Transitioning to the Cloud, with Care

It’s been a given over the past few years that cloud computing will co-exist with traditional infrastructure as enterprises seek to balance the needs of dynamic, high-speed and mobile platforms with traditional business processing and database applications.

But that assumption could be falling away as several recent surveys indicate that not only are enterprises growing more enthusiastic about the cloud, but more disillusioned with the old way of doing business.

First up is a new study from ICD that claims spending on public cloud services is on track to hit $40 billion in 2012 and looks set to top $100 billion by 2016. That translates into a compound annual growth rate (CAGR) of 26.4 percent, dwarfing that of the IT industry as a whole. The research firm predicts that by the end of the decade, the cloud will account for 80 percent of industry growth and will represent the “highest-value leverage of IT” as enterprises seek to foster advanced data capabilities with the lowest possible overhead. The report goes on to say that the cloud is set to move in on all of the key areas currently manned by standard enterprise infrastructure: applications, systems and infrastructure, platforms, servers and storage.

Even organizations that maintain their own internal infrastructure will see them become more cloud-like as the decade unfolds. According to Renub Research, the paradigm shift under way in the private cloud is putting enterprise resources on a utility footing at an exponential rate, with the market growing 21.5 percent a year between now and 2015. The movement will usher in a range of new virtual products and services in IT, including virtualization platforms for infrastructure, applications, middleware, business processes and security.

All of this comes at a time when IT executives are voicing increased doubts about the wisdom of continued investment in traditional in-house infrastructure. Nearly two-thirds now say that standard IT is both more expensive and more wasteful than the cloud, according to hosting firm Savvis, a dramatic increase over 2010 when similar sentiments were voiced by less than half of survey respondents. At the moment, only about a quarter of IT infrastructure exists outside owned-and-operated data center infrastructure, which Savvis expects will jump to 40 percent by 2017. And more than half of respondents say they regret some of their recent IT purchase decisions, a figure that rises to 66 percent in the U.S.

But for all the enthusiasm about the cloud, there is also a high level of ignorance regarding key details of cloud infrastructure as it stands now. The most significant misunderstandings deal with security, according to the Ponemon Institute. In a recent survey, the organization found that close to 64 percent of respondents say their cloud providers are responsible for protecting sensitive or critical data, although two-thirds of them say they are unfamiliar with their service providers’ security policies. And nearly 40 percent say they are willing to lower their security requirements for the cloud in exchange for lower operating costs.

Taken together, these studies offer both a comforting and troubling view of the cloud. As a means to increase data productivity and tailor enterprise infrastructure for a more dynamic and efficient IT environment, the cloud is probably the most significant development in decades. But all those gains could produce a pyrrhic victory if it leaves data more vulnerable to loss or compromise.

Enterprise executives should be cautious not to let visions of a bright, shiny future obscure their view of cold, hard reality.