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Computerworld - Educational Testing Service, developer of the SAT and other standardized tests, runs applications on software-as-a-service platforms such as Salesforce.com. And CIO Daniel Wakeman said he's interested in using cloud computing services that could enable ETS, which has a highly cyclical business and an average server utilization rate of just 8%, to modulate its processing capacity as needed.

Wakeman has gone so far as to benchmark internal servers against Amazon.com Inc.'s Elastic Compute Cloud (EC2) service. But even though the costs were similar and EC2 could be an answer to Wakeman's server utilization issues, he's currently limiting his use of cloud services to pilot projects and development testing — "things that don't require full levels of security."

Amazon, Google Inc. and other cloud computing vendors still aren't fully prepared to meet the needs of corporate IT, Wakeman and other technology executives said during a panel discussion at Computerworld's Premier 100 IT Leaders Conference in Orlando today. Security concerns topped their list of shortcomings — and the audience's, based on an electronic poll conducted at the event. But the execs also cited reliability and availability as hurdles that cloud vendors need to overcome before they can truly win over IT.

"It's just an immature market," Wakeman said. He noted that Princeton, N.J.-based ETS has dealt with the security issues of cloud computing "by not putting anything up there that we really care about."

Manjit Singh, CIO at Chiquita Brands International Inc., said that cloud vendors have to do "a lot more work" on security, reliability and manageability to be able to serve global enterprises such as Cincinnati-based Chiquita. "I probably wouldn't put anything mission-critical in the cloud now," Singh said, although he added that he hopes to be able to do so in the future.

Singh said he also is concerned that cloud vendors will eventually come up with new ways to charge customers "that are worse than [software] maintenance fees." And he worries that if he were to change cloud vendors in the future, his data might not come back to him in a recognizable form — raising the specter of vendor lock-in.

The U.S. Defense Information Systems Agency, which provides most of the systems used within the Department of Defense, is deploying an internal cloud computing service called the Rapid Access Computing Environment. The RACE technology is "embryonic" now, said DISA CIO John Garing, who added that he also hopes to be able to rely on external providers in the future.

"If I were king for a day, I'd rather turn to a Google, Amazon or somebody else and say, 'Do this for us,'" Garing said. "We're starting on our own, but I hope that some day there will be a hybrid model where I can use outside services without having [people] say, 'Oh my gosh, we're on the Internet.'"

But if things continue as they are now at cloud vendors, "we're going to be at an impasse," he cautioned. "If they're going to be more than just a CRM vendor, say, they're going to have to do more than just provision a Web service and run it."

Despite the current shortcomings, both Wakeman and Singh said IT departments should embrace cloud computing as a concept, because business users are sure to push for its adoption.

Wakeman said ETS followed a similar path on open-source technology with its software developers; now all of the company's applications are built on the LAMP stack. With cloud computing as well, IT "should get out in front of it by setting policies and getting involved," he said. "Because it's going to happen."

Read more about Cloud Computing in Computerworld's Cloud Computing Topic Center.