Is the Cloud Services Market Exceeding Business Expectations?

I’m often asked to discuss what I’m seeing in the cloud services market and whether enterprises believe what they’re getting lives up to their expectations. My response is based upon conversations with executives of end-user organizations and of cloud services suppliers. This article is based upon anecdotal information, not upon surveys I have conducted. That being said, it is clear that there is a disconnect between what the suppliers believe is happening and what business executives believe.

What Do Businesses Expect from a Cloud Service?

changing buyers.jpgIt is important to note that our surveys have shown that over the past decade or two, the actual buyer of IT products and services has been changing. In the past, the buyer was almost always a technologist who made product decisions based upon knowledge of what the business needed, how technology worked, and where and how the two could be made to intersect. Over time, we’ve observed this responsibility shift from a technology-focused to a business-focused decision maker. It is common today for the technologists to be told what approaches to take to solve IT problems rather than making the decision themselves.

Business decision makers often have some beliefs about cloud computing that may or may not be technically feasible. The following summarizes what business decision makers often say when asked about cloud computing services:

• Access to limitless compute power
Business decision makers often believe that signing up for a cloud computing service means they will have access to near-limitless computing power for their company’s projects without having to purchase additional systems, license software, or hire additional staff.

• Access to limitless storage
These decision makers also believe that their projects will have access to a never-ending amount of storage without them being required to purchase and install new storage systems.

• Processing and storage in a highly secure, well-managed environment
In spite of the constant stream of security problems and loss of customer data to malicious players out on the web, decision makers often believe that the cloud service provider’s team will know more about security and do a better job of protecting enterprise data than would their own team.

• All at a reasonable (read, small) cost
These business decision makers often believe the industry hype that cloud computing services are cheap, even though stories about cost overruns are plentiful on the internet.

• All requiring limited monitoring and management
Although these business decision makers have been often warned by their own IT staff, they still presume that the cloud services provider will handle everthing without requiring their own staff to monitor and manage either the data or the resources supporting the computing projects.

Some of these decision makers have delighted in the thought that they can downsize their own staff, their own data center, and reduce their overall costs of computing through the use of cloud computing services.

What Do Businesses Actually Get From Many Cloud Services?

bewildering choices.jpgOur conversations with business executives often have a different tone once these individuals have actual experience working with cloud services suppliers, regardless of whether they are contracting with Amazon® AWS®, Google® Cloud Engine, Microsoft® Azure®, or some other supplier. They often indicate disappointment when they compare their initial expectations to their real experiences with cloud computing services. In our experience, these are the key points business executives raised after using cloud services for a time:

• A bewildering array of services
Once executives start reviewing cloud computing products, they soon learn they are sold and delivered in a very granular way. This means that executives have to select from many levels of processing power, internal memory capacity, storage, network bandwidth, and “zones” or “regions” where the data centers are located. This can often be an overwhelming experience.

• Relatively poor tools for business decision makers to determine actual final costs or best choice of products
Executives discover the tools allowing them to gauge what is happening, what services are being utilized, where the resources are, and other important details are too granular to be useful.

• The dream of painless computing at a low cost is not fully realized
We often hear that the executives find it is fairly easy to sign up for these services, but not always easy to determine what the actual cost is going to be, which results in their first bill being a shock.

One thing that is clear is once the business decision maker is committed, it is unlikely that they will back away from their initial choice. When they do, they often say that the whole idea of cloud computing doesn’t work, rather than admit that they didn’t really understand the choices they were making and the consequences of those decisions.

When asked why they take that stance, we’re often told that it is embarrassing to say that they chose poorly when their IT team had been telling them that cloud services might not be the best choice for a specific application or workload.

Does the Future Hold Something Better?

cloud_future.jpgAs industry experience with different forms of cloud computing grows, we believe that it is far more likely that initial expectations and actual experience will be far closer together.

It is clear that suppliers of cloud services are constantly refining their products and services. Unfortunately, their response to competitive pressures and customer requirements has been to make their offerings more granular—or more complex. They are, however, offering better modeling tools that make it far easier for a business decision maker to select the best mix of products. They are also offering better tools for monitoring and management of cloud resources. On the other hand, their offerings are still largely focused on the needs of technical, not business, decision makers even though the business decision makers are more likely to be responsible for the selection.

I still believe that businesses, especially those in the mid-market, are likely to have problems. Cloud services are still quite complex and require a high level of technical understanding. Business decision makers don’t understand that they are still responsible, even if execution of IT workloads is happening in someone else’s data center.

These challenges have been noted and there are a large number of third-party monitoring and management tools, security platforms, and professional services out there to help companies have greater control and understanding of their cloud environments. Large suppliers of hardware and software offer cloud startup and operational services with the goal of simplifying a complex computing environment and helping the business decision maker to realize their expectations.

Business decision makers would be well-advised to engage the help of their own IT staff and trusted third parties before launching themselves into the cloud without a map or a parachute. This opens up a clear field of opportunity for managed service providers (MSPs), who have long been in the business of helping midmarket organizations make the best use of available technology in a cost-effective and efficient way. MSPs have a great deal of expertise and, typically, a long track record of success helping their clients. By acting as trusted IT advisors, they can guide their clients through the minefield of cloud adoption and ongoing operations in a cloud computing environment.

If the process is managed carefully, businesses can have a sunny day in the cloud. If not, the impact of the storms can be quite serious.

By Dan Kusnetzky

Daniel Kusnetzky is a reformed software engineer and product manager. He founded Kusnetzky Group LLC in 2006. He’s literally written the book on virtualization and often comments on cloud computing, mobility, and systems software. He has been a business unit manager at a hardware company and head of corporate marketing and strategy at a software company. 

You can follow Dan on Twitter® at @Dkusnetzky