Directions

Cloudy Future for Business IT

Cloud-based computing gets legs, and so does business in the cloud.

• By Paul DeGroot
• April 01, 2008

As "Internet" did, "cloud" has been gathering steam for years. In network diagrams, the backbone of a TCP/IP network (like the Internet) has generally been depicted as a cloud, partly because of the indeterminate way that TCP/IP networks route data. (Besides, most of us techies can more easily draw a cloud on a whiteboard than a circle or a straight line.)

The cloud is not a bad depiction of cyberspace: vague, intangible. It's where your Hotmail or Google mail is stored, where your Web server lives, the space through which your BlackBerry's messages pass. But most people have no idea how their data gets to the cloud or where the bits are physically stored.

Most important is that the cloud is, increasingly, the new data center-and, ironically, an escape route for those trapped in the increasingly inflexible world of PC-based computing. It's ironic because the PC first found its niche in business as an escape from the old data center. In the 1970s, if people didn't like their canned reports, often printed out on reams of green bar paper, it might take months for someone to change the mainframe software to give them what they wanted.

Then people noticed that an Apple II or IBM PC had pretty good software that was fine for lightweight, user-friendly activities. They sneaked the machines in through their companies' back doors. Some businesses initially banned the vermin, but eventually most companies put one on every desk and relegated their mainframes to specialized roles, if they kept them at all.

History is being repeated. PCs have become balky and insecure. Businesses want to lock them down, make them like the mainframe terminals of yore. Probably within a few years, the standard business desktop will be delivered, factory-fresh, from a sterile, centralized IT environment every time users boot their computers.

And if that doesn't work? You request a change and then wait, just like back in the good ol' mainframe days.

Or you can use the cloud. You can store and share documents online and communicate with colleagues over cloud-based instant messaging, VoIP or e-mail. Unbeknownst to central IT, entire departments might move their work to free or cheap services in the cloud.

I know of one major software vendor (that shall remain anonymous) that has placed strict controls on its business units rolling out their own IT solutions or hiring outside developers to create custom solutions. Departments must go through channels; work must be done by one of a few approved companies. However, this company is taking a significant risk that its business units won't bother with this replay of the bad ol' days. They'll step outside central IT and work in the cloud.

This poses a serious challenge to Microsoft and its partners. Microsoft's great fear that Netscape's browser would become the universal client and de facto desktop is coming to pass, abetted, ironically, by Microsoft's decision to defeat Netscape by making its own Explorer browser a core feature of every new PC.

The company has struggled to produce its own successful cloud-based services and applications. Its major options so far are acquisitions (primarily Yahoo!) or simple hosting services (Microsoft Online), which threaten its hosting partners.

For partners, the picture is mixed. Most partners are flexible because they make their money from services. Having customers move to the cloud does pose the risk that important types of work will disappear, such as software deployment and maintenance. But many new opportunities are likely to appear, such as configuring local devices to work with cloud services and configuring those services themselves to fit customer requirements.

The cloud may seem too simple today to offer much in the way of business-level services, but just wait. Once upon a time, we said that about the PC.