Enterprise Cloud Computing: Risk and Economics

Cloud computing is a hot topic these days. The benefits are clear, the offerings are maturing, and the cost savings are particularly attractive in the current economic climate.

What's more, a pay-per-use model can make you reassess all of your hardware and software costs: why buy a full application suite when you can pay only for what you use?

The point is that cloud computing can help optimize a company's capital investments by reducing its costs for hardware, software and real estate, resulting in a much lower total cost of ownership and, ultimately, a whole new way of looking at the economics of operational IT.

While enterprises are generally slow to make changes of any kind, cloud offerings may well prove to be the exception to the rule. Requiring minimal time and effort to provision additional resources for existing applications (or new resources for new applications), the cloud computing model can offer both simplicity and agility.

Similarly, while IT talent can often be extremely expensive, cloud models enable an enterprise to tap a talent pool as needed for a fraction of the cost of retaining staff in-house. That may be a scary proposition for IT pros, but those who are flexible will be able to shift their focus to solving business problems.

The cloud model can also then give small organizations access to IT services and talent that would otherwise be out of their reach, placing large enterprises and small organizations on a level playing field.

And regardless of the size of the company, cloud computing can provide computing architectures and innovation potential that simply haven't been seen before.

Still, risk doesn't disappear in the cloud, and it doesn't shift to the cloud provider.

Executives need to understand the risks related to service reliability, availability, and security; how much control the user can assert over the IT services provider; and what control must be given to the provider, as well as what trust assurances are in place.

Many legal departments are handling cloud issues for the first time, and SLAs need to be updated to reflect new offerings. When looking at a cloud contract, it's crucial to involve all teams in order to consider everything from security risks to potential litigation exposures.

While cloud computing promises everything from cost savings to agility, innovation and simplicity, the devil is in the details. Enterprise architects and security professionals need to focus on the trust and risk aspects of the cloud in order to protect the enterprise as carefully as possible in this brave new world.

This article was originally published on Internet.com's Enterprise IT Planet Web site.