Blame consulting firm McKinsey & Co. for the bad weather. It recently published a study on cloud computing that warns companies about falling for cloud computing hype.
"Clouds already make sense for many small and medium-size businesses, but technical, operational, and financial hurdles will need to be overcome before clouds will be used extensively by large public and private enterprises," the report states.
The report recommends that CIOs focus on virtualizing storage, network operations, and other critical business infrastructure rather than falling for the pipe dream of "internal clouds," which appears to be code for data centers with virtualization.
In a post on Google's enterprise blog, Rajen Sheth, senior product manager for Google Apps, politely suggests that McKinsey doesn't get it.
He explains that virtualization is not the same thing as cloud computing. Virtualization has benefits, he says, but those benefits are magnified when backed by scalable data centers operated by the likes of Amazon, Google, Salesforce, and soon Microsoft.
"In this model, customers can leverage hardware infrastructure, distributed software infrastructure, and applications that are built for the cloud, and let us run it for them," said Sheth. "This offers them much lower cost applications, and removes the IT maintenance burden that can cripple many organizations today. It also allows customers to deliver innovation to their end users much more rapidly."
The McKinsey study, Sheth argued, only considers hardware costs. He explains that Google's cloud not only offers economies of scale most companies can't match, but also lets companies adapt to service demand and innovate more easily.
He pointed to the White House's recent use of Google Moderator, a question-submission application powered by Google App Engine, as an example of the scaling advantage of Google's cloud. It was able to handle 100,000 questions and more than 3.5 million votes, a surge of activity many IT operations would have trouble handling without adequate planning and resource allocation.
"There is limited value to running an Exchange Server in a virtual machine in the cloud," Sheth said. "That server was never designed for the cloud, so you don't get additional scale. You'd also need to continue to maintain and monitor the mail server yourself, so the labor savings are marginal."
Google's value proposition -- in the context of Gmail -- is handling that for you, at about one-third of the cost of running a privately hosted mail server, with 100 times more storage and the frequent addition of new features, he adds.
How are other companies striking a balance between innovation and cutting costs with cloud computing? InformationWeek has published an independent analysis of this topic. Download the report here (registration required).