Forrester Bucks Wisdom on Cloud Computing

CIO - A couple of weeks ago Forrester released a report on cloud computing, based upon a survey of small and large enterprises located in North America and Europe. I was particularly interested in its findings as it addressed the question of private (internal) cloud computing, given my recent CIO.com blog series, "The Case Against Cloud Computing."

As you probably know, the conventional wisdom in the technology industry is that large enterprises are going to gravitate toward private clouds. The three reasons most often advanced for this are:

1.Building a private cloud enables IT organizations to leverage existing infrastructure, thereby making cost-effective use of previous investment.

2.Placing cloud computing inside the data center obviates many (if not all) the issues that accompany public clouds, e.g., data privacy.

3.Private clouds can obtain a lower TCO, since they don't have a profit margin added to the base cost structure of a cloud environment.

Less often advanced, but underlying these reasons, is an unspoken belief that large enterprises just won't be comfortable relying on external compute resources and will instinctively trend toward placing a cloud internally.

Based on the assumption that large enterprises will go the private cloud route, most of the major technology vendors have launched private cloud initiatives. For example, just this week IBM announced a service to help companies implement a cloud-based test/dev environment inside the firewall. Its competitors such as HP also have private cloud offerings. One might go so far as to say that the conventional wisdom on this subject is along the lines of "sure, the public cloud providers got this trend started, but now the big leaguers have shown up to do it right-inside the data center."

Therefore, I found the Forrester report " Conventional Wisdom is Wrong About Cloud IaaS" to be compelling reading.

Forrester's Key Findings

Of the enterprises responding to the Forrester survey, about one quarter of enterprises plan to spend or are spending on IaaS via an external service provider. To fall into this group, the enterprise has to be pretty far advanced in its implementation plans-this is not companies in a "discovery" or "evaluation" phase. This is companies who have made a decision to move forward with an external cloud provider, or are in fact implementing a system hosted by an external cloud provider.

Firms are slightly less interested in internal clouds than in external IaaS. By a margin of 10 percent, companies of all sizes prefer to focus on external providers rather than implementing a cloud internally. This is really surprising, for two reasons: (1) it indicates that companies feel they have enough information to make a decision, which is somewhat surprising given how early in the process we are; and (2) despite how early in the process it is, most companies are not opting for the "safer" choice, which is creating an internal cloud.