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Should Enterprises Be Wary of Cloud Computing?

Ovum, a tech analyst consulting firm, is recommending that enterprises take a cautious approach to Cloud Computing, citing outages from Amazon and Google, as well as management challenges, as examples.

“Enterprises are right to be cautious about relying on such consumer/SME-oriented suppliers for anything resembling a mission critical application or service,” said research firm Ovum in a report.

“A spate of service outages on the Amazon and Google platforms has increased enterprise caution about the reliability of consumer-market-oriented cloud providers.”

Personally, I see Cloud Computing taking a few hits on the chin next year as firms take a wait-and-see on what Web 2.0 firms will make it. Trusting data to a company that might not see the end of 1st quarter 2009, is enough reason to hold on to that precious data and keeping it local.

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6 Comments

  1. Sumocat

    12/22/2008 at 11:49 am

    Ovum’s warning seems focused more on consumer-level services than on whether or not it is cloud-based. I personally think cloud computing is fine for enterprise if it is done on the enterprise level, i.e. run on one’s own servers.

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  2. Rob Bushway

    12/22/2008 at 12:01 pm

    I disagree – they are clearly talking about enterprises depending on Amazon’s S3 services and the companies that are building applications using that infrastructure, Google Apps for Domains, Gmail, etc

    Now, cloud application that are built and managed internally are certainly ok

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  3. Sumocat

    12/22/2008 at 1:36 pm

    On the contrary, the Ovum quote refers to “consumer/SME [small & medium enterprise] suppliers” and “consumer-market-oriented cloud providers.” They specifically cite services that are not designed for big enterprise.

    Their mention of Amazon and Google is in reference to the greater awareness of unreliability generated by their service outages, but the mention of specific Google and Amazon services is not credited to Ovum. I suspect Computerworld put a distinct (but reasonable) tilt on the Ovum report.

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  4. Rob Bushway

    12/22/2008 at 4:45 pm

    good point, Sumo.

    Reply

  5. GoodThings2Life

    12/22/2008 at 8:36 pm

    A month ago I took a position with a health-care firm, and I can definitely say that as they expand from a surgical center to a full hospital, patient confidentiality and security is my biggest concern.

    Sumocat makes a great point that some cloud services when provided by the enterprise within the enterprise are certainly beneficial. I plan to roll out Microsoft Sharepoint services in the very near future as an example.

    But I am very leery about having enterprise data in the public cloud. It’s flat out dangerous, in my opinion. I was quite annoyed when I took the job to find out that half the business is still using AOL to conduct operations via email, and I’m in the process now of migrating them to Exchange accounts.

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  6. JimAtLaw

    12/23/2008 at 9:33 pm

    The terms of service on many cloud provider sites allow them to use your data for their own purposes – potentially or actually compromising the confidentiality of data regarding (or belonging to) your customers and other third parties to whom you have obligations. Consider the implications of this carefully before you proceed here – possible liabilities include not only breach of contract actions, but regulatory privacy violations (think HIPAA or financial privacy regs under Gramm-Leach-Bliley), intellectual property infringement claims (can you give Google a license to your business partner’s trade secrets?), etc.

    You might also, for example, give up the patentability of an invention by disclosing it to a third party who is not obligated not to disclose or use it. In short, proceed with great caution IMHO, and talk to your counsel before using cloud providers for anything.

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