Cloud Computing Is More Likely for Low-Risk Systems: Report

August 2, 2010 Off By Hoofer
Grazed from eWeek.  Author:  Don E. Sears.

Almost four out of five companies are discussing and evaluating how to take advantage of cloud computing technologies, according to a report by Houston-based outsourcer TPI. Seventy-eight percent of 140 IT managers surveyed by TPI fit in this category, yet a smaller number are actually adopting these technologies.

“The major trend with cloud is rapid adoption among small and medium-size companies and a somewhat more cautious approach to adoption from large enterprise companies,” said Kevin Smilie, partner at TPI, to eWEEK. “[O]ur recent TPI survey of enterprise clients suggests that companies are beginning to conduct significant planning activities to leverage some of the opportunities that cloud brings and incorporate them into implementation plans for later in 2010 and certainly 2011.”

The main areas of adoption are in lower-risk technology categories. Low-risk services being considered by nearly half of respondents included hosted e-mail, messaging applications, desktop and server virtualization, and storage services. Larger, more complex and already heavily invested applications like ERP systems were only being considered by 10 percent of companies.

Security and other risk factors are still of the utmost importance to the enterprise, with 79 percent stating that cloud security is inadequate or unclear. Forty-nine percent are concerned with integration to legacy systems, and another 49 percent are concerned about losing company data. Half of respondents worry about noncompliance with regulations, and disaster recovery and business continuity issues.

“The main concerns [of potential customers] are security when we are talking the public cloud,” said Simile. “Other concerns include being locked into a supplier and future cost of cloud services, since many of the new cloud suppliers do not offer multiyear pricing.”

Private clouds are appealing to many companies to help thwart security concerns. Why private clouds?

“A private cloud running virtual servers offers economies of scale (lower cost, leveraged computing power during peak demand, etc.) that one cannot achieve without virtualization, and of course sets you up to move certain applications to the public cloud, which should offer the absolute best economies of scale, lower cost, etc.,” said Simile. “The real issue clients face when they plan or consider adopting a private cloud strategy is the make or buy decision. Do I outsource my data center and allow someone else to manage my private cloud, do I do it myself, or [do I do] some combination of the two?”

Another study on cloud computing adoption found that cost-conscious firms with small IT departments are more likely to adopt cloud technologies and services than larger ones, according to IT management application provider Spiceworks.

“Small companies with little existing infrastructure and outsourced IT are moving most quickly to the cloud, whereas larger SMBs are taking more measured steps due to considerable investments in onsite technology,” said Jay Hallberg, Spiceworks’ vice president of marketing, to eWEEK. “With seven times as many users as the enterprise market, it’s important for cloud service vendors to consider cloud service adoption patterns and to make it simple for SMBs to manage hybrid on-premises and cloud solutions.”