Dec 152015

Looming Threats in Cloud Computing
A lot has changed in a few years.

When I talked about cloud three years back, I got frownie-faces from my peers. Skeptical looks that belied a deeper-seated fear or trepidation, probably having more to do with their internal image of what a CIO should be than the promise or peril in the new technology.

Now, enthusiasm runs ebulliently through the vendor community, animating the animal spirits and spurring on entrepreneurs in search of profits and glory. Cloud has been elevated to high strategy on the billionaire chess board. Mergers and acquisitions are abuzz. Amazon, armed with an overly energetic workforce, gets hypercompetitive in all ways good and ill, supplanting Oracle as one of our most vociferous vendors and perhaps the new alpha predator. Numerous smaller vendors — tiny even in the aggregate, compared with Amazon’s might — are quickly learning the new cloud lingo, differentiating themselves from Amazon and contemplating symmetrical and asymmetrical warfare. Today it’s Everyone vs. Amazon.

In the CIO office, hybrid cloud is not avoided and is now assumed. CIOs are no longer fearing it, but trying to rope it in. The corporate data center business is officially in decline. Legal staff are taking a closer look at all the agreements the business people previously signed willy-nilly. Like a formerly thrill-seeking teenager who has sworn off having secret parties while her parents are away, business users may be getting over their glee in the power of their corporate credit cards and starting to work more maturely with central authorities in cloud contracting.

Amidst all this market kerfuffle, my teams are currently immersed in a slightly provocative and full-throated effort to vacate our data center. We have been looking around to see how the marketplace has shifted, where it has not, and, more importantly, what threats we are likely to face as we all go to the cloud. Looking ahead as IaaS and cloud technologies advance, in a recent CIT Journal article I identify seven threats in cloud computing that are likely to have adverse impacts. These are:

  1. The behavioral inertia in vendors and companies around adopting the new cloud economic model
  2. Struggles for dominance between cloud providers, resellers, and end-using companies regarding contract terms
  3. A lack of imagination and planning regarding significant potential IaaS market failure or other black swan events
  4. Companies providing no credible threat of defection, thus allowing vendor lock-in and lack of price-performance competitiveness
  5. Poor understanding by companies regarding how their workloads actually consume IaaS resources, preventing companies from extracting full value
  6. Continued merger activity in the market, which can reduce supply chain diversity and competitiveness
  7. Difficult considerations regarding countries that insist data for their companies cannot leave their borders, also known as data sovereignty concerns

I believe that, collectively, CIOs and their companies will have more to say about how the IaaS market unfolds and that CIOs have a responsibility to shed light on these issues.

Photo via Wikimedia Commons.


Vince Kellen, Ph.D.

Vince Kellen, Ph.D. is a Senior Consultant with Cutter's Business Technology & Digital Transformation Strategies and Data Analytics and Digital Technologies practices. Dr. Kellen's 25+ years of experience involves a rare combination of IT operations management, strategic consulting, and entrepreneurialism. He is currently CIO at the University of Kentucky, one of the top public research institutions and academic medical centers in the US.


 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>