Call it one of the most expensive insurance policies in the world. Companies have spent billions of dollars over the years building and maintaining backup disk arrays and secondary data centers to keep things running in the event that something goes wrong.
Cloud turns backup and recovery on its head, making it possible to provision back-up sites as needed, for pennies. Ironically, however, this goes against the gut instincts of many IT executives, who spend a lot of time worrying about data security and availability.
That's the view of David Nichols, principal and Americas CIO services leader for Ernst & Young IT Advisory Services, who has been working closely with companies across the globe to identify cloud opportunities. I recently had the opportunity to chat with Nichols to get his take on the pluses and minuses of cloud computing, and he observed the approach is still in its early stages.
While “there is a lot of demand for cloud,” he confirms, most companies do not yet have a formal strategy or end-goal. That's because most companies have not reached the point where at least 30% of their workloads are carried in the cloud, he says. Once an organization passes that 30% threshold, cloud starts to become a serious part of the business.
And Nichols has heard a lot of arguments from both sides lately about the viability of cloud – the cloud not as secure as on-premises systems for data; the cloud is more secure than on-premises systems for data. On one side, he hears: “'There’s no way I can move mission-critical data off-premises. I can't allow stuff to not be within my four walls, how do we do disaster recovery, how do I make sure this stuff is restored?'”
Still, he relates, other executives say they favor the cloud precisely because it is more secure. “Another CIO told me that was exactly the reason he moved some of his stuff to the cloud. As he put it: 'If all they do is data storage, they’re going do it better than my people do it. That's all they do, every day. When your transmission breaks, are you going to take it to a generalist, or are you going to take it to a transmission specialist? Plus, cloud providers will have better procedures, more sophisticated and better data recovery procedures and more sophisticated firewalls.'”
Perhaps the best approach is to have the best of both worlds. Nichols says a hybrid cloud strategy, which incorporates both off-site and off-site services, provides a “failsafe” model for enterprises. “Maybe there are some things you can do in the cloud model, and some things that you can't because maybe you don’t feel as secure. But the cloud could be one more failsafe. Maybe you can get one or two or three more '9s' from a recovery perspective that you couldn’t have gotten otherwise. Maybe this is a cheaper way to get there than it was to have to buy all the stuff and house yourself. And that's just on the data storage side.”
By relying on the cloud for backup, it “provides one more failsafe approach, instead of having to buy a sophisticated server and RAID platform,” Nichols points out. “Its a pretty cheap solution to back it up in the cloud someplace, and therefore know you'll always have it in case something goes wrong.”
There are even rumblings from many IT executives that the cloud backup is quicker than the primary backup. There are cases in which cloud could function as the primary backup site, with on-premises backup as the failover environment.
The “hybrid” approach Nichols alludes to may be more common within many enterprises than all-cloud environment, he predicts. For the most part, cloud is still an under-the-radar phenomenon, and companies have not developed formal cloud strategies. “They’re not really sure what is the biggest impact,” Nichols says. “They’re not really sure how to go about it. Is this a cost-reduction exercise? Can we really use it to drive the business? Or is this only going to help us drive certain aspects of our corporate strategy, but not really moving the needle on our ongoing business?
Until cloud workloads surpass that 30% mark in organizations, cloud will “remain hidden within operating models within IT organizations,” he points out. In the long run, he predicts, cloud penetration within enterprises will reach 70%. As organizations move between the 30% and 70% points, expect to see widespread adoption of hybrid approaches to cloud computing – a blended strategy of using outside cloud services and internal private cloud.
At the same time, he says, any and all new software development – both within enterprises and among vendors – is now taking place around a cloud model versus the traditional on-premises approach. “Right now, we're at a pretty strong inflection point right now,” he explains. “Very little, if anything, being built on traditional go-install-on-your-local-device model. Almost nothing going forward is going to be built within that traditional framework.”
In the next installment of my chat with E&Y's David Nichols, we discuss how cloud is changing the roles and relationships of outsourcers, entrepreneurs, and IT professionals, with advice on building a successful cloud relationship.
