The Benefits and Risks with Cloud Computing

Recently (February 1st), Microsoft began selling its cloud-computing services via Windows Azure and SQL Server, reenergizing the interest in this nascent technology (which is hardly a new concept—Hotmail has been using cloud technology for years; however, it’s now accessible to third parties as a technology solution).  As a result, it’s spurred some excitement from business and technology managers—many of whom may still be uncertain about the risks and benefits associated with the technology.

Though demand is rapidly increasing (worldwide cloud services revenue will reach $44.2 billion by 2013, up from $17.4 billion last year, according to research firm IDC), many business and technology decision-makers (BDMs, TDMs) are still a bit confused about what public and private clouds actually are.

A public cloud—such as Amazon’s Elastic Compute Cloud (EC2) or Microsoft’s Windows Azure ServicesPlatform—is a shared technology resource that’s available via the Internet and can be used on an as-needed basis. In contrast, a private cloud is created specifically for one organization’s use.

The benefits to the technology are apparent—both public and private cloud solutions are shaping the “evergreen” approach to IT.  Enterprises can easily obtain the services and technologies they need, exactly when they need them, without having to purchase and maintain (often) expensive in-house systems.  Think of it as “pay for play” on demand content a la Netflix OnDemand instead of paying for cable, that you may or may not use…

Further, the revised approach is also somewhat green-friendly:  Cloud computing also allows for a reduction in power consumption due to Enterprises being able to maximize resourcing, paying only for what they use, and NOT paying for resource downtime—instead, automatically reallocating system resources to another application in the cloud.  It’s inherently efficient.

The approach presents obvious flexibilities—speed to market, extensibility, systems flexibility and scalability.  But what about the risks?  Security has been flagged as a huge issue in cloud computing, along with transparency (depending on public v. private solution).  Further, in the ever-evolving space, concerns have been raised about data integrity, availability, and compliance. 

Rest assured that given the multi-billion dollar industry this is becoming, that the risks won’t soon be in the picture.