A Cloud in time

Like Tweet Pin it Share Share Email

The first article I ever published in InfoWorld began, “Does anyone else find the Gartner Group annoying?”

While no longer a Group, the annoying part is alive and well, as evidenced by its recent prediction, reported in Network World, that, “Cloud computing will become so pervasive that by 2012, one out of five businesses will own no IT assets at all.”

To be fair, Network World’s headline mis-states Gartner’s prediction, as does Gartner’s lead paragraph, both of which emphasize virtualization and The Cloud.

What follows heads in a very different direction. Here’s what Gartner says:

The need for computing hardware, either in a data center or on an employee’s desk, will not go away. However, if the ownership of hardware shifts to third parties, then there will be major shifts throughout every facet of the IT hardware industry.

For example, enterprise IT budgets will either be shrunk or reallocated to more-strategic projects; enterprise IT staff will either be reduced or reskilled to meet new requirements, and/or hardware distribution will have to change radically to meet the requirements of the new IT hardware buying points.

In addition to having nothing at all to do with either virtualization or The Cloud, this is simply wrong. If ownership of the hardware shifts to third parties, nothing important will change, other than the company name on the asset tags and employee ID badges.

Unless that is, you think that leasing your car instead of owning it would change your driving habits and choices of destination.

Opinion: We should simply wave off this prediction as a childish need for attention.

But just for fun, let’s see if we can find a way it could happen in a meaningful way – for a fifth of all companies to own no IT assets by 2012 in a way that’s more interesting than that they lease them instead. Here’s what it would probably take:

Redefinition: “IT asset” can no longer include PCs, smartphones, or any other end-user technology, nor can it include on-premises communications gear such as PBXs, routers, and firewalls.

And “company” will have to exclude sole-proprietorships, whose entire IT infrastructure consists of laptops and smartphones, using lots of locally installed applications.

Creative destruction. Capitalism, like nature, is red in tooth and claw. Every year some companies go out of business while other new companies launch. If, by the start of 2012, enough creative destruction has happened, one in five companies could be less than two years old … young enough to have started life using nothing but Cloud technology and small enough to stay that way.

Point of diminishing returns: 20% of all companies decide they have everything they need in the way of information technology – no project backlog, no enhancement requests in the queue, nothing to keep developers occupied.

If redefinition and creative destruction don’t get us to the magic number, this would have to be the case. Even if “migrating existing applications to the cloud” means nothing more than re-hosting them using an infrastructure-as-a-service provider, it’s still a conversion – more so if it means redeveloping them using a platform-as-a-service provider or replacing them altogether through the magic of software as a service.

And as anyone knows who has participated in a conversion, it’s a non-trivial exercise … enough hard work, I’d bet, to fully absorb the entire available development capability of most organizations of any size.

For Windows or Linux-based applications the conversions might be merely very complicated. But how about companies that use … oh, I don’t know … perhaps IBM’s z/OS (the operating system formerly known as MVS), running COBOL/CICS applications? Just recreating the environment will take serious engineering, and that assumes you can find a reliable Cloud provider that sells z/OS in virtual form. Otherwise it’s conversion city.

Nor are the promised savings a sure thing.

Financially, The Cloud is like outsourcing. It converts CapEx spending (the cool way to say “capital”) into OpEx spending (operating costs, that is).

Somebody still has to buy the equipment, though. Cloud providers, like outsourcers, need discounts big enough to make a profit and still save customers money – likely when the customer is small and has little buying power; less likely for bigger companies that buy in enough volume to negotiate good prices for themselves.

My advice: Don’t bet the server farm.

Still, I’m confident enough to make two predictions of my own. The first: When 2012 arrives, Gartner will find a way to count that makes its prediction come true.

My second prediction is that the industry press will obediently cover the story.

Comments (12)

  • Hi. I am a long time reader. I wanted to say that I like your blog and the layout.

    Peter Quinn

  • Cloud computing may be good for certain things like a business unit throwing up a preliminary web site or database, but would you trust your customer data to the “Cloud” provider. You might not have any say over the virtual image you have to start with. Then there’s data backups and restores. Then there’s security. You will be dependent upon Amazon EC2’s IT Security group for your server’s security. Who’s to blame if their security fails and your server gets compromised? Is it ultimately your fault if you didn’t secure the system completely, or their fault for letting rogues in? On the bright side, competition generally lowers IT prices, and a company’s internal IT department may become a bit more friendly and responsive if they perceived their meal ticket leaving for the “Cloud”, though some things will likely never join the “Cloud” due to privacy, ownerships issues and such. As far as small and medium sized businesses, the Cloud may be the place to be if they don’t want an IT shop of their own.

  • “nor can it include on-premises communications gear such as PBXs, routers, and firewalls”
    Silly Bob! By 2012 we will all be communicating through 5G wireless headsets tapping directly into our neural nets. At least, they will in Gartner-LaLaLand. The rest of us will be using PCs running Windows 8 and trying to figure out how to keep the joint running …
    Seriously though, I think you’re dead right to (continue to) point out that these emperors of the prediction business are wearing very scanty clothing. As my dad used to say: “What comes from gazing into crystal balls is not much crystal, but an awful lot of balls.”

  • Actually, being forced to lease, under current leasing conditions, would change my driving remarkably. Probably my residence, too. I drive approx. 30K miles/year. At the standard 12K/ year allowed for a typical lease, there’s no amount of up-front cost saving that could possibly make up for the back end costs.

  • When recent headlines indicate that Google cannot keep China “off of their cloud”, you’ve got to wonder how secure any company is gong to feel about putting highly secure, strategic data up there.

    Like Mick says, “twos a crowd on my cloud baby.”

  • Oh, and by the way, thanks for pointing out how annoying Gartners predictions can be. One might say “sensational press”. Perhaps borne out of desperation… or perhaps something else. They are riding their own hype cycle… paradoxically one of the few things I admire them for popularizing.

    20% with no IT assets? That cloud is smoke from a crack pipe.

  • Bob – Well stated and right on the mark. Cyclical: Centralized, distributed, networked, “clouded” (centralized but a 21st century label), back to?

    Governmental data in a private-sector cloud? The security audit would be a cottage industry with career potential.

  • I suppose the cloud can work adequately in many places for many tasks but it depends on the absolutely rock-solid infrastructure of communications. So what happens when your phone lines are cut? How long can you survive and support your clients without access to your tools? I’m not willing to bet my business on a backhoe operator or an act of nature.

  • I predict that IT management will have their heads in the clouds while the IT groups will have their feet on the ground doing business as usual.

  • It will still computers to access the Cloud. So there will still be hardware required. That hardware still needs to be maintained and the software still kept up to date and have reliable access. The links both hardware and software will still be required for the connection-cable, wireless, or other connectivity. The next really big thing (NRBT) will be the virtual computer that connects and displays with no real hardware. Now that would be quite a report by the press!

Comments are closed.