Barriers of cloud computing – why for some use cases the public cloud is not beneficial (yet).

The worldwide cloud IT infrastructure is changing: More and more businesses decide to shift their private IT infrastructure towards the public cloud (IDC, 2016). Promoted by the market leaders AWS, Microsoft Azure, Google and IBM, the public cloud seems to significantly gain in importance. Advantages like agility, pay-as-use pricing and availability levels of almost hundred percent show that the new technology can provide a corporation with an additional level of flexibility (Clarion Technologies, 2018).

This trend can be validated by analyzing the forecasted market shares of IT infrastructure until 2021. According to the Worldwide Quarterly Cloud IT Infrastructure Tracker, the market share of traditional Data Centres will shrink from approximately 60% in 2017 to 45% in 2021 (IDC, 2016). Whereas the market share of the private cloud will increase from 10% to 20%, the public cloud environment shows the strongest increase from 20% to 35% market share (IDC, 2016). Given this rapid development of public cloud environments in combination with the promoted benefits, it is drawn the image of a disappearing decentralized IT-Infrastructure. This article points out why decentralized structures still play a large role for some businesses and give an outlook to which degree further decentralization take place in those fields. The underlying reasons for still hosting an in-house IT-infrastructure are separated into business, technology, and legal reasons.

License: Creative Commons.

Why using an external cloud environment can be problematic from the business perspective.

The flexibility of usage is one of the major advantages for business moving their IT infrastructure to the cloud (Salesforce, 2015). The concept of pay-as-use, either actual usage or measured in terms of usage peaks, is a common characteristic of most cloud pricing mechanisms. As Simon Mitchel points out, however, there is also a range of cost-related challenges (Business 2 Community, 2014). He emphasizes the investment perspective of a cloud solution. If you have already got a sufficient internal IT structure, that is related to high capital expenditures (CAPEX), shifting towards a usage-based cloud would only lead to higher operating expenditures (OPEX) and the business could not leverage the depreciated infrastructure. Thus, in this case, a move to the cloud is not beneficial in the short-term. A compromise might be a solution in which you transform your traditional DC into a hybrid environment (Business 2 Community, 2014). Investment-wise an instantaneous move to the public cloud does not make sense in that case and a business should not be trapped by the current hype with regard to public cloud solutions.

Technology-wise a corporation needs to change.

Technology-wise public cloud solutions offer a range of advantages such as high scalability, the outsourcing of all maintenance capacities and extremely high levels of availability due to large scale. In this context, Kong Yang emphasizes that the integration of existing legacy systems can be a major challenge, which is, however, solvable (DataCenter Knowledge, 2016). Related to that, Forbes (2017) emphasizes that also the dependable IT infrastructure needs to be suited for the cloud. To summarize, from a technological perspective there are no unsolvable problems. However, a proper architecture is needed and existing IT structures can hinder companies from entering public cloud environments.

Legal requirements might hinder a company from shifting towards an external/public cloud environment.

Whereas, the technology-related aspects and business aspects do not seem to resemble stable future hindrance factors for the application of public cloud solutions, privacy, and legal factors are more problematic. Security concerns are emphasized as a major concern of public cloud solutions across almost all sources of literature.  Major aspects of discussion include classified information, perceived security, and actual security.

Data classifications play the most import role in this context. For certain types of security-related information (e.g. military information) a physical separation of data is required or expected (Nextgov, 2015). Moreover, country-specific laws may lead to compliance issues. This might be true for the Patriot’s Act which could result in certain information obligations for cloud companies (ZDNet, 2011). Furthermore, in a flexible system as the cloud, the physical location within one country cannot always be guaranteed. All those characteristics make it problematic to store classified information with a public cloud. Since those issues can, for now,  not be solved in a scalable public cloud environment, we can conclude that for certain types of information the public might not be suitable from today’s perspective.

The actual security of cloud solutions, e.g. in terms of firewalls and other security measure is empirically higher than in in-house IT infrastructures (DataCenter Knowledge, 2016). However, as pointed out by Yang, the perception is often the other way around. So another challenge is to communicate the safety of cloud solution towards a potential client (DataCenter Knowledge, 2016).

To sum it up, the technology- and business-related challenges of public cloud solution seem to be solvable and, from this perspective, we can expect a further future increase in public cloud solutions once the barriers are solved.

Does this mean that decentral IT structures will completely disappear? Just having the physical separation of classified data in mind, shows that this is rather unlikely. There are certain kinds of information which need to be physically stored without any access to other parties. A technical solution for this kind of data would also require a legal solution.

Sources:

Business 2 Community (2014). Moving to a Cloud: Top 5 Barriers to Cloud Adoption – And How to Break Them Down. Accessed from: https://www.business2community.com/cloud-computing/moving-cloud-top-5-barriers-cloud-adoption-break-0987489; 6th July 2018.

Clarion Technologies (2018). 10 business benefits of moving to public cloud. Accessed from: https://www.clariontech.com/blog/10-business-benefits-of-moving-to-public-cloud; 7th July 2018.

DataCenter Knowledge (2016). The Top Three Barriers to Cloud Adoption and What to Do about Them. Accessed from: http://www.datacenterknowledge.com/archives/2016/05/26/the-top-three-barriers-to-cloud-adoption-and-what-to-do-about-them; 5th July 2018.

Forbes (2017). 13 Biggest Challenges When Moving Your Business To The Cloud. Accessed from: https://www.forbes.com/sites/forbestechcouncil/2017/06/05/13-biggest-challenges-when-moving-your-business-to-the-cloud/#7ef07cd19b0e; 7th July 2018.

IDC (2016). Worldwide IT Infrastructure Market Forecast by Deployment Type 2015-2021. Accessed from: https://www.convergedigest.com/2017/04/idc-accelerating-it-infrastructure.html; 6th July 2018.

Nextgov (2015). DOD Wants Physical Separation for Classified Data in the Cloud … For Now. Accessed from: https://www.nextgov.com/emerging-tech/emerging-tech-blog/2015/02/dod-wants-physical-separation-classified-data-cloud-now/105753/; 7th July 2018.

Salesforce (2015). Why Move To The Cloud? 10 Benefits Of Cloud Computing. Accessed from: https://www.salesforce.com/uk/blog/2015/11/why-move-to-the-cloud-10-benefits-of-cloud-computing.html; 7th July 2018.

ZDNET (2011). Microsoft admits Patriot Act can access EU-based cloud data. Accessed from: https://www.zdnet.com/article/microsoft-admits-patriot-act-can-access-eu-based-cloud-data/; 7th July 2018.