Maintaining Strategic Control over Cloud Computing

Theoretically at least, there’s no way an internal IT organization building out its own private cloud could be as cost competitive as a public cloud computing service. After all, the economies of scale vastly favor the public cloud service.

But  to maintain strategic control over their IT resources, many IT organizations will still need to build out some private cloud platform.

As noted by Simon Wardley, a researcher at CSC’s Leading Edge Forum, companies will not be able to balance the inherent risks and benefits of using a public cloud service unless they have some ability to switch providers. And without some private cloud implementation acting as a hub through which public cloud services are delivered, IT organizations will not be able to easily switch providers.

So, said Wardley, IT organizations will need to take a hybrid approach to balance strategic control against the economic benefits of public cloud services.

Wardley says that none of these issues is particularly new. They were first outlined in a book called “The Challenge of the Computer Utility” by D.F. Parkhill that was first published in 1966.

The other fallacy that IT organizations will need to come to terms with, says Wardley, is the whole concept that somehow cloud computing will reduce their IT costs. In reality, cloud computing will make it easier to consume IT resources, making consumption rise. So while the cost of processing will drop, the demand to use cloud computing resources will increase to the point where companies will spend more in aggregate on enterprise IT than they did when their budgets were limited by the amount of IT infrastructure they could actually purchase.

Of course, none of this strategic thinking will come into play until robust sets of standards are in place that not only make it simpler to consume cloud resources, they also reduce the cost of switching services so that companies can play competitors off each other.

So from a strategic perspective, Wardley says the most important thing IT organizations can be doing as consumers of cloud computing services is pooling their collective purchasing weight to make sure that robust sets of cloud computing standards fall into place sooner than later.