More than 23 percent of U.S. companies are beginning to plan and test the use of cloud computing, but what questions should be addressed before sticking your head in the cloud?

Cloud computing is emerging as a mainstream technology thanks to its ability to help companies better manage their business processes and stretch their IT infrastructure dollars. Given current economic conditions, companies of all shapes and sizes stand to benefit by locating their front- and back-end office processes regardless of geography or even the physical characteristics of their IT hardware.

Before deciding where to invest in the cloud, companies should ask themselves a series of questions to see if their short and long-term business goals warrant such a move. The benefits of cloud computing are many, but they don’t come free and may require retraining and changes in business planning.

But first, what is cloud computing, really?

As its name implies, cloud computing is an amorphous concept that takes many forms, depending on the size of the company and its business needs. The root of the phenomenon can be traced to the early days of utility computing, client server computing and application service provider environments, where large amounts of data needed to be processed, routed and stored. More recently, the promise of cloud computing has become apparent through its ability to help companies more freely access and store their business functions according to need. Think of it as a decoupling that allows processes to be located based on the characteristics of the workload, not on the IT infrastructure that supports them.

What Size Cloud is Right for You?

For a small company, for example an early-stage enterprise developing iPhone applications, cloud computing provides the freedom to scale business without having to buy and maintain servers. IT costs grow only as quickly as the business does. For a midsized company that’s already supporting an IT infrastructure, cloud computing can supplement IT investments by expanding business without immediately increasing the size of the data center. And for large organizations, cloud computing can maximize economic and operational efficiencies by housing whole processes – such as billing, payroll, disaster recovery, customer relationship management and enterprise resource planning – outside of the four walls of the IT department.

Across this spectrum, the results of a September 2009 study by Avanade, a business technology services provider, revealed that 500 senior executives and IT decision-makers surveyed in 17 countries reported a 320 percent increase in the testing and planned implementation of cloud computing compared to just nine months earlier. More than 23 percent of U.S. companies are beginning to plan and test the use of cloud computing.

So what questions should be addressed before sticking your head in the cloud?

Are You Ready to Relocate Your Business Process?

Businesses of all sizes should first ask themselves whether they are comfortable moving any or all of the information that they now have secured behind their firewalls. The best option typically is to make a single move by taking a front-office application, a small transaction or a distribution code and use that as a test case before committing to bigger changes.

Companies should also assess the costs associated with moving their business processes to the cloud. The current economic climate can discourage some organizations from planning for the future as tight belts prevail. Indeed, cloud computing requires companies to rethink their current IT model from an architectural, planning and process perspective that will likely require a level of investment and training. For those that embrace cloud computing, chances are they will have a more versatile infrastructure in place that lets them grow rapidly as business conditions improve.

Who Should You Trust to Manage Your Cloud?

Companies adopting cloud computing will also need to identify the service provider that best meets their needs. Depending on their specific objectives, companies considering a move into the cloud should think about the nature of the business processes they would like their service provider to support. Is it a transactional, front-office function? Is it a mission-critical application? Is the process new, or tried and tested? These differences will determine which model is best suited to your business need.

For the small iPhone application developer, for instance, the Google or Amazon model may be preferred, because the developer can write code from scratch and then let the provider place and support the code on the Internet while scaling to customer demand.

Bigger companies that already run their own data centers may need to adhere to a specific IT architecture. In this case, a managed services provider may be the best choice given their ability to host business processes while replicating a hardware configuration that maintains continuity across the customer’s IT infrastructure. For even larger companies, it’s often a matter of selecting the cloud computing service provider best able to support a specific business function or single application.

Whether considering a single application or the hosting of an entire business function, companies will find cloud computing offers a combination of portability, availability and potential cost savings that is distinct from the more rigid, tethered nature of the classical IT infrastructure model. Before selecting a service provider, however, businesses need to carefully examine their processes and underlying IT environment. Understanding the nature of that workload and how it can be transformed is the key to making those first tentative steps into the cloud successful.

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