Is there still a decade to go for actual Cloud adoption?


In spite of witnessing sea change in the CIOs’ attitudes about Cloud Computing, Nicholas Carr states that the actual adoption of Cloud Services remains in its infancy. Companies have diverse perceptions about Cloud advantage and have restricted views toward its adoption. Mostly, this decision gets influenced according to the CIOs’ company size.


Two months after the InformationWeek conference, on December 9, 2010, the chief information officer of the United States, Vivek Kundra, released a sweeping plan for overhauling the way the federal government buys and manages information technology. The centerpiece of the plan was the adoption, effective immediately, of what Kundra termed a ―cloud first policy. Noting that the government had long been plagued by redundant and ineffective IT investments, which often ended up ―wasting taxpayer dollars, he argued that a shift to cloud computing would save a great deal of money while also improving the government‘s ability to roll out new and enhanced systems quickly.


To speed the adoption of the plan, Kundra ordered the IT departments of every government agency to move three major systems into ―the cloud by the summer of 2012. At the same time, he announced that the government would use cloud technologies, such as virtualization, to reduce the number of data centers it runs from 2,100 to 1,300, that it would create a marketplace for sharing excess data-center capacity among agencies, and that it would establish performance, security, and contracting standards for the purchase of utility-computing services from outside providers.


Once fully in place, the ―cloud first policy, Kundra predicted, would transform the government‘s cumbersome and inefficient IT bureaucracy into a streamlined operation able to deliver valuable new services to the American public. ―The Federal Government, he wrote, ―will be able to provision services like nimble start-up companies, harness available cloud solutions instead of building systems from scratch, and leverage smarter technologies that require lower capital outlays. Citizens will be able to interact with government for services via simpler, more intuitive interfaces. IT will open government, providing deep visibility into all operations.


Kundra‘s plan was remarkable for its scope and ambition. But even more remarkable was the fact that the plan provoked little controversy. Indeed, its release was met with a collective shrug from both the public and the IT community. That reaction, or, more precisely, lack of reaction, testifies to the sea change in attitudes about cloud computing that has occurred over the last few years.


When The Big Switch was published in January 2008, awareness of the possibility of providing data processing and software applications as utility services over a public grid was limited to a fairly small set of IT specialists, and the term ―cloud computing was little known and rarely used. Many IT managers and suppliers, moreover, dismissed the entire idea of the cloud as a pie-in-the-sky dream. Cloud computing, they argued, would not be fast enough, reliable enough, or secure enough to fulfill the needs of large businesses and other organizations. Its adoption would be limited to only the most unsophisticated and undemanding users of information technology.


Today, just three years later, the skepticism has largely evaporated. There is still debate about how broadly the utility model will ultimately be adopted, but most IT vendors, computer engineers, CIOs, and technology pundits now accept, almost as a matter of faith, that the cloud will be a fundamental component of future IT systems. Even Microsoft‘s chief executive, Steve Ballmer, once a vocal critic of utility computing, has become a true believer. He said of the cloud in a 2010 speech, ―It‘s the next step, it‘s the next phase, it‘s the next transition. At Microsoft, he continued, ―for the cloud, we‘re all in. A few months later, the software giant put an exclamation point on its CEO‘s words when it announced it would spend hundreds of millions of dollars on a global ―cloud power advertising program, its largest ad campaign ever.


A recent survey of 250 big international companies found that more than half of them are already using cloud services, while another 30 percent are in the process of testing or introducing such services. Only 1 percent of the companies said that they had rejected the use of cloud computing outright. In addition to Microsoft, most other traditional IT suppliers, including hardware and software makers as well as outsourcers, systems integrators, and consultants, are rushing to roll out and promote cloud services, and leading pure-play cloud providers such as, Amazon Web Services, Google, and Workday are rapidly expanding their offerings and ramping up their sales efforts. Many billions of dollars are being invested every year in the construction of cloud data centers and networks, a construction boom that echoes the one which accompanied the rise of electric utilities a hundred years ago.


But, truth be told, all this frenetic activity and marketing hype is a bit misleading. The business world, when it comes to the cloud, is far from ―all in. Outside the federal government, cloud-first policies remain rare. While most companies have embraced the theory of cloud computing, few have placed the cloud at the center of their IT strategy, and the actual adoption of cloud services remains in its infancy. Companies are, to be sure, using some cloud services and experimenting with others, but corporate investments in cloud computing, while growing at a healthy clip, still represent a small fraction of overall IT spending. And the investments that are being made tend to be narrowly focused on popular software-as-a-service applications. Only about 3 percent of big businesses are tapping into cloud data centers to run virtual servers, and fully 85 percent have no current plans to use such utility computing infrastructure, according to a 2009 survey. An equally high percentage say they have no existing plans to use the cloud for data storage.


Much of the wariness about moving too quickly into the cloud can be traced to the many uncertainties that continue to surround cloud computing, including issues related to security and privacy, capacity, reliability, liability, data portability, standards, pricing and metering, and laws and regulations. Such uncertainties are neither unusual nor unexpected; similar ones have accompanied the build-out of earlier utility networks as well as transport and communications systems. Another force slowing the adoption of cloud computing is inertia. Many companies have made huge investments in in-house data centers and complex software systems and have spent years fine-tuning them. They are not going to tear everything out and start from scratch.


For large businesses in particular, we are still at the beginning of what promises to be a long period of transition to cloud computing. The cloud is revolutionizing business computing, but this will not be an overnight revolution. It is one that will, as I argued in The Big Switch, play out over the course of at least a decade—and more likely two. That does not mean, though, that corporate executives and IT professionals should be complacent. The current transitional period will be marked by myriad advances and setbacks as well as many upheavals—not just technological but also commercial and social. Making the wrong choices about the cloud today could leave an organization at a disadvantage for years to come.


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