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Risks and Trends of Cloud Computing

The IT industry has always been full of buzzwords and technical jargon that can seem more like an almanac of B-List movies than a working lexicon. Cloud computing is one such term that has been heavily used by marketing teams. This short article will review what cloud computing is all about, and the associated risks and benefits.

Gartner's definition is that cloud comprises "a style of computing where massively scaleable IT-enabled capabilities are delivered as services to external customers using internet technology". Wikipedia has a more technical definition: "Cloud computing is Internet (cloud) based development and use of computer technology, whereby dynamically scalable and often virtualised resources are provided as a service over the Internet". The common theme seems to be reliance on the internet for providing a service to users - e.g.. Google Apps, which provide common business applications online. Lori Macvittie, from Computer Weekly, defines cloud computing as "...essentially a deployment model. If it provides a platform on which you can develop and/or deploy an application. Dynamism and resource sharing are the key architectural indicators of cloud computing" So one can understand why Microsoft executives shiver at the thought of Google providing cloud computing as it could potentially lose them billions of dollars in licensing revenue. But more importantly, what are some of the risks of cloud computing?

Considering the benefits of lower cost, faster deployment and no maintenance worries, it is clear why cloud computing is attractive during an economic downturn. From an IT perspective it means someone else handling the maintenance, performance and capacity issues. For highly regulated industries like insurance and healthcare with the data protection act, cloud computing can be very risky. Data Protection Acts require businesses to control the way personal data is stored and used, but this is difficult with cloud computing. So unless clients can have some control over how and where data is handled and stored, it may not be a viable alternative for many companies. Another concern is the lack of business process management services offered by cloud computing, so the overall business impact from outsourcing IT services might be hard to measure and manage. Finally, it may be difficult for businesses to truly understand the role cloud computing should play in their IT strategy. By definition, it has a very low cost of entry, but will the benefits outweigh the complexity brought on but another computing delivery model?

Gartner predicts cloud computing will begin to mature and be dominated by a few large players by 2011. They estimate it will take 7 years before we will see mainstream critical mass and commoditisation. Technology deployed through cloud computing may satisfy short-term needs, but has no more chance of delivering longer term benefit if services are not selected carefully and their use managed properly. As Thorp Consultancy stated in Computer Weekly "Signing up to a cloud computing service without being aware of the legal and compliance risk and without ensuring the business has processes in place to manage, measure and use that service, could be a recipe for failure". But during these economic times, companies are prepared to take risk for reducing costs, so we will undoubtedly see Cloud Computing continue to grow.

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