Hi Bill! I agree with you that in the near future that companies will keep their critical businesses in house. However, I see a gradual progression in the comfort level of spanning critical business service across both the internal and the private cloud. This progression will happen at two levels:
- In the Dev/test environments associated with the business
This is very similar to the adoption curve of virtualization technologies and their prominence in dev/test environments. The idea is to get new systems up and going. Once done retire or re-use at a later time without having to maintain "inventory". We will probably see the same concept stretched to the external cloud
- Parts of a key business service
Key business service such as the Insurance under writing, online banking, Supply Chain etc are composite applications that have multiple parts/components and span from Mainframe to Mid tier, Load balancers, DBs etc. Companies might be more comfortable in stretching parts of the service to the cloud and not the complete application
The key influencers to the adoption are probably going to be following:
- Can external service providers provide economies of scale to reduce the cost of a service ?
This might be easier said than done as customers do not have good internal metrics to keep track of their own costs to benchmark against what an external service provider offers. (This opens up a different discussion on how Service Providers position and market their offerings to overcome this). In my opinion, cost transparency is a better influencer of behavior as opposed to charge-back as company dynamics differ with regards to charge-back but are consistent when it comes to cost transparency.
- Can external providers provide the required performance and reliability ?
Marketing campaigns such as dollar a day per VM are innovative, but the key is going to be around how fast and relialbly new services are provisioned in the environment. And do they provide the required service levels? Internal IT always things that they can do the same job better and quicker. This in many cases is for right reasons.So the cynics will always be out there.
It will start with components that have the least security and compliance regulations We probably need to adjust how we audit and run internal compliance on systems that span both the private and external cloud. A side question is - How do you effectively secure the data that is being resides in the internal cloud but is being accessed from a system in the external cloud?
- Buying behavior and expense accounting
Shifting expenses from CAPEX to OPEX has advantages but the challenge is around how do you effectively balance the two?
I have not put a lot of thought around this but this is something that the Lines of Business need to account for. Budgets need to be predictable and companies need to do a balancing act between what shows up as an Asset and what shows up as pure operational expense. I would love to get a broader insight about this from other members of the forum
Some thoughts here. Would love to get additional comments etc on this.