Enterprise 2.0 Conf: Move all your IT to the cloud: Cloud computing providers try to convince CXOs to take the plunge

by David Spark on June 9, 2008

CXOs on one side of the podium and cloud computing providers on the other side. Amazon, Google, and Salesforce.com each got up and tried to convince the CXOs to move all of their IT operations to the cloud.

Here’s a summary of the initial arguments.

Amazon’s argument:

  • Your company doesn’t run better if you create your own electricity, so you shouldn’t be dealing with your own storage. In fact, Amazon’s tagline is “We make electricity so you don’t have to.”
  • The price of admission to delivering Web services can be very high.
  • Amazon’s cloud computing service is Amazon Web Services (AWS) and their motto for cloud computing is that it be “Easy to use, Fast, Elastic, Highly Available, Pay as you go.”

Google’s argument:

  • Eight out of ten dollars spent on IT is not contributing to business change and growth. Google believes that cloud computing is the answer to reducing wasteful or “dead money” IT spending.
  • Wants to bust the myth that cloud computing is not secure. Reminds me of the days of Larry Ellison who tried to convince people about the security of the Net PC. Ten years ago I remember hearing him boastfully say that data at Oracle is more secure than it is sitting on your hard drive at home.
  • You’re not moving from zero risk. Lots of data like credit card information is stolen from laptops, hard drives, and thumb drives.
  • Scale is appropriate for the enterprise. Points to how they quickly scaled up Google.com, plus they have plenty of enterprise clients using Google Apps’ messaging and collaboration, plus security and compliance.

Saleforce.com’s argument:

  • First point to their own success with cloud computing. Salesforce.com is purely a software as a service company built for the enterprise, plus other enterprise customers like Dell and Avaya use Force.com (Platform as a service).
  • Salesforce.com sees its cloud computing offering as an Innovation driver, catalyst, and evangelist.
  • It’s faster, easier, lower risk.
  • You’re always on the most recent version of the product.

Q&A:

After the presentations, the CXOs hammered the cloud providers with questions as to why they won’t move all their IT operations over to the cloud.

Question from Rick Mickool of Northeastern University:

His concern is how to manage the model of a university. At a university he needs to bring 5,000 people in two days on the network, and then when students leave, he needs to get rid of all of them in one day. Plus, they come in with loads of different devices. Mickool’s team has to be creative about supporting all these consumer devices. His top two trepidations that keep him from moving Northeastern completely to the cloud is that the things he needs for his institution aren’t there yet, plus he gets worried about making decisions today that would lock him in for the long term. He doesn’t know if these guys want to stay in the “electricity” business if it simply is a commodity.

Answer from Salesforce.com, Amazon, and Google:

Admits that there aren’t applications for everything you want to run yet. The only way we’re going to lock you in is if we hold your data hostage, and we don’t. The economic model forces them to behave. Although, like most businesses, cloud computing providers are going to look for ways to keep you on as a customer. You can view that as “lock in,” but that’s one perception. Ultimately they say nothing’s painless, but it’s easier than the world you’re in today. Think about how much technology you’re “locked into” now.

Carolyn Lawson of the California Public Utilities Commission:

Argues that a government entity can never fully move all IT operations to the cloud because they have far too much sensitive information. We have your SS#, your driver’s license number, how much money you make, where your children go to school.

Answer from Salesforce.com, Amazon, and Google:

There is never a solution that’s 100% safe. But why not just encrypt all your data? We couldn’t look at it even if we were motivated to look at it. Trust is something cloud computing providers fight for every day.

Richard Mark Soley of Object Management Group:

How easily can I pick up from one of you and move to the other? I know I can move my data, but I’m more concerned about the applications. When it comes to total cost of ownership (TCO), what should I be doing in house, and what should I be doing in the cloud? Can you really create “all the electricity?”

Answer from Salesforce.com, Amazon, and Google:

While you can shut off a cloud provider in three minutes, it can take weeks to months to reengineer with another provider. It’s not truly like electricity because you can’t swap from one provider to the next without having to do some redevelopment. They admit that they’re not like electricity today, but they’re all hoping to move into that direction where you can turn one off and then turn on another.

A final note

I thought the bold topic of “moving all your IT services” to the cloud allowed for a really good discussion. Kudos to David Berlind for choosing and moderating the discussion. Although, he did the wise thing and stayed out of most of the discussion. Everyone’s hanging on the analogy of trying to compare cloud computing to paying for electricity, yet we all admit it’s not that simple a model, it’s every changing.

Make sure you check out the summary of all coverage from the Enterprise 2.0 Conference 2008 in Boston.

This post is cross-posted from the Enterprise 2.0 Blog.

Leave a Comment

Previous post:

Next post: