The Crowd in the Cloud

Cloud computing, arguably the big buzz word of the enterprise and small business.  We’re all rushing to move applications, data and software into data centres to be hosted by companies who will keep our servers secure and up to date.

There’s a huge amount of upside to cloud, particularly given the explosive rise of tablet computing, data storage exponentially rising and mobile network speeds accelerating.   Having someone look after your network, your applications and other items could dramatically reduce your IT overhead, moving it from capex to opex and giving you the capability to flex your requirements.

However, there is an issue in the background, which is worth considering as part of your long term strategy, particularly at enterprise level.  That is, who currently – who owns this cloud now and who might own it in the future?  There is a lot of consolidation talk in the background as players look to grab ground through acquisition.  This may impact on your future costs, think what’s happened in the energy industry, prices are only going one way….up.

Now, competition will always keep a market on it’s feet, until you start to get to major players taking dominant position. When that happens, the market follows them – think Sky TV.  Took years to get the infrastructure sorted but now has a dominant share of the market.  In the Energy market, three of four players rule the roost.  Will cloud go the same way?

Plan for It

All it exposes is that there may be a culmination point in the future.  If costs begin to rise because someone has built a dominant position, your IT costs may start to rise beyond inflation to a point in the future when it’s cheaper to bring it in house again.

I’m a big fan of cloud computing, it’s awesome – you can throw everything in the cloud and have someone else look after your system, upgrades and services.  For an enterprise, there may be longer term considerations about what you put with who to mitigate against someone pushing prices up in the future or giving yourself the option to back out of a contract if your cloud provider gets hoovered up by someone else.

It shouldn’t be a barrier to entry, not by any means but it should form part of your due diligence when choosing a an enterprise provider.