A recent article in The Economist (Aug 30, 2014) reminds us again that companies are embracing the cloud much more slowly than its proponents had expected.
According to research firm IDC, businesses will spend about $100 billion on cloud computing this year. That sounds like a lot, until you put it up against the roughly $2 trillion that companies will spent overall on I.T. That’s about 5% of computing budgets, including large companies, going to the cloud. A bit underwhelming, considering all the press and the hype of the past few years.
To overcome this reluctance, the big cloud storage providers – like Amazon, Google and Microsoft – are slashing cloud storage prices radically. Prices are likely to fall even further. The article quotes marketing firm IPG Mediabrands CIO Samuel Chesterman, saying “Every cloud provider will bend over backwards to match rivals’ prices.”
The cloud promises and indeed probably presages a Cheap Revolution. It should make storage cheaper and cheaper, while bringing down the cost of managing applications. And indeed, for things like file storage and archiving, email and a host of web services it has.
But in other areas, inroads have been modest at best. In one of our previous (March 27th) posts, we noted Panorama Consulting’s recent survey that indicated that cloud usage in the ERP space had suffered a severe decline (of nearly 50%) in the past year.
Meanwhile, security foibles are certainly not helping cloud’s reputation. The recent and much ballyhooed scare over hacked celebrity photos from Apple’s iCloud, along with recent Internet outages at places like Facebook are not helping.
But in the long run, these are merely speed bumps. I’ve long held the view that the cloud is inevitable. More tangibly, the cloud will be to the 21st century what the grid was to the 20th: always on, ubiquitous, everywhere. It’s just a matter of time.
And in the short run? Probably, a hybrid-cloud solution makes the most sense. You utilize the cloud for the uses for which it’s optimized. Again, storage… backup… email… and an unending library of applications.
But for the business world, some things are just too valuable – and the cloud still immature and insecure – to risk it all. For these applications – and our specialty, ERP for manufacturers, surely fits this bill – local hosting still makes sense. If I’m a small business owner, I want to be able to walk down that hall, pat that server on its proverbial head, and know that my data and applications are right there where I can see them. With sufficient backup and power precautions, I know I’ll rarely be down for long, and I know my data can be kept safely where it is.
To be sure, precautions are necessary. I.T. providers exist for a reason you know. But at the end of the day, with my business on the line, I want my data secure, my applications local, and my business away from the eyes of snoops, hacks, even the government (nowadays).
Give cloud its due. Hybrid too. And local hosting. For everything there is a season.
In the meantime, try to keep your nude selfies to a minimum.