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Cloud Computing is all the rage nowadays. It has been a trending topic for quite some time. I recently attended the Association for Women in Technology (AWT) forum. It’s a great non-profit organization by the way, that gives scholarships to young women to help them pursue their careers in the technology sector. The hot topic for this forum was “Conquering the Cloud.” The panelists were top players in technology at widely reputable companies. According to Jeff Brown, the VP of Sales at Savvis, and moderator for the event, the Cloud is not a new technology. It has just evolved over time with IBM coining the term “Cloud” in the mid 90’s. We are nowhere near conquering the Cloud and there doesn’t seem to be a consensus on the definition of Cloud. He shared that the Cloud is “the illusion of infinite capacity,” which was imparted to him by one of his clients.

AWT cloud computing

The Cloud offers many services including security, compliance, storage, data backup, redundant power, basically the IT infrastructure. Companies either offer SAS (software as a service) or IAS (infrastructure as a service), essentially software and/or hardware services on the Cloud. There are three types of Cloud services – public, private, and hybrid. The Public Cloud is for both customers and employees to gain access to company resources that are both free or/and paid (i.e. Bing, Google, Yahoo, The New York Times). The Private Cloud is only accessible to those who are authorized to use the services such as employees (i.e. VMWare, Citrix). The Hybrid Cloud is a mix of both public and private services.

There appears to be a consensus among all the panelists that the Cloud works in their business models for a number of reasons.

Scalable

With the Cloud there is no longer a need to invest in a physical infrastructure and numerous datacenters, especially on applications without a competitive advantage according to Dawn Trautman (Sr VP of IT and Strategic Planning at Pacific Life) or for consumer driven sites like Myspace and less popular applications according to Cindy McKenzie (Sr VP of Enterprise Application Services at Fox Entertainment). Also, you are better equipped to justify the idle months versus the busy months. The Cloud allows for economies of scale.

Agile

What was once a project in itself – deploying an application – is now only a task because rather than a lead time of say, several weeks, it only takes minutes on the Cloud. Also, software updates have become a thing of the past, saving a tremendous amount of time and money.

Cost Savings

No technology infrastructure, no data centers, and less IT support are all costs that can be either avoided or mitigated in the long run using the Cloud. Your TCO (total cost of ownership) can be significantly less using the Cloud. Some of the spending can be shifted to hiring experts who are experienced in reviewing and managing vendors, which is an absolute must among all the panelists.

So what are the challenges?

Contracts, contracts, contracts! That appeared to be the accord among all the panelists. SAS 70 (Statement on Auditing Standards) audits are recommended for commercial sites that are end user focused. SAS vendor contracts were discussed extensively in terms of its legal ambiguity due to the boilerplate contracts that vendors offer. Geraldine Ramezani (CTO at Toyota Financial Services) advises that you “look before you leap” into any contract and Jena Lee (VP and CIS Officer at Apria Healthcare) suggests that the more certifications vendors possess that can demonstrate their security the better. Cindy urged to do a review process on these vendors and put everything in the contract stressing that you can’t overemphasize the security that you need for your company. Involving the major departments, especially legal and risk management is necessary to ensure your company is protected from security breaches or catastrophic failures. Also, they indicated that SLA’s that guarantee 99.9% uptime is non-negotiable. This is why hiring an expert with strong supplier management skills is pertinent and essential to finding other creative ways to negotiate contracts with vendors.

Josh Fraser (VP of Biz Dev at RightScale) stated that the Cloud has “introduced things never possible in the past that’s possible now.” And he added that because of the Cloud there are “no barriers anymore” and loss of some control is inevitable. Cindy noted that the Cloud changes the entire system development lifecycle and advises that you start early and get departments involved.

Personally, I have a small user experience design company and most of my resources are on the Cloud from Google Apps to BaseCamp. You may not realize it, but you’re probably using a wide array of Cloud services as well.

So what do you say to Cloud Computing? Yay or Nay and why?