreement). The SLA is the contract, and a much more specific one than supermarkets provide for apples, which indicates the services you will receive and any and all warranties on those services, including the guaranteed safety of your data, uptime metrics, performance metrics, survivability, data recovery and backup and response time in event of an issue or outage. Wait, that is the same thing you have with your IT guy now, right? (Sarcasm, of course)… Rarely will this kind of an agreement exist with your IT provider whether it be a consultant or your own internal employee.

Now, lets talk about why Cloud Computing providers can issue guarantees. First, a good and reputable provider is going to be housed in a Tier 1 data-center. We are talking redundant generators, HVAC, Man-traps, armed guards. Typically only Fortune 100 companies can afford to host infrastructure in these facilities. But with the economies of scale provided by multi-tenancy, you can host your small-to-medium business or organization's IT infrastructure and applications in these same facilities and receive the same benefit. Think about the value in that. I'm paying less annually than I would pay my internal IT manager to manage 3 to 5 servers and receiving world-class service instead with guarantees of uptime and availability. There just is no comparison.

So is Cloud Computing for everyone? Should every organization move to the cloud? Well, the short answer is yes. The longer answer is, maybe some of your stuff, not just yet, but eventually. The available services are growing rapidly, and, soon enough, you will be able to leverage Cloud Computing for almost everything. But, for now, businesses should consider keeping some infrastructure in place for purposes of running legacy systems, and any system which is custom and proprietary to the business process. In other words, if this piece of software is part of your core competency, and it is not web-based, you should likely keep it in-house for now. Otherwise, start thinking about who can provide the best services and reduce your risk in the Cloud.