Yesterday I wrote a short blog about private cloud and IaaS which is where many vendors and IT executives are trying to divert their companies in terms of cloud initiatives. This maintains IT staff jobs and vendors are able to sell hardware and middleware to the clients.
My view of cloud is complete and total outsourcing of hardware and the middleware or technical software required to support applications development such as operating systems, database management systems, messaging systems, etc.
To me the ideal cloud vendor provides a complete environment where the client need only install (or have someone) install their business applications and use them. This means that the client need only provide a simple Internet connection for their employees to the cloud provider.
The cloud provider needs to provide and maintain all computing equipment, networking facilities, and software required to run and operate the facility. They should also provide real time replication to at least one other site that meets disaster recovery requirements such as being geographically separated from points of risk (i.e. the same earthquake, tornado, hurricane, etc.).
The cloud provider should provide security services running sophisticated security monitoring services with a staff of experts to insure that the clients are fully protected. Ideally they would provide ethical hackers to check the integrity of the client's applications and identify all security risks and assist in mitigation.
The cloud provider should be highly scalable to accommodate seasonal peak period processing on a excess capacity fee schedule that reverts to normal pricing after the peak period subsides.
The net benefit to large organizations is savings of millions of dollars in hardware, software, and the human resource cost of those people who do nothing but support your hardware, infrastructure, or software that runs your computers (operating systems and middleware).
It is not unusual to see a large company with over 100 people doing nothing but supporting computer hardware and providing no direct benefit to the organization.
Most organizations have disaster recovery facilities including equipment that is never used that sits and waits for a disaster. Disaster Recovery is often treated like an insurance policy costing the organization millions of dollars per year. This can be eliminated with cloud.
The ability to scale to meet peak seasonal processing can result in a huge savings since most company buy computers that have the capacity to handle peak periods and remain idle most of the year. Imagine a company that has peak processing from mid-November to the end of December. They could be wasting millions of dollars buying hardware that supports a 45 day period. Note that while some vendors have a "capacity on demand" program, many do not allow you to turn off the capacity when you activate it and others charge huge fees to activate.
The downside is you will be laying off a large number of employees as you embrace cloud which will cause issues within your IT and Human Resources organizations, but often early retirement or transfer to other areas of the company can mitigate the blow.
Note one final benefit is improved risk mitigation. You will very likely receive a higher quality of technical support from the cloud provider due to their need to support many clients and their ability to hire the very best employees that you may not be able to hire.
Choosing your cloud provider is the real key. You must have a well funded, reliable company that will survive and grow vs others that may run the risk of going out of business, or being acquired.