Five Cloud Misconceptions That Are Slowing Adoption

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Judging from the hype—and from the very real benefits—you’d think that cloud computing would be a mainstream enterprise technology by now. It’s not. It’s getting there, but adoptions rates are uneven from industry to industry and from country to country.

There are still plenty of businesses out there that don’t trust the cloud, don’t think it will live up to the hype and don’t think they need to take steps to prepare for cloud adoption anytime soon. One reason for this is a common misunderstanding. To many people the term “cloud” means one thing: a public cloud.

Even if your company was an early cloud adopter, exactly what the term “cloud” means is likely changing as your cloud efforts evolve. Yesterday, “cloud” could have meant the ability to acquire excess capacity quickly from a service provider. Or perhaps it meant creating additional flexibility on top of a virtualized infrastructure. Today, many of those who are bullish on cloud computing think of it as synonymous with IaaS or a service-based infrastructure with chargeback capabilities.

This is one of the problems with the cloud’s hype cycle—no one agrees on specific terminology, and “cloud” is thrown around so loosely that you can’t blame the cloud-wary for being confused.

Here are five common misperceptions that are slowing adoption, and five reasons you should get over them:

1. The Cloud Is One Thing.
2. You Can Control the Adoption Cycle.
3. The Cloud Is Free.
4. Chargebacks Should Be An Early Goal.
5. Embracing Cloud Services Means Losing Control.
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1. The Cloud Is One Thing.

When cloud resisters use the term “cloud,” it’s usually synonymous with whatever their biggest cloud fear is. Chances are, they’re thinking of a public cloud that is poorly secured and which careless employees are using to store sensitive corporate IP.

That’s one definition of the cloud, but these days more organizations will encounter the cloud as a service (Salesforce.com, Workday, NetSuite) than as an internal infrastructure project.

At trade shows, I’ve had the experience more than once of discussing the cloud with someone who lists reasons why his or her organization is steering clear of the cloud, and then in the next breath the person will sing the praises of Marketo or Salesforce.com.

The major software vendors are all shifting from shrink-wrapped software to cloud-based services. They may not label their services as “cloud” services, but that’s what they are. And as the cloud matures, finding exactly what you need from SaaS to IaaS to PaaS to storage and even security as a service is getting easier and easier.

Moreover, as mobility in the workforce increases and as more businesses adopt BYOD (Bring Your Own Device) initiatives, it is the cloud that is responsible for much of the smarts of smartphones.

Overcoming a fear-based definition of the cloud and instead shifting to a how-can-we-take advantage mindset allows organizations to pick and choose the cloud services (and infrastructures) that align with business goals. For some, that may be cloud-based disaster recovery. For others, it could mean transforming the entire data center—or avoiding the need to build a data center in the first place.

2. You Can Control the Adoption Cycle.

We’ve seen this before. A new technology comes along and captures the imagination of consumers. Wi-Fi and smartphones are two good, recent examples. Then, slowly but surely, these technologies creep into the business world informally and outside of IT’s control.

It’s kind of like kudzu growing alongside southern highways. You don’t notice it at first, and then, bam, it’s everywhere, and there’s not much you can do about it.

Judith Hurwitz, CEO of consulting firm Hurwitz & Associates, recalled working with a major financial organization as it transitioned to the cloud.

“As a huge company with significant computing requirements, having the ability to experiment with new ideas and new innovations was a challenge for them,” Hurwitz said. The status quo was that when business units wanted to start a new project requiring computing resources, they would come up with a proposal, request funds to purchase servers, software, etc., and then wait and wait and wait.

Using traditional infrastructures, these experiments could cost thousands, if not millions, of dollars to implement, so each potential project would be scrutinized closely.

“The pressure to select the right projects to pursue was huge, so the finance team in each business unit would be hesitant to approve this type of investment quickly. They needed to do all their due diligence, which takes time. In the meantime, the innovators in the business units found they were losing opportunities,” she said.

Of course, anytime innovators are told “no,” they figure out a way around the problem.

In this case, that meant turning to cloud providers like Amazon. “If the project was successful, they would beg forgiveness,” Hurwitz said. “If it was total failure, the cost was insignificant, and no one would know. The charges were filed under ‘miscellaneous’ in a report.”

What this meant, though, is that this organization was indeed a cloud adopter, despite what their official policy said, and there was no going back. “Once the genie is out of the bottle, you can’t put it back in,” she said. “There are security issues and compliance issues, but what happens is this is all tossed back into IT’s lap. This is the same thing that happened with the adoption of client servers. These projects start out as departmental, get bigger. And then they’re unmanageable, and IT has to step in.”

3. The Cloud Is Free.

Of course, if you can report a cloud service as a “miscellaneous” expense in your budget, cost isn’t a major stumbling block.

However, in an enterprise environment, even free services aren’t free, since you have to worry about security and compliance. The free mindset has trickled into the data center, where the perception is that virtualizing infrastructures and shifting to private cloud architectures will pay for themselves almost instantly.

They may over time, but it’s not that simple. And vendors aren’t helping matters.

“Look at how vendors try to sell cloud infrastructures to IT. When businesses turn to their trusted vendors—HP, Cisco, VMware, IBM—they discover that all of them want to sell massive cloud projects,” said Jay Litkey, CEO of Embotics, a provider of private cloud management tools.

If a trusted vendor tells you that you pretty much need to start over from scratch and tackle a forklift upgrade of your infrastructure, you’ll find reasons to put it off. The vendor will tell you that this will pay for itself, but you’re smart enough to know that this will take long enough that you may no longer even be with the company once it does.

Then, even if you avoid a massive cloud undertaking and roll out cloud services on the cheap, it’s your employees who will think of the cloud as free. It’s the tragedy of the commons happening in your data center.

“People will run up resources for some hair-brained idea, but if it doesn’t pan out, they never give the resources back,” Litkey said. He noted that a client of Embotic’s, an international telecommunications firm, used Embotic’s management software to find 50 idle virtual machines. These VMs were still consuming resources, but they hadn’t been used in more than a year.

It’s easy enough to set up policies to expire idle VMs, but if you think of the cloud as free, you will most likely neglect creating such policies.

4. Chargebacks Should Be An Early Goal.

Once you stop thinking of the cloud as free, the next step often appears to be chargebacks. It makes sense, but striving for chargebacks too early in the adoption cycle can be counterproductive.

Instead, at first smart organizations opt for “show backs.”

Starting with “show backs” is really just some psychological jujitsu that paves the way for chargebacks, but it’s an important step that shouldn’t be skipped.

“Business units and individual employees get to see exactly what they’re costing the business,” Litkey said. “What happens, of course, is that those consuming the most resources are forced to be self-reflective because they can see where this is heading. But they can’t really complain because you’re just showing them, not charging them.”

According to Litkey, the biggest resource hogs usually try to curtail usage so they don’t stand out, and the result is that a little behavioral sleight of hand forces people to think about best practices and consume resources wisely.

5. Embracing Cloud Services Means Losing Control.

There’s actually some truth in this misperception. Of course, if your application is a virtual machine is in Amazon’s data center, you can’t exercise the same kind of control as over an application in a server within your own data center.

But who cares?

As cloud innovations push computing resources towards utility-type consumption, what you control shifts from plumbing to strategic assets. After all, how many businesses run their own power plants?

Case in point: when DISH Networks sought to modernize its mobile workforce, one of their fears about embracing the cloud was that it would involve ceding control over the application. But ceding control meant that they could focus on controlling things that actually benefited the bottom line, such as worker productivity.

Instead of developing their own application or extensively customizing something already on the market – which they would then need to maintain and manage – DISH turned to TOA Technologies. “The benefits for us was, first, that when you turn [the application] over to someone else who has better scale to provide it to you, then don’t really have to worry about the particulars of how it’s being hosted, just the outcomes,” said Mike McClaskey, CIO of DISH Networks.

“Secondly, speed of implementation is a real benefit for us,” he added. By embracing cloud services, businesses find that they can roll out new applications and services in hour or days, rather than weeks or months.

Of course, we’ve heard this story before (the ASPs and MSPs of the late 90s and early 2000s), but it didn’t always pan out.

What’s different this time around is scale. The early service providers could certainly scale better than individual businesses, but they were constrained by traditional, hard-to-scale infrastructures. As more and more computing resources become commodities, cloud scale is a vastly different thing. Today’s service providers can focus on adding value rather than just keeping the plumbing functioning, and, in turn, their customers can experiment with all sorts of use cases—and focus on outcomes.

So, yes, you may give up some control when you move to the cloud, but you’ll gain the ability to innovate quickly. In today’s cutthroat economy, speed of execution is what often separates the winners from the losers.

Jeff Vance is a Santa Monica-based writer. He’s the founder of Startup50, a site devoted to emerging tech startups, and he also founded the content marketing firm, Sandstorm Media. Connect with him on Twitter @JWVance.