Forrester Cautiously Cites Cloud Computing as Cost-Cutting Cure
The incorporation of cloud computing into business operations is gaining momentum as a cost-effective way for organizations to utilize scalable applications and environments without the investment or commitment of installing in-house software programs. And according to a report from business and technology advisers Forrester Research, it's a beneficial strategy that companies should implement-after careful consideration.
"Cloud computing has evolved from being just a buzz word to becoming one of the most exciting concepts in developing IT today," Forrester's James Staten said in a report, "Inquiry Spotlight: Cloud Computing, Q2 2009."
"Forrester has seen a quickly expanding number of client inquiries around cloud computing, and this acceleration shows no signs of slowing," Staten said.
Cloud computing refers to a system of scalable, agile, Web-based services utilized by pools of customers who share the services' costs and resources (the word "cloud" symbolizes the Internet, or the entire shared network the service's information is accessed from).
Customers of cloud computing providers typically pay a subscriber's fee, essentially "renting" their desired services and using them only when they're needed (hence, the alternate moniker for cloud computing: "on-demand computing"). Major cloud computing providers include Amazon, SalesForce, Google, Microsoft and Yahoo. Common types of services include sales and customer service platforms, product promotion services, online testing and project collaboration sites.
The growing interest in cloud computing (Forrester reported more than 264 client inquiries about cloud computing in a 15-month period) led the firm to research common questions about the concept: Should I use a cloud computing service, and what information should I put in it? How will cloud computing services affect IT? And finally, what type of cloud computing service will meet my needs?
To address the first (and most common) inquiry, Forrester emphasizes that businesses must determine if using a cloud computing service would cost less than their current IT infrastructure, then consider what type of service is needed.
"You can't recognize-and convince businesses of-areas where cloud computing will save you money unless you know what you are already spending in specific areas," Staten said. The report said that start-ups and small businesses, as well as businesses launching temporary initiatives (such as a brand launching a product promotion), may benefit the most from cloud computing.
"By contracting with cloud providers like Amazon Web Services, companies can get on-demand environments for these initiatives much more cheaply, paying only for the time that resources are consumed," Staten said.
While cloud computing use can reward businesses with "major cost savings, scalable and dynamic environments, on-demand infrastructure and much smaller maintenance investments," according to the report, there is a downside: a looser grip on security control.
In response to questions regarding how cloud computing affects IT and what type of system will meet a business' needs, the report said that organizations with specific compliance requirements or those that feel uncomfortable handing information over to a public cloud should explore a hosted cloud.
That could include credit unions and their intense need to protect member data-and money.
"There is much hesitance over how much enterprise data should live in public clouds," Staten said. With hosted clouds, providers offer a dedicated pool of resources that include more custom service-level agreements and security configurations to meet business needs.
Before leaving their data at the mercy of a public cloud, businesses should verify their compliance and security requirements (for example, some require data to be housed within the business' home country, crossing some public cloud providers off the list), and ask the cloud provider for a copy of its SAS-70 Type II audit report or ISO 27001 certification, Forrester recommended.
An even more secure option is the internal cloud, which leaves room for the benefits of a shared environment but confines information within the business' walls.
"Enterprise customers with their own data centers have been the most typical examples so far of companies building internal clouds, and these internal clouds have been targeted-limited in size and scale-and not complete overhauls of IT," Staten said.
The firm also recommends making initial cloud computing decisions based on business size. For small businesses, public clouds are likely to be the best option. Large businesses with higher security concerns and complex infrastructures should consider hosted or internal clouds, or even a combination, with data split between internal and external clouds, Forrester said.
There's no doubt that cloud computing is hot right now. But considering whether the method is a good fit for a business-especially in the realm of security and compliance-is key before jumping on the bandwagon, Forrester advised.
"The efficiency, scalability and cost savings it brings make cloud computing something that businesses must consider," Staten said, "especially with 2009 as another slow year for the economy."