Business disadvantages using cloud computing?

Contents
EXECUTIVE SUMMARY................................................................................................................................................................... 3 HYPE, FAD OR INNOVATION? ........................................................................................................................................................ 3 DEFINITION OF CLOUD COMPUTING ............................................................................................................................................ 3 IS CLOUD COMPUTING NEW? ....................................................................................................................................................... 4 CLOUD DEPLOYMENT MODELS: .................................................................................................................................................... 4 WHAT SHOULD CLOUD COMPUTING BE? ..................................................................................................................................... 4 DISADVANTAGES USING CLOUD COMPUTING.............................................................................................................................. 5 DISADVANTAGES: SECURITY...................................................................................................................................................... 7 DISADVANTAGES: DEPENDENCY ............................................................................................................................................... 7 DISADVANTAGES: COST AND FLEXIBILITY ................................................................................................................................. 7 DISADVANTAGES: KNOWLEDGE AND INTEGRATION ................................................................................................................ 7 DISADVANTAGES: Miscellaneous .............................................................................................................................................. 8 New business opportunities and conclusions ............................................................................................................................... 9 NEEDED ORGANIZATIONAL CHANGES ...................................................................................................................................... 9 Can Cloud computing enable new business opportunities? ..................................................................................................... 9 DONT GO?! ............................................................................................................................................................................... 9

EXECUTIVE SUMMARY
Cloud computing is hot. But severe business risks and challenges are involved to retrieve the promised business advantages of cloud computing. Conclusions: The main disadvantages are: security, loss of control, unstable cost structure , potentially decreased business flexibility, integration problems. An adaptive architecture, including a new business model must be developed to retrieve business value Organizational changes are needed for adapting the technology (procedures, skills, business model) Formulate and maintain an exit procedure to change from CSP (Cloud Service Provider). Cloud computing technologies and business models have not yet reached maturity. Standards are being developed.

HYPE, FAD OR INNOVATION?

Cloud computing is rapidly gaining the interest of service providers, programmers and the public as no one wants to miss the new hype. So the real questions need to be answered: What is the real business value? Whats the innovative part? What are keen pitfalls using cloud computing? Is clustering the same as cloud computing? What happened with virtualization, grid computing, the automatic data center and autonomic computing? What are the main risk involved?

What is the new vendor lock-in?

DEFINITION OF CLOUD COMPUTING

The NIST definition of cloud computing is: Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of

configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

IS CLOUD COMPUTING NEW?

Cloud computing is not a fundamentally new paradigm, it draws on existing technologies and approaches, such as: Utility Computing Software-as-a-Service Distributed computing Centralized data centers What is new is that cloud computing combines and integrates these approaches. It can be seen as the logical evolution in outsourcing IT services. The promise is that with cloud computing every company (big or small) can get IT services in a very simple way.

CLOUD DEPLOYMENT MODELS:

To make use of Cloud Computing companies can use services of a CSP (Cloud Service Provider). But be aware of the different cloud service models that are offered: Private Cloud: Internal within a company data center or dedicated leased; Public Cloud: Cloud services provided to many customers from a single technology stack; Hybrid cloud: Offers a possibility to mix private and public cloud services

WHAT SHOULD CLOUD COMPUTING BE?

In our opinion cloud computing should: Give you extra business value over a long period of time Ensures that the quick changing business needs can be supported better than using traditional IT services Be a technology that enables business innovation

Currently cloud computing involves: Virtualization Automatic Scalability (rapid elasticity) On-demand deployment Internet delivery services Open source software Open standards Business innovation and requires business adaptability

DISADVANTAGES USING CLOUD COMPUTING

Disclaimer: Cloud computing technologies and business models have not yet reached maturity.

All major CSPs ( Cloud Service Providers )are still working on research and development to give customers the level of services and quality required for crucial business processes, and accordingly the processes needed within CSPs and the IT technology used by CSP is growing towards a landscape of extreme complexity.

DISADVANTAGES: SECURITY
Security: No control over the business assets (data!). The main assets in every company are its data files with valuable customer information. A proper security model for cloud computing is not yet developed. Security, privacy and compliancy is still difficult for cloud solutions. Especially for public cloud services. Physical location of hardware and software is unknown. Site inspections and audits are hard. Availability. Constant connectivity is required. Failure to compliance. E.g. HIPAA, SOX, PCI, SAS 70 and audits. Risk of data loss due to improper backups or system failures in the virtualized environment

DISADVANTAGES: DEPENDENCY
Dependency (loss of control): Quality problems with CSP No influence on maintenance levels and fix frequency when using cloud services from a CSP. No or little insight in CSP contingency procedures. Especially backup, restore and disaster recovery. No easy migration to another CSP. Measurement of resource usage and end user activities lies in the hands of the CSP Tied to the financial health of another Company

DISADVANTAGES: COST AND FLEXIBILITY

Flexibility: Special customization not possible. Possible lower rate of business IT innovation. The technological innovation pace is dictated by CSP. Cost: Hidden cost (e.g. compliancy regulations, backup, restore, disaster recovery and problem solving.) Opaque cost structure due to highly flexible usage of cloud services; Cost advantages is as hard to get when using outsourcing for IT services in a traditional way. Risk of higher future is charges is real

DISADVANTAGES: KNOWLEDGE AND INTEGRATION

Knowledge:

 More and deeper knowledge is required for implementing and managing SLA contracts with CSPs Since all knowledge about the working of the cloud (e.g. hardware, software, virtualization, deployment) is concentrated at the CSP, it is hard to get grip on the CSP.

Integration: Integration with equipment hosted in other data centres is difficult to achieve. Peripherals integration. (Bulk)Printers and local security IT equipment (e.g. access systems) is difficult to integrate. But also (personal) USB devices or smart phones or groupware and email systems are difficult to integrate

DISADVANTAGES: Miscellaneous
Requires a constant Internet connection. Cloud computing is impossible if you can't connect to the Internet. Since you use the Internet to connect to both your applications and documents, if you don't have an Internet connection you can't access anything, even your own documents. A dead Internet connection means no work, periodand, in areas where Internet connections are few or inherently unreliable, this could be a dealbreaker. When you're offline, cloud computing simply doesn't work. Doesn't work well with low-speed connections. Similarly, a low-speed Internet connection, such as that found with dial-up services, makes cloud computing painful at best and often impossible. Web-based apps require a lot of bandwidth to download, as do large documents. If you're laboring with a low-speed dial-up connection, it might take seemingly forever just to change from page to page in a document, let alone to launch a feature-rich cloud service. In other words, cloud computing isn't for the broadband-impaired. Can be slow. Even on a fast connection, web-based applications can sometimes be slower than accessing a similar software program on your desktop PC. Everything about the program, from the interface to the current document, has to be sent back and forth from your computer to the computers in the cloud. If the cloud servers happen to be backed up at that moment, or if the Internet is having a slow day, you won't get the instantaneous access you might expect from desktop apps. Features might be limited. This situation is bound to change, but today many web-based applications simply aren't as full-featured as their desktop-based brethren. For example, you can do a lot more with Microsoft PowerPoint than with Google Presentation's web-based offering. The basics are similar, but the cloud application lacks many of PowerPoint's advanced features. If you're a power user, you might not want to leap into cloud computing just yet. Stored data might not be secure. With cloud computing, all your data is stored on the cloud. How secure is the cloud? Can unauthorized users gain access to your confidential data? Cloud computing companies say that data is secure, but it's too early in the game to be completely sure of that. Only time will tell if your data is secure in the cloud. Stored data can be lost. Theoretically, data stored in the cloud is unusually safe, replicated across multiple machines. But on the off chance that your data goes missing, you have no physical or local backup. (Unless you methodically download all your cloud documents to your own desktopwhich few users do.) Put simply, relying on the cloud puts you at risk if the cloud lets you down. Less control : this comes with handing over your data and information. Dependency on a third party: to ensure security and confidentiality of data and information. Long term dependency on cloud host for maintenance of your information .

New business opportunities and conclusions NEEDED ORGANIZATIONAL CHANGES

When using cloud computing the following changes are needed: Adjustment on the main business model Adjustment on architecture and design for new and current systems Adjustment on architecture method used to maximize the advantages of the new technology New approach to implement new solutions using CSP services Adjustment on maintenance model Adjustment on cost model Paradigm shift at current business and IT departments

Can Cloud computing enable new business opportunities?

New business models possible are e.g.: On demand IT Self service IT Pay-by-use

These models are possible from a infrastructure perspective , but also out of a business application perspective

DONT GO?!
Cloud computing is about an automatic data center from a IT perspective. But business and IT are allied. One of the major changes that comes with cloud computing is that there is a need to Automate the processes around the various tools and techniques used So if you did not succeed the last 4 years with e.g.: OA Building an automatic CMDB Automatic SCM (Software Configuration Management) Quality improvement for business and IT processes Governance Security baselines

Think again on how using cloud computing will impact your current problem fields