Educating you on the benefits and "how to" of integrating cloud computing with your business network.

A new list of cloud computing trends shows just how nervous the growing use of cloud services makes IT departments.

It’s easy to see why. IT staffs used to hold the keys to the kingdom — controlling what applications and data ran where and on what devices. That’s all changed — a lot — with the consumerization of IT and the advent of compute power that in-house developers can spin up on Amazon Web Services and pay for out of petty cash — without IT approval. Ditto the departmental use of easy-to-expense software-as-a-service applications. All of that erodes the power of IT folks.

Gartner, the big researcher, says it’s high time for IT to grab the bull by the horns, according to a list of 5 cloud computing trends released Monday.

For one thing, Gartner sees a growing need for what it calls cloud services brokerages (CSBs) — a new breed of middlemen that sit between the corporate users of cloud computing services and the cloud vendors themselves. These brokers would vet and/or approve cloud services before they get deployed.

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Election year polling shows Cloud Services trail Virtualization by double digits.

The Cloud has been a hot-button topic throughout the business world for too long to get accused of being a fad.  But is it still seen as possessing more sizzle than steak?  Hard to say, but cloud computing adoption rates remain a slow-grower – especially when compared with virtualization.

For five years, InformationWeek’s annual survey has asked the same question: “What are your company’s plans for cloud computing?” This year’s survey results were recently released.

In 2008, 16% of survey respondents said they had already implemented cloud computing. In 2009, it was 21%, then 22% in 2010. It jumped to 31% last year, and to 33% this year.  Depending on your expectations, doubling in five years the percentage of businesses using cloud services – or put another way, reaching 1/3 of businesses – is pretty impressive.  (Read more on InformationWeek’s survey here.)

But compare the adoption rate for cloud services to another game-changing technology: virtualization. For many – perhaps most – organizations, virtualization isn’t a matter of whether but how much. No one questions virtualization’s core value proposition; the only question is about the breadth of applicability.

In contrast, two-thirds of businesses either have decided the cloud isn’t for them or have yet to pull the trigger. The core value of the cloud may be, for many organizations, in question.

In an InformationWeek article released this week, they identified several factors that may help accelerate cloud computing implementation.  IT providers need to offer consistent pricing for cloud services to make the cost/value analysis less, well, cloudy.  Also, finding valid metrics and methods for measuring Cloud performance are necessary.

In short, the growing pains for cloud computing are not yet behind us.  But don’t count out the Cloud yet.  Of the two-thirds of businesses yet to pull the Cloud trigger, 40% are in the planning and evaluation phase now.  In fact, only about 1/4 of businesses have no cloud computing plans at present – down significantly from 50% just five years ago.

Five years ago, “the Cloud” was a, well, cloudy concept for most businesses. Today, businesses are embracing cloud infrastructures at an accelerating pace. And for businesses that are yet to fully embrace the Cloud, many use cloud infrastructure to extend and enhance their computing resources available for everything from corporate infrastructure to sales cycle and CRM. Businesses can do a lot in the cloud – and cheaply. But some modicum of care is advisable.

Cloud computing offers significant benefits and causes new concerns. Balancing the benefits and the concerns is something each business owner, C-level exec and IT professional needs to do.

The Cloud makes available a vast amount of resources at bargain-basement prices. It’s an easy fix when the answer hardware replacement costs pennies an hour instead of hundreds or thousands of dollars in Cap Ex. But before pulling the rip cord and finding no parachute, businesses need to take stock of their ability to manage these new resources. Do you have adequate staff to utilize all this new computer horsepower? Do you have IT support up to the requisite re-design of the way they will be needed to support your firm in the Cloud? While cloud computing offers many benefits, it cannot hire you new staff or train your existing staff to fit.

Another thing to consider is that using cloud computing changes the cost of doing business. Instead of the sunk cost of physical hardware in your data center, the cost is measured very clearly by the amount of time you use hardware (a sort of real or virtual “pay by the drink”), the hardware and software you need, and the amount of data that flows through the system. Using cloud resources in a cost-effective manner means using only the hardware you need, only for as long as you need it and only passing data around if you really need to.

When using cloud computing environments, the costs are switched from Cap Ex (one big upfront cost in an asset that depreciates over time, and minimal cost per use) to Op Ex (little or no upfront cost, no depreciation, but pay per use). This means utilization can and should be optimized, requiring better tracking on number of active users, etc. Better communication about resource needs between management/users and IT can save – or cost – your firm significant sums.

Know what your dollar is buying you. Cloud providers offer different types of services, from backups to load balancing across time zones to uptime guarantees. Pay for what you need, and don’t pay for it if you don’t.

Cloud computing offers infrastructures that are more scalable and adaptable than ever before. Yet, that scalability and adaptability needs to be effectively managed if business is to optimize the benefits of the Cloud. Businesses shifting to the cloud may also need to re-train and re-tool staff and methodologies. It isn’t enough to embrace the Cloud, you need to “work it” too.

Cloud computing, in its typical form, offers valuable business advantages, but it also poses some significant limitations and unexpected costs that should be thoughtfully considered before “taking the plunge” to move toward Cloud services. Among the most prominent considerations in this regard is the increased fragmentation of IT services as well as the inherent bandwidth and reliability limitations of your Internet connection.

Limitation #1: Fragmentation of Services – the dilemma of Internet-delivered cloud computing

The productivity and cost benefits offered by cloud computing are counter-balanced by the added complexity it brings to managing your network. Now, instead of one vendor, your company has multiple vendors to deal with.

In the Cloud, your network becomes de-centralized and more difficult to manage. The current model for cloud computing is comprised of multiple Internet-based application providers hosting specific programs and data for your company on their servers. Your company accesses applications over an Internet connection, along with all the data created using their applications, not yours. You have turned over specific apps into the hands of outside providers. But you still have the responsibility to manage your own network components such as your router and firewall, Internet circuit, PCs and laptops, any servers still at your location, networked printers, copiers, fax machines, wireless access points, iPhones, iPads, BlackBerry devices, SmartPhones, and PDAs.

These Cloud applications providers host specific programs for you and can’t help your company with all of the other components and devices that are part of your network. They can only help you with the specific programs they’re hosting. So, by outsourcing certain software and functionality to Cloud application providers in an effort to reduce the complexity of your IT systems, you’ve actually increased that complexity. By transferring only specific services and functionality to hosted service providers, your company becomes mired down in finger pointing and uncertainty, especially when it comes to getting important technical problems and issues resolved. This will ultimately will increase the costs of managing your IT systems.

Your business needs only “one throat to choke,” not several, when your network isn’t working properly and your employees are losing productive hours while waiting for the technical problems to be resolved.

Simpler is better. The greatest efficiencies come with increased centralization of IT systems and management processes, not with more decentralization.

Limitation #2: Internet Bandwidth

With applications delivered by cloud computing, your network will perform only as fast as your Internet connection will allow.

But your Internet connection is far slower than the existing connection between internal servers and workstations in your office.

If you have a T1 for Internet access, your Local Area Network, that connects everything together at your office campus, is 650 times faster than your Internet connection!  There’s simply no way to make programs and data access perform as quickly over a slow connection.

Limitation #3: Internet Circuit Reliability (or lack thereof)

Depending entirely on your Internet connection to access certain business-critical programs and data is risky, especially when your Internet connection goes down.  When the connection to the Internet is lost, so does productivity. Your staff cannot access important programs and data.

There are complex and costly ways to address this potential crisis in advance – like installing and paying monthly fees for a second high-speed Internet connection, plus a second router and firewall, plus a system to provide automatic failover if your primary circuit goes dark. This is another example of increasing complexity and extra costs to your network in one area to decrease complexity, headaches and expenses in other areas.

The Answer: Local Cloud Computing

The current version of cloud computing presents too many limitations and added complications. A better solution will provide the benefits of Cloud-hosted hardware and software by addressing the problems resulting from a) lost Internet connectivity and b) fragmentation of services.

Local Cloud Computing addresses these two key areas of improvement. First, it provides an on-site device that prevents interruptions to productivity when the Internet connection is disrupted. And secondly, it provides a  local trusted advisor – a “boots on the ground” local IT provider – as a dedicated part of your business’s IT support team. This trusted local advisor is an essential element to helping your business navigate current technologies and leverage them to your company’s greatest advantage.