My post the other day, Does Using Gmail Mean You're Stupid, produced some thoughtful comments from people that made me me think harder about the advantages and disadvantages of Cloud Computing. There are security risks and data ownership issues that you have to take into consideration. To get another point of view on the matter, I talked to John Newton, who is the Chairman and CTO at open source content management Alfresco, a company I've written about frequently over the last year. I asked him about his views on some of these issues.
Tech Treasures: As IT budgets inevitably tighten over the coming year, how can Cloud vendors take advantage?
JN: There have been a number of companies that have not been willing to look at cloud computing for fear of moving information beyond the firewall. This is mainly the fear of the unknown, although many companies have a legitimate reason to not put information outside the firewall. The credit crunch putting limits on capital access and the slowing of the economy put constraints on spending will get those who wouldn't have considered cloud computing to go ahead and give it a try. A lot of companies will probably find that it gives them much greater value for money.
TechTreasures: What benefits do Cloud computing offer companies looking to cut costs?
JN: The cost of infrastructure is definitely subject to economies of scale. Cloud computing can provide computing resources at a fraction of the cost as long as the service being provided is a commodity service. Going forward into the future, many will equate cloud computing to those who ran their own generators for electricity in the early 20th century moving over to electric utilities. This really is the analogy - computing as a utility.
TechTreasures: What's the downside of the Cloud?
JN: In order to get these economies of scale, the computing services really need to be commodity, meaning that you can replace one service for another. That means little or no customization and security will be more limited. Support will need to be standardized to bring down costs. Service levels will probably not be as high as internal staff, but will be much cheaper as a result. Also, bandwidth today is probably not be up to the requirements to move everything out of the enterprise, but that is probably just a matter of time before it catches up with service requirements.
TechTreasures: What cost cutting cutting lessons can small businesses teach big businesses in the coming months?
Actually, I think that in many instances, large enterprises are becoming the masters of minimizing costs and understanding efficiencies. They can squeeze costs out of any automated processes. But efficiency does not equate to effectiveness. In general, small businesses are more agile and adaptable to change. Doing old business processes efficiently is not as effective as redesigning processes to fit new business conditions or opportunities. That's why smaller companies are more likely to pick up new trends like cloud computing.
TechTreasures: Richard Stallman is quoted in the Guardian as saying about Cloud Computing: "It's stupidity. It's worse than stupidity: it's a marketing hype campaign." Do you agree or disagree with Stallman?
JN I don't really know where he is coming from. Cloud computing may be hype in some instances where the actual software is ill-defined, but it isn't stupid. I had an IT organization in a large bank point out that services like S3 or Google could provide storage at half the price they could internally. That sort of commodity service doesn't sound stupid to me.
Note: Next week I will publish a post on a talk I had with Rishi Chandra, who is the product manager for Google Docs Enterprise, about Google, Cloud computing and privacy and security issues.
