Gripe #3: "I can do this cheaper in-house."
The benefits of cloud computing don't necessary scale up. "If you have a large enough organization, the subscription model tends to lose some of its clear cost benefit," says Mike Pearl, principal in PricewaterhouseCoopers' Advisory practice and Leader of PwC's digital transformation and cloud computing initiatives. "Turning potentially thousands of employees loose onto the cloud introduces variability into costs [relative to fixed budgets]."
Chris Weitz, director of Deloitte Consulting, also observes diseconomies of scale at the high end. "For some of the larger enterprise clients of ours, who are able to scale relatively high and have good volumes and get good discounts from vendors, they're finding that it's not particularly advantageous from a cost perspective to go to a public cloud infrastructure, particularly as it relates to storage or other services that are relatively commoditized," Weitz says.
Nor is capacity management necessarily a strong selling point, as large enterprises tend to have a good handle on their demand curve for IT services. "They tend to not be exposed too much to the spikes of usage that a smaller company would have," notes Weitz.
Instead, flexibility is the area where the largest enterprises find the greatest benefit in the cloud. "It's the opposite of a startup situation, which has spiky usage patterns but can provision quickly," observes Weitz. "Big companies have smooth usage patterns but are slow to provision new resources."
Gripe #4: "I don't have enough control."
With internally managed and collocated facilities, IT professionals can precisely match the availability and uptime needs of the enterprise using dedicated equipment, selecting the most appropriate power supplies, cooling equipment, and server hardware.
That's not so easy to manage in the cloud. "When someone puts their data and applications in the cloud, it's almost impossible for them to know what specific hardware they're on, where their data resides, where their power is coming from, or if there's adequate cooling," says Charles O'Donnell, VP of AC power engineering for Emerson Network Power.
If you want to maintain maximum control, you may end up doing it in-house. "We have one very large customer that keeps revenue-generating applications on an enterprise farm, Tier 4 facility, and keeps their e-mail and product development at a Tier 2 facility," says O'Donnell. "If e-mail goes out for a little while, it's not a disaster. It costs them time and money but it's nothing like what happens if their enterprise facility were to go down."
"If I had a mission-critical application, where if it goes out I start losing current or future revenue, that's something I want to have complete control over myself," remarks O'Donnell.
