Cloud computing is all the rage in the IT industry these days, but there's still plenty of confusion about how cloud applications work and what kind of long-term impact they will have on business technology.
In this article we'll take a look at six common misconceptions IT pros and users have about cloud apps, related to performance, security, management, cost and the long-term effect on IT staffing.
1. Cloud computing will put IT pros out of a job
It's true that shifting internal IT functions to cloud applications lessens the need for a business to have a huge IT staff. Some organizations have moved to cloud services such as Google Apps because they no longer had the staff to handle an internal e-mail and collaboration system. This cause-and-effect may be switched in other cases, with layoffs occurring because of a move to outsourcing.
But the long-term risk to IT employees may not be as terrible as it might first appear, analysts say. For a business that uses many cloud apps, internal IT staff is still needed to manage and integrate the services. Some IT managers may start to see themselves more as vendor managers.
"There's no question it could reduce the demand for traditional IT skills," says analyst Jeff Kaplan, managing director of Thinkstrategies. "But that doesn't mean there can't be a whole new generation of requirements around vendor management, to properly evaluate, select, monitor, manage and contract with these cloud computing companies."
These "traditional" IT pros might find their roles shifting to business unit support, making sure every employee has the right cloud tools to do his or her job. Another obvious point is that, over time, as technology resources shift from customers to vendors, the vendors will have a greater need for IT pros, creating more jobs on the vendor side.
If you're an IT administrator managing servers, applications and other in-house systems today, a shift to cloud computing could force you to learn new skills or eventually find a job elsewhere. But smart tech people already know their industry undergoes constant change, and should be ready to adapt.
2. The cloud is free (or at least incredibly inexpednsive)
The Google Apps business version is $50 per user per year. Microsoft's online services start at US$120 per year, and both Google and Microsoft offer free versions to home users.
That sounds inexpensive, because it is, but users and analysts are quick to point out that licensing is not the only cost of using a cloud service.
"One of the biggest preconceived notions you have is that it's free. It's out there, it's not a big deal, just sign up and everything's great," says Scott Weidig, who is a technology coordinator at Schaumberg High School in Illinois and uses a variety of cloud apps for business and personal use, including Zoho and Google Apps.
Some customers report having to upgrade Internet bandwidth to take advantage of cloud services (more on that later in this article).
There are also hidden legal costs, because there is generally an increased risk profile when you move applications from the enterprise data center to the cloud, says Nolan Goldberg, a patent and trade secret litigation attorney for Proskauer Rose LLP in New York.
"Cloud services will not necessarily be cheaper," Goldberg says. "The misconception is that a cloud service is always going to be cheaper because people are looking at the sticker price, and not the true total cost."
Before adopting a cloud service, a customer should perform due diligence to make sure the service is suitable for a given application, and that the contract with a cloud provider is not harmful to the customer. Some cloud service contracts state that the terms can be changed by the provider at will or with little or no notice, a troubling development, Goldberg says.
Storing data in the cloud brings new security and litigation risks, but unfortunately it is difficult to calculate beforehand how those risks will increase the customer's potential financial obligation.
3. Cloud performance is never a problem
Just because you use a cloud provider doesn't mean you can ignore your own IT infrastructure and expect great performance. Information systems director Timothy Porter says after adopting some cloud apps a few years ago, "we had to reevaluate the amount of bandwidth we had in our corporate office."
Porter is the IS director at WS Development Associates in Chestnut Hill, Mass., a real estate developer and owner with 82 properties throughout New England.
WS Development Associates users cloud software applications for invoice processing, payroll and other HR functions. The company originally had two T1 lines, and upgraded to a Verizon Mux setup for data rates of up to 50 megabits per second. Cisco WAN acceleration devices were also necessary to improve performance at branch offices, Porter said.
Before the upgrades, performance was a major problem.
"When you start processing a lot of invoices via an application that is not hosted internally, you will have a lag while doing the processing," Porter says. "When you're trying to process dozens of invoices, that really adds up over time, and user frustration can show itself."
Even if your Internet bandwidth is solid, other factors can degrade performance. At Schaumberg High School, Weidig says a Web filter installed to prevent students from surfing inappropriate sites was slowing legitimate educational Web sites, including a cloud-based reading assessment tool used by students. It turned out the hosted reading site was using nine different IP addresses and URLs, and the Web filter only knew about two of them. Reconfiguring the server to more efficiently allow access to trusted sites solved the problem, but identifying the issue was not a simple task.
Cloud vendors like to make it seem as if cloud platforms offer infinite scalability, but that may not be the case for power users. Spirent, a network performance testing firm, recently evaluated several cloud providers including Amazon, Blue Lock, Hosting.Com, GoGrid, Maximum ASP and Rackspace. The company found that as the number of connections to a cloud service goes up, response times also go up. This is perhaps not surprising, but some of the response times lagged to as much as three to five seconds, says Tim Jefferson, general manager, networks and applications group at Spirent.
In order to serve an unlimited number of users, "what you have to give up is performance," Jefferson says. "As you scale up in one vector, it may cost you response in another vector."
4. You can replace Microsoft Office with Google, or Zoho, or…
Yes, there are examples of organizations switching completely from Microsoft Office to a cloud-based e-mail, document editing and collaboration platform, but it is definitely the exception for now.
IDC surveyed businesses in July 2009 and found that nearly 97% were using Microsoft Office, and 77% were using Microsoft to the exclusion of all other platforms. Google Docs was being used extensively by nearly 20% of businesses, but mainly as a complement to Microsoft Office rather than as a replacement.
Just weeks ago Google officials urged customers to try out Google Docs as a complement to Microsoft, and said "there's no need to uninstall" Office.
Google has at other times argued that Google Apps can be a complete replacement for Microsoft Office because -- in Google's view -- the extra features you get from Microsoft aren't necessary for most users.
But even the most optimistic cloud computing proponents usually won't claim that cloud apps are as good as Microsoft Office today. Raju Vegesna, the "evangelist" for cloud apps provider Zoho, says that while the cloud will eventually be a viable replacement of Microsoft, "in the short run it's complementary."
"Microsoft took 20 years to build Office to where it is. It just takes time. There are features we will have to implement to have the depth of Microsoft Office," Vegesna says.
Vegesna predicts the cloud will offer all of the features of Microsoft Office within two years. Customers will have to do their own evaluations to see if they agree with that assessment, but even if Vegesna is correct, he notes that e-mail and office tool replacement cycles will take years.
"These things don't happen overnight," he says..
5. The cloud is easy to set up and manage
Vendors may tell you that using cloud applications will nearly eliminate IT management needs, but customers say managing cloud services is not that simple.
There are still management responsibilities in terms of managing the service providers you contract with, Kaplan notes. IT management also extends to integrating tools from multiple vendors, and provisioning new cloud services in response to user needs, Vegesna says. And ensuring performance of applications may require upgrades to a customer's infrastructure, as earlier noted.
Users experienced with using Gmail or Google Docs may not realize how complicated setting up a cloud service for a corporation is, Weidig says.
"From a consumer standpoint, it's very easy to set up," he says. "From a corporation's standpoint, that becomes a much larger uphill battle."
One of the biggest management challenges is making sure you have control over your data, an important task for both practical and legal reasons. The ability to move data and business processes from one cloud service to another may be limited. And the question of how much control a vendor has over your data is still being sorted out in the courts, but it's safe to assume that putting data into the cloud rather than inside your data center increases the risk that a government entity could seize sensitive information related to employees or customers, Goldberg says.
The cloud makes heavy use of virtualization technology, making it easier for data to be moved from facility to facility and from state to state, and to be mingled with data owned by other customers in a multi-tenant system.
Porter notes that he runs data loss prevention software internally, but cannot have the same control over a third party's infrastructure.
Data protection laws vary from state to state, and are becoming stricter, putting the burden on customers to carefully evaluate vendors and insert appropriate language into contracts to ensure that sufficient processes to protect data are in place.
"The end user who has a Gmail account at home doesn't always understand all the aspects of who owns their data, and how their data may be restricted if it contains personal information," Porter says. "Just because something is cheap and easy or you can outsource it doesn't mean all your obligations end there. A corporate environment is very different than a personal environment. There are a lot of boundaries that need to be jumped over before you can put all your information in the cloud."
6. Security is [fill in the blank]
Security is a contentious issue for cloud watchers. Some argue that users mistakenly believe clouds are inherently insecure, while others say users are not skeptical enough.
Vegesna of Zoho argues that most customers will have more security by moving to Zoho, because "we have larger security teams than most of these businesses," and Zoho hires third-party white hat hackers to test its systems monthly.
Weidig, however, says that while he generally trusts vendors like Google, Zoho and Microsoft, he thinks users place too much trust in the data security of cloud providers.
"You read stories just about daily in reference to XYZ site getting hacked," he says.
Too often, users think "nobody cares about me, or what [data] they can get from me," he says.
Skeptics can point to any number of incidents seeming to prove the risks of cloud applications. Google recently admitted that it had mistakenly been collecting browsing data from unencrypted Wi-Fi networks since 2007. Last year, a hacker obtained more than 300 confidential documents that the company Twitter was storing with Google Apps, although the incident was blamed on insufficient passwords rather than Google's security.
Almost any computer system can be hacked, unfortunately. In many cases businesses may conclude that their own systems are more secure than the systems operated by cloud providers, or that some data is too precious to be stored outside of their own firewalls. Others, especially small businesses with limited IT staffs, may feel better off with a cloud provider.
Kaplan is on the side of cloud vendors in this case.
"A lot of people think inherent to the web there's far less security, but in many cases it could be far greater. Many customers can't support or maintain their security level to same level as the cloud," he says. "When you talk about proven players, like Salesforce and Google, they are facing far greater security challenges and holding up against those in a far better fashion than many corporations are going to do."
Vegesna says Zoho and other vendors still face a challenge convincing customers that security is robust enough.
"You are asking the user to trust someone to put their entire data online," he says. "They're not initially very comfortable with it."
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