The number of vendors in the software-as-a-service (SaaS) segment of the Cloud Computing market is now estimated to be over 2,000. This is one of the statistics in the NetworkWorld Insider Report, “Cloud Computing Changes Everything“, modestly titled and free to download (if you register first). Infrastructure as a service (IaaS) has more than 30 current vendors and platform as a service (PaaS) as a service has more than 40. The differences between these three services are described on our Cloud Computing page, but simplistically, SaaS refers to shared applications like Salesforce.com, PaaS refers to shared web platforms like the Google App engine and IaaS refers to virtual servers created on-demand. All three of these areas are rapidly changing as new vendors enter, innovate and compete.

While there’s still a lot of hype, cloud computing is now regularly delivering real benefits that include increased flexibility, reliability and responsiveness while lowering costs — often substantially. But, the lack of an experience base and missing skills can make cloud computing, like other new technologies, difficult for an organization to effectively use.

Moving to cloud computing often reveals benefits that come by having computing and software resources delivered as services instead of provided by an internal IT department. Organizations switching from traditional products like Office to Google Docs have often been motivated by cost savings but found major additional benefits from increases in productivity that come with the collaboration features and the transparent upgrade process. Organizations with in-house application development groups have often been motivated by easy access to a supported development platform but found that the ease of creating test and staging servers on demand has vastly decreased the time it takes to develop, test and deploy new applications. Organizations that provide a hosted service have often been motivated by capital costs but found that the increased flexibility allows them to easily respond to demand changes.

There are pitfalls. Adopting cloud computing can be disruptive to established departments. IT may need to give up control to other groups. Current applications, especially if they’ve been customized may not run in the cloud. Some things may actually be more expensive in the cloud — like storing large amounts of data. Moving data in and out of the cloud can be costly. The vendors themselves don’t always help. Pilot programs designed to get an organization started are often too short and result in commitments that are difficult to undo.

Despite these pitfalls, we firmly believe that small to medium sized organizations, especially those in the information industry can effectively use the cloud today. We advocate a process that starts with an analysis of the current IT and IT-supported activities in the organization. From that analysis, one or more activities are selected for a cloud-based trial. The results of the trial are then used to determine how to move forward. Our experience is that by taking small, but real steps, the organization quickly gains experience, confidence, learns to deal with the issues and is able to see the benefits of cloud computing in a short period of time.

If you would like to discuss how cloud computing could benefit your organization, please contact us.

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