The hype surrounding cloud computing

Collectively Jim and Steve have been in IT for a bunch of years. The exact number is irrelevant. As we see it, the hyperbole to reality ratio that surrounds cloud computing is higher than anything that we have seen since ATM. 

FAQ: Cloud computing demystified

If you remember, industry pundits told us repeatedly that ATM would not only be our next technology, it would be our next and last technology. One distinction between the hype that surrounded ATM a decade or so ago and the hype that currently surrounds cloud computing is that we at least knew what ATM was. Unfortunately, there is very little agreement about what cloud computing is, only that it is the next (and last??) savior for IT. We are going to use this newsletter to discuss some of the hype that surrounds cloud computing. We will then use the next few newsletters to define what it means in practical terms

A systemic problem that we see in our industry is that some marketers really believe that IT organizations make decisions based on PowerPoint slides, analyst reports and general hysteria. Having both run enterprise networking groups in two Fortune 500 companies, and worked with several others, we can say that in our experience IT organizations make decisions based on facts.

Speaking of analyst reports, part of the hyperbole surrounding cloud computing is the sheer size of the projected cloud computing market. We are aware of at least one analyst firm that is claiming that cloud computing will be a $100 billion market in 2012. That is a lot of money and any market that size deserves to get a lot of attention. Where the hyperbole begins to come in is when vendors use that market projection on its own to attempt to convince IT organizations that they should migrate to a cloud computing model. The argument is a slight variation of the theme "Everybody is doing it, you should too." Another variation on that argument is "The cloud solves all of your problems. Don't worry, be happy."

In addition to wanting to drive a more detailed discussion of the value of cloud computing, another problem we see is the basis for the projection that cloud computing will be a $100 billion market in 2012. When you drill inside of that projection you see that roughly half of the projected market comes from Internet advertising. We don't think that Internet advertising revenues should influence how IT organizations think about cloud computing.

We recently had a discussion with a vice president of a company that offers cloud computing services. We were hoping to discuss with him what IT organizations need in their own environment as well as from their service providers in order to realize the potential benefits of cloud computing. Instead of an intelligent discussion, all that we got was an incredible level of hype. More detail on the interview can be found at Jim's blog.

The next newsletter will continue the discussion of cloud computing and will begin to create a working definition of what cloud computing means today. In the mean time, tell us what you think about cloud computing. Is it entirely overblown or are you using cloud services today and getting value from them?

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