Early Cloud Adopters Ride Out Hype Cycle

CIO - Gather a few hundred IT executives in a room for a day, as we did recently at our CIO Perspectives Forum in New York, and talk of cloud computing billows forth. For CIOs who are already dabbling, projected savings are debated. From bullish analysts and eager vendors, more dazzling benefits are predicted. More on CIO.com Cloud Computing Vendors Seek Common Definition and Goals A Tale of Two Cloud Computing Conferences Cloud Computing: Reality Check From Early Adopters Amazon.com Offers Compiere Enterprise ERP via the Cloud Cloud Vendors: Comparison of Amazon EC2, Google, Skytap and VMware

Yet just as quickly come the caveats. Questions abound on security, reliability and control over corporate data. The biggest shadow of all is cast over what, exactly, cloud computing means.

A recent academic study identified at least 22 definitions of "cloud computing" in common use, from the broad notion of using the Internet to access any sort of managed technology services (a.k.a. SaaS or software as a service) to the wide-eyed optimist's view that a diverse, powerful lineup of cloud services will be delivered in real time by crash-proof distributed servers "without complicated deployment worries."

The sorry economy is prompting more CIOs to explore cloud computing and its cost-cutting promise, says Doug Tracy, former global CTO for Rolls-Royce. "But it's still an idea that a lot of people don't know a whole lot about."

The core attraction of cloud is that companies can avoid buying and running hardware, software and other equipment by contracting with a services vendor to run selected systems or applications on its own infrastructure of virtualized servers. The "services" you purchase are delivered in a standardized, multitenancy fashion that observers say will save one-third to one-half of your current costs.

That's certainly appealing as this recession forces CIOs to seek ever-greater efficiencies from IT infrastructures already as lean as starving wolves.

"We're under tremendous pressure to provide flexibility and agility and to be driving cost models down," says Charles Soto, vice president of IT at Motorola's Broadband Mobility Solutions business, which recently tested cloud computing services for four different applications. But thinking that cloud computing will release an instant reservoir of savings is a mistake, he adds.

To Arthur Winn, head of pricing at BT Group, "cloud" is nothing but a marketing term. The US$41 billion London telecommunications company has been doing what could be considered cloud computing for several years, he says. That is, handing over BT customer calling data to a third party to analyze and then let BT access via the Internet. "As long as we are getting more service for less money each year, we're happy," he says.