Dark cloud surrounds cloud computing

Here we go again, a technology will be introduced, a lot of good things will be said about it and after some time, the technology will be proven inefficient.

Remember what happen to data warehousing before? They say its the way to go but it failed to deliver what its supposed to deliver. The failure of data warehousing gave birth to datamarts which also failed miserably. Now the same thing is happening again with cloud computing.

A lot has been said about cloud computing, but the most prevalent of all is the cost efficiency of the said technology once applied in the enterprise space. Its much easier to deploy, easy to manage and will increase efficiency.

That is why the study entitled “Clearing the Air on Cloud Computing” released by McKinsey came as a big surprise when it concluded that outsourcing a typical corporate data center to a cloud service would more than double the cost.

Its study uses Amazon.com’s Web service offering as the price of outsourced cloud computing, since its service is the best-known and it publishes its costs. On that basis, according to McKinsey, the total cost of the data center functions would be $366 a month per unit of computing output, compared with $150 a month for the conventional data center.

“The industry has assumed the financial benefits of cloud computing and, in our view, that’s a faulty assumption,” said Will Forrest, a principal at McKinsey, who led the study.

Owning the hardware, McKinsey states, is actually cost-effective for most corporations when the depreciation write-offs for tax purposes are included. And the labor savings from moving to the cloud model has been greatly exaggerated, Mr. Forrest says. The care and feeding of a company’s software, regardless of where it’s hosted, and providing help to users both remain labor-intensive endeavors.

Clouds, Mr. Forrest notes, can make a lot of sense for small and medium-sized companies, typically with revenue of $500 million or less.

Instead of chasing cloudy visions, McKinsey suggests, corporate technology managers should focus mainly on adopting one building-block technology of the cloud model, virtualization. Such virtualization allows server computers to juggle more software tasks, and thus increase utilization, reducing capital and energy costs.

I am sure cloud computing advocates will not agree with the Mckinsey study. Expect a lot of reports and study to be released soon that will contradict and destroy this report. But I do have some concerns about cloud computing, and these are security and reliability.

The outages happening with Google and its services, problems with social networking sites plus the recent Twitter security incident will make one think if cloud computing is really ready for primetime.


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