An analogy I’ve used in the past is that were Marc Benioff (CEO of Salesforce.com – arguably the most forward leaning organization in the world of enterprise cloud computing) to acquire a business built around a collection of “stove pipe,” on-premise solutions one of the first things he would do is dictate that everything must to be moved to the cloud. Marc Benioff was one of the first CEOs to truly “get it.” Everything his organization does is viewed from the lens of the cloud.
Increasingly, it is clear that there is a viable and economical cloud computing solution for nearly every situation.
|Organization Size||SecurityReq.||Existing Investment||IT Group|
|Entrepreneurs / Sole Proprietorships||Basic||$||None|
|Small Business (less than $1M in annual sales)||Varies||$||Shared|
|Small-to-medium Business ($1-$10M in sales)||Varies||$$||Maybe|
|Mid-sized Companies ($10M-$100M in sales)||Medium||$$$||Likely|
|Medium-to-Large Companies ($10M-$100M in sales)||High||$$$$||Yes|
|Enterprises ($1B+ in sales)||High||$$$$$||Definitely|
* Columns are meant to represent typical situations
To some there are as many reasons not to embrace the cloud as there are to adopt it. It is a matter of perspective. Those positively disposed to a SaaS strategy will find a way. Those who are not will find reasons (excuses) why it does not make sense, is too costly, or would be too much of a distraction. Where there is a will there is a way, however, the size of the organization (which is often a proxy for existing investment) reasonably weighs on the level of difficulty of making the leap to the cloud.
Existing investment – For smaller entities or individuals there may be cheaper alternatives than hosting in the cloud, however, the effort associated with maintaining hardware and the ease of scaling are reasons why a cloud-based solution makes sense over the long term. For larger entities and enterprises where there is an existing investment in other technologies such as a datacenter that cannot be easily abandoned, a hybrid hosting strategy often makes sense.
Security – A common reason cited not to use a cloud based solution is that customers demand a higher level of security than can be achieved in a public cloud. Organizations like Salesforce.com and Google (Apps) have demonstrated for all the world to see that even the most sensitive information can be held securely in a public cloud. Arguably, when properly configured, information in a public cloud is as well if not more securely held than in an on-premise solution. Other than high security government data there is little information which cannot be “trusted to the cloud.”
Cost – The cost profile of hosting an application in the cloud is indeed different than if hosted locally. There are less upfront costs and expenses are tied to usage. For larger entities there is a material difference in how the costs are accounted. Cloud costs are operating expenses that need to be incurred in the current reporting period where much of on-premise costs can be capitalized and depreciated over a number of years.
Complexity – Hosting in a public cloud poses new challenges to individuals and IT organizations which may have become accustomed to owning their own hardware. The concept of deploying to the cloud, ensuring proper security, scaling, and hundreds of other tasks are new skills that IT organization have to acquire. Those that do will thrive. Those that do not will be left behind.
FUD – Fear, Uncertainty, and Doubt is an expression that has been used in the computer industry since the mid-1970s to refer to a technique used by those who seek to stymie the adoption of new technology due to a lack of understanding. One of the first applications of FUD was by IBM sales people to undermine the confidence of buyers in their competition. For those with a stake in the status quo moving to the cloud represents at best more work and a worst increased cost, down time, and frustration as they figure their way through new technology.
In reality Salesforce.com would likely never acquire a business so wedded to what they would view as an antiquated technology strategy. When viewed in this way the degree to which an organization has embraced the cloud can be viewed as a competitive advantage or indeed a disadvantage.