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Does cloud computing have a silver lining?

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Depending on who you ask, cloud computing is either the most wonderful thing to hit IT since sliced bread or an utter waste of time. Indeed, in his latest book, The Big Switch: Rewiring the World, from Edison to Google, technology pundit Nicholas Carr wrote, “IT departments will have little left to do once the bulk of business computing shifts out of private data centers and into the cloud.” Really? So, which is it? As is so often the case, the answer appears to be somewhere in-between.

To start with there’s still the problem of defining what the heck cloud-computing is in the first place. The answer varies, needless to say, varies from company to company. We can look to a neutral party for a better answer, but even then things can get a little puzzling.

Gartner, for example, has been wrestling with cloud computing and this is what they’ve come up with. First, according to well-regarded Gartner analysts Daryl Plummer and Thomas Bittman, cloud computing is “a style of computing where massively scalable IT-related capabilities are provided ‘as a service’ across the Internet to multiple external customers.”

Let’s take that apart. First, it means that cloud computing, despite what might say, is not simply another version of SaaS (software as a service). While your SaaS partner can certainly use a cloud to deliver the software goods to your users, a cloud can also be used to host your own applications.

That last, in turn, means you should be able to reap the economies of scale. With cloud computing, you should be able to have your CFO in his vacation home in Maine reviewing spreadsheets generated by accountants in the main offices in New York and San Francisco and already vetted by the chief comptroller from her home office in Montana. And, when all that work is done at day’s end, you won’t have to pay a dollar for the cloud’s no-longer needed CPU cycles and memory.

That’s the good news. The bad news, as David Cearley, a Gartner VP and fellow, recently pointed out is that “”In a shared pool outside the enterprise, you don’t have any knowledge or control of where the resources run. So if you have a concern over data location, as an example, that may be a reason for not using it.” So, in return for lessening the load on your data center, or perhaps even getting rid of it entirely, are you willing to lose control of your IT infrastructure? Or, perhaps of even more importance, trust someone else with your data’s security?

Security, as you know, is never a simple matter. Indeed, Gartner, in its Assessing the Security Risks of Cloud Computing lists no fewer than seven cloud-specific security issues. Before you sign off on a cloud computing contract, Gartner believes you must deal with this laundry list of concerns: privileged user access; regulatory compliance; data location; data segregation; data recovery; investigative support; and the long term viability of your cloud vendor.

With all that you couldn’t be blamed for asking: “Why would anyone want to trust their company’s computing power to a cloud vendor?” None-the-less, Gartner is sure you will. In a Gartner note, Gartner Says Worldwide IT Spending On Pace to Surpass $3.4 Trillion in 2008, Jim Tully, Gartner, VP and distinguished analyst, wrote, “Organizations are switching from company-owned hardware and software assets to per-use service-based models. The projected shift to cloud computing, for example, will result in dramatic growth in IT products in some areas and in significant reductions in other areas. In general, assets will be utilized with greater efficiency, and we are assuming that the overall effect on market growth will be neutral.”

In short, companies will be switching from in-house IT to the cloud. When? According to Gartner’s 2008 emerging technology hype cycle, which seeks to predict where various technologies are on the path from neat idea to staid old technology, cloud computing is still getting more hype than working reality and it’s two-to-five years away from mainstream adoption.

Will it? That will be your decision to make. While the idea of turning the responsibility for IT resources to an external firm is as old as the time-sharing mainframes of the 1960s, cloud computing seeks to sweeten the deal by putting everything IT on a ‘pay for use’ basis. Is the deal sweet enough? Is there enough silver in the cloud’s lining? It will be interesting to see how it all plays out.

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