June 29, 2009

Enterprises say no to cloud computing

Despite the hype, few companies look to move to new model

By Jon Brodkin, Network World (US)

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Few enterprises are set to adopt cloud computing in the next year according to a survey from Information Technology Intelligence. The research company found that only 15 percent of corporate customers will have adopted cloud technology over the next year.

A survey of 300 corporations worldwide found that 38 percent are undecided or unsure about whether they will adopt cloud services, and another 47 percent said they are not considering implementing cloud in the next year. Security is the biggest roadblock.

"An overwhelming 85 percent majority of corporate customers will not implement a private or public cloud computing infrastructure in 2009 because of fears that cloud providers may not be able to adequately secure sensitive corporate data," writes Information Technology Intelligence principal analyst Laura DiDio in a new report.

The ITIC survey participants ranged from businesses with 100 users to large enterprises with more than 100,000 end users, in many types of industries. Companies in 19 countries were surveyed but 85 percent were based in North America.

The findings may be surprising given the industry's current obsession with cloud computing, but the numbers aren't too far off the findings of other surveys. Forrester recently found that 25 percent of enterprises with at least 1,000 employees are using or plan to use hosted virtual server offerings such as Amazon EC2, and that fewer than 20 percent of smaller companies plan to do so.

Earlier this year, Gartner said that cloud application infrastructure technologies are not yet mature and that adoption right now is limited mostly to "pioneers and trailblazers."

DiDio says current cloud adoption is lagging behind the hype, but that is to be expected.

"When you hear the next big buzzword or hype, whether it's SOA or SaaS or the new version of Windows, the adoption will be slower than what the press, analyst and vendor community leads you to believe," she said.

DiDio's poll calculated usage of both private and public cloud technologies in the aggregate. About 8 percent of respondents have already implemented either a public or private cloud service, she says.

Companies with at least 3,000 end users are moving faster on the cloud than their smaller counterparts, the survey found. Twenty-one percent have already adopted or plan to adopt cloud computing in the next year, and another 36 percent are considering doing so.

Vendors have not yet offered a clear roadmap on how they plan to secure data in the cloud, DiDio says. Therefore private clouds may end up as the model of choice for many businesses.

"I actually think private clouds are going to be more popular than their public cloud counterparts, particularly for mid-sized businesses anywhere in that 500 to 3,000 employee range," she says. "Folks are very risk-averse and that won't change."

While private clouds don't introduce the same security risks as public ones, adoption is going slow because IT managers are still getting up to speed on the technology, DiDio says. There is also considerable up-front expense in buying new hardware and other services and products needed to build a private cloud, she notes.

While security was the top concern cited by survey respondents, customers are also worried about availability risks in the public cloud model.

One IT manager in the survey said "the idea that I would trust my e-mail, financial transactions, or other day-to-day business operations to cloud computing is just asking for trouble. I do not even want to imagine all my users being dead in the water because my link to the Internet is down."

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