It's an important question, and for CIOs at big global enterprises, I have no argument with the notion that cloud computing's advantages come packed with some serious risks.
For small and midsize businesses, though, many of the objections to cloud computing simply don't hold the same power. Barry X Lynn, Chairman and CEO of 3Tera, says SMBs "can't afford not to do cloud computing right now."
Of course, 3tera is the maker of the AppLogic cloud computer platform, so he can hardly be accused of being unbiased. But he makes some intersting points about how cloud computing can have transformative effects on cash-strapped smaller companies:
"The most important thing, aside from specific savings, is that SMBs can now afford to do the things they couldn't do on their own. Not just do the same things for less money."
"When SMBs need to build an IT infrastructure," Lynn explains, "they can't go out there and start licensing great enterprise software." They simply can't afford it. That means no production-ready database clusters, no Oracle supported apps servers. Instead, they have to compromise and piece together an infrastructure with software they can afford, often open source.
"In the cloud, however, the infrastructure comes with the software," Lynn says, and you license what you need in "bite-sized pieces." You don't have to spend zillions of dollars, you just pay for what you use. It's the same world-class software, just scaled down. And having equivalent technology can make a big difference in leveling the playing field when competing against larger companies.
Just as important to Lynn, cloud apps and infrastructure can often be deployed in hours rather than the months it can take to build, integrate, configure, test, and deploy in-house systems. SMBs need to be agile to avoid being crushed, and long delays can be crippling.
Finally, there is the issue of the intellectual capital it takes for SMBs to create and manage their own IT infrastructure. "If you think good intellectual capital is unlimited and free, then there's no problem," he says. But if you'd rather spend your limited and expensive intellectual capital on making money for your company than on your IT infrastructure, cloud computing starts to look a lot more attractive. SMBs, he says, should outsource anything that isn't a core, differentiating value.
So What's The Problem
Of course, there's no such thing as a free lunch, so I asked Lynn about issues with integrating cloud computing apps and infrastructure with legacy technology. SMBs may not have as much legacy tech as enterprises do, but they also don't have the same level of resources to handle integration tasks.
Surprisingly, Lynn didn't think legacy integration was the big problem, claiming that it's no harder than other types of integration and that basic APIs and Web services would be sufficient in most cases. The vendors need to supply that API, he says, adding that, "I think that's going to happen fairly easily over the next couple of years," especially since there are already some APIs out there.
Instead, Lynn says, the real problem is inter-cloud integration: making things portable from cloud to cloud -- from Amazon to Force.com to Azure, etc. People want portability, Lynn says. "That's a totally different question being heaviily debated as to how that's going to happen."
Bonus: A somewhat unrelated, but interesting quote from Lynn: "Virtualization is a hammer. The cloud is carpentry."