The Case Against Cloud Computing January 23, 2009
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The Case Against Cloud Computing, Part One
by Bernard Golden, CIO
I’ve had a series of interesting conversations with people involved in cloud computing who, paradoxically, maintain that cloud computing is-at least today-inappropriate for enterprises.
I say paradoxically because each of them works for or represents a large technology company’s cloud computing efforts, and one would think their role would motivate them to strongly advocate cloud adoption. So why the tepid enthusiasm? For a couple of them, cloud computing functionality is really not ready for prime time use by enterprises. For others, cloud computing is too ambiguous a term for enterprises to really understand what it means. For yet others, cloud computing doesn’t-and may never-offer the necessary functional factors that enterprise IT requires. While I think the observations they’ve made are trenchant, I’m not sure I’m convinced by them as immutable problems that cannot be addressed.
I thought it would be worthwhile to summarize the discussions and identify and discuss each putative shortcoming. I’ve distilled their reservations and present them here. I’ve also added my commentary on each issue, noting a different interpretation of the issue that perhaps sheds a little less dramatic light upon it and identifies ways to mitigate the issue.
There are five key impediments to enterprise adoption of cloud computing, according to my conversations. I will discuss each in a separate posting for reasons of length. The five key impediments are:
Current enterprise apps can’t be migrated conveniently
Risk: Legal, regulatory, and business
Difficulty of managing cloud applications
Lack of SLA
Lack of cost advantage for cloud computing
Current enterprise apps can’t be migrated conveniently. Each of the major cloud providers (Amazon Web Services, salesforce force, Google App Engine, and Microsoft Azure) imposes an architecture dissimilar to the common architectures of enterprise apps.
Amazon Web Services offers the most flexibility in this regard because it provisions an “empty” image that you can put anything into, but nevertheless, applications cannot be easily moved due to its idiosyncratic storage framework, meaning they can’t be easily migrated.
Salesforce.com is a development platform tied to a proprietary architecture deeply integrated with salesforce.com and unlike anything in a regular enterprise application. Google App is a python-based set of application services-fine if your application is written in python and tuned to the Google application services, but enterprise applications, even those written in python, are not already architected for this framework. Azure is a .NET-based architecture that offers services based on the existing Microsoft development framework, but it doesn’t offer regular SQL RDBMS storage, thereby requiring a different application architecture, thus making it difficult to migrate existing enterprise applications to the environment.
According to one person I spoke with, migrating applications out of internal data centers and into the cloud is the key interest driver for clouds among enterprises; once they find out how difficult it is to move an application to an external cloud, their enthusiasm dwindles.
I would say that this is certainly a challenge for enterprises, since if it was easy to move applications into cloud environments, quick uptake would certainly be aided. And the motivation for some of the cloud providers to deliver their cloud offerings in the way they do is difficult to understand. Google’s commitment to Python is a bit odd, since Python is by no means the most popular scripting language around. Google sometimes seems to decide something is technically superior and then to insist on it, despite evidence that it retards adoption. With regard to Salesforce, I can certainly understand someone with a commitment to the company’s main offering deciding to leverage the force architecture to create add-ons, but it’s unlikely that an existing app could be moved to force.com with any reasonable level of effort; certainly questions about proprietary lock-in would be present for any enterprise that might entertain writing a fresh app for the platform. It’s quite surprising that Microsoft would not make it easy for users to deploy the same application locally or in Azure; while the Azure
architecture enables many sophisticated applications, the lack of ability to easily migrate will dissuade many of Microsoft users from exploring the use of Azure.
On the other hand, a different architecture than the now-accepted enterprise application architecture (leaving aside that current enterprise architectures are by no means fastened upon one alternative, so it’s not as though the choice were between one universally adopted enterprise architecture and a set of dissimilar ones) doesn’t necessarily mean that it is deficient or even too difficult to migrate an application to. It might be more appropriate to say that there is a degree of friction in migrating an existing application; that degree varies according to which target cloud offering one desires to migrate to.
Certainly it seems well within technical capability for someone to develop a P2C (physical to cloud) migration tool that could all or much of the technical effort necessary for migration; of course, this tool would need to be able to translate to several different cloud architectures.
Even if an automated tool does not become available, there is the potential for service providers to spring up to perform migration services efficiently and inexpensively.
Naturally, performing this migration would not be free; either software must be purchased or services paid for. The point is that this is not an insurmountable problem. It is a well-bounded one.
The more likely challenge regarding clouds imposing a different architecture is that of employee skills. Getting technical personnel up to speed on the requirements of cloud computing with respect to architecture, implementation, and operation is difficult: it is a fact that human capital is the most difficult kind to upgrade. However, cloud computing represents a new computing platform, and IT organizations have lived through platform transitions a number of times in the past. In these times of Windows developers being a dime a dozen, it’s easy to forget that at one time, Windows NT skills were as difficult to locate as a needle in a haystack.
On balance, the lack of a convenient migration path for existing applications is going to hinder cloud computing adoption, but doesn’t represent a permanent barrier.
Next posting: The challenge of risk: legal, regulatory, and business
Bernard Golden is CEO of consulting firm HyperStratus, which specializes in virtualization, cloud computing and related issues. He is also the author of “Virtualization for Dummies,” the best-selling book on virtualization to date.
SAP CEO: SaaS Won’t Work As A Core Platform says CEO – NEVER January 15, 2009
Posted by Unified ECM in Document Management Software, Filing Systems, Records Management.Tags: Cloud Computing, SaaS, SAP, Unified ECM
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By Mary Hayes Weier
InformationWeek
January 8, 2009 12:12 PM
Bill McDermott, SAP (NYSE: SAP)’s CEO and president of global field operations, has a prediction on when software-as-a-service will become a popular platform on which large business will run their core business operations.”Never,” McDermott said, in an InformationWeek interview on Tuesday.
Companies require a software foundation on which to build business processes, McDermott explained, and by its very nature, SaaS doesn’t offer the bandwidth or the capability to deal with complex operations, he added.
As the world’s largest provider of business applications, it’s important for customers to understand SAP’s stance on SaaS, given the software industry’s considerable amount of attention and funding for the platform within the past few years. But it’s been difficult to follow exactly where SAP is going with SaaS.
In some ways it has enthusiastically supported it — such as its glitzy launch more than a year ago of the now-idled Business ByDesign software product for small-to-midsize businesses — but more recently, co-CEO and board member Leo Apotheker said it’s difficult to make money on SaaS.
In Tuesday’s interview, McDermott indicated that SAP still believes in some forms of SaaS, but not as a core business foundation for its typical customer. It just wouldn’t work, he said.
McDermott notes that it’s taken SAP 36 years to build a “core” on which modern, global companies can run their businesses, which is tailored to specific industries and offers a huge partner ecosystem. “These foundations are very important to companies,” McDermott said. “They like having control of data. They don’t want to leave destiny in someone else’s hands.”
McDermott said SAP’s strong position in the software industry comes from customers’ ability to have applications that run on the same platform, avoiding tough integration issues and improving visibility into operations. A company that tries to do that with SaaS will be left with trying to integrate hosted software from a variety of vendors using middleware from yet another vendor. They’re discovering “maybe software as a service wasn’t so cheap after all,” McDermott said.
Plenty of SaaS vendors would disagree, of course. Workday, which is developing a full SaaS ERP suite, is building its company on the very idea of SaaS as a foundation, and ERP SaaS vendor NetSuite consistently reports double-digit revenue increases. Salesforce (NYSE: CRM).com, meanwhile, is trying to build a large SaaS ecosystem and development platform. Businesses that have chosen a best-of-breed software platform wouldn’t agree with McDermott, either.
Despite McDermott’s critical view of enterprise SaaS, SAP still has high hopes for Business ByDesign. It’s going to appeal to companies that are retiring aging legacy systems and “can’t afford traditional ERP,” McDermott said. (It’s likely SAP also sees it as a stepping-stone to its traditional onsite ERP). Additionally, Business ByDesign may appeal to some global companies as a good ERP platform for use by some satellite divisions.
More than a year after its release, however, only a handful of SAP customers are using the product, with SAP executives citing both profitability problems and functionality issues.
However, more information on Business ByDesign’s broader rollout should come at the Americas SAP Users Group (ASUG) conference in May. “We have every intent of saying more about Business ByDesign at Sapphire,” McDermott said. “We have high aspirations for Business ByDesign. We’d rather have it a little late and right, than early and wrong.”
SAP also is developing a software-plus-services strategy, in which large business could purchase SaaS modules that “snap on” to existing applications. Newly hired executive, John Wookey, who was previously head of Fusion application development at Oracle, is heading that effort.
Information Week on the $50 Billion Health IT Project January 6, 2009
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Great news for Document Management companies reported by Marianne Kolbasuk
If there’s one thing most presidential candidates agree on, it’s that many more doctors must deploy e-health systems to reduce health care costs and improve care in the United States. But one candidate is proposing a whopping $50 billion, five-year investment to make that happen. That would be an enormous shift from what the feds have spent so far on these programs.
If you troll through the campaign Web sites, many of the candidates say they want more health care providers using health IT, but leave out specifics for such programs, especially dollar figures.
Rudy Giuliani’s site says the ex-mayor of New York City wants to “invest in health IT to reduce medical errors, improve efficiency, and detect health threats.” John Edwards’ site says he’ll “provide the resources hospitals need to implement information systems that improve patient safety and hospital efficiency.” No estimates on funding by either candidate.
Hillary Clinton’s site (at least from what I was able to find) doesn’t mention health IT, but is heavy on details about her universal health plan. However (courtesy of Janet Marchibroda, CEO of eHealth Initiative, a nonprofit, multistakeholder organization) the details of Clinton’s plan include an “investment” of $3 billion a year in health IT grants. Funding would come from ending Bush’s income tax cuts and exemptions and “redirecting” those savings.
If you think Clinton’s $3 billion annual investment sounds like a big figure, check out Barack Obama’s site. Relatively speaking, his proposal is eye-popping.
“Obama will invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records, and will phase in requirements for full implementation of health IT,” says the site.
Wow. $50 billion? To date, federal government spending on e-health initiatives has been in the millions of dollars, not billions. Most government money so far has been in the form of grants and demo projects. There also have been a few pilot incentive programs, such as Medicare paying bonuses to some doctors in small or medium-sized practices for using certain e-health applications, like electronic prescriptions.
Marchibroda of eHealth Initiative says that from 2005 to 2007, the federal government (specifically the Agency for Healthcare Research and Quality and the Office Of the National Coordinator for Health IT) spent a total of $374 million on e-health related grants, contracts to support implementation in the field, and other projects, including standards work and research. That’s the total for three years — $374 million.
In 2004, President Bush set out the goal for “most” Americans to have e-health records by 2014. And while deployment of those systems have ramped up, it’s estimated that less than 10% of U.S. doctor practices — and 5% of solo practices — are using e-health records today. For hospitals, the adoption rate is somewhere between 20% and 30%
Some pundits think it will be more like decades before most physicians drop their paper-based habits for digital records.
One of the biggest obstacles in adoption has been the cost to implement and support those systems. Doctors argue that while they’re the ones shelling out the money and dealing with the pain to deploy e-health record systems, they’re not the ones that reap the financial return. It’s mainly insurers and other payers who benefit from streamlined processes and the reduced costs associated with eliminating unnecessary or duplicate tests and keeping patients safer and healthier by avoiding medical mistakes (and expensive hospital stays.)
Obama’s site doesn’t specify (nor did his media team respond to my e-mail questions) about where the spending would actually go. For instance, would the annual $10 billion in funding help doctors purchase those systems? Would there be new financial rewards to physicians using e-health records? New grants? And where would that money come from?
Also, when Obama says he’ll “phase in requirements for full implementation of health IT,” is he suggesting making e-health records a mandate?
There are those who think that a “do it or else” mandate is the only way you’ll force doctors into deploying these systems. Others are adamantly against any such mandate, especially if there’s no money to back up such a program. Sounds like Obama might have plans to do just that.
Hmmm, $50 billion over five years? I’m sure some critics are already grumbling that Obama’s plan is another example of how Democrats love to spend and throw taxpayers’ money at private-sector problems.
But wouldn’t it be ironic if Obama ended up helping President Bush reach his e-health record goal for 2014?
What do you think?
