Cloud Computing – storms on the horizon?

It’s interesting to see that McKinsey have published a report warning of the costs of Cloud Computing. Their arguments seem take issue with the projected savings of Cloud Computing.

My experience of deploying Cloud Computing for a large corporate began in 2000 and here are my findings:

• Coping with seasonality (the dreaded Christmas peak) and even daily usage variations mean that infrastructure is often over-provisioned and therefore frequently left idle. A well-constructed cloud service can decrease these costs significantly
• Virtualisation can be used to achieve something like the same effect. Development machines are great candidates for this technology, as they are often under used and require frequent changes. However, trying to get a good mix of applications when running production applications is hard. Applications running in different virtual machines on the same physical machine often compete for resources when the machines are run at economical levels
• Scaling and stress testing usually needs a full-size copy of the production service to achieve meaningful results. Most companies cannot afford to have a duplicate production environment sat around for testing time, so they try to fit in stress testing when the system is not busy (and when is that in this 24*7 world?) or more than likely, they never do stress testing. Cloud Computing can allow you to call up a duplicate production system when needed.
• The software used to automate the provisioning of Cloud Computing systems increases the availability and the quality of service. Of course, this is not unique to Cloud Computing, and more corporates and outsourcers are installing datacentre automation software like Opsware (now a HP company), but the scale involved in Cloud Computing means that the automation software is a must-have just for the provider to operate.
• All the other issues normally associated with corporate IT still apply: is my data secure?, Is my supplier going to go out of business?, am I locked into this relationship or do I have choices?, can I get visiblity into the systems enough to know that my business processes are still running? In many ways, these issues are the same as you would face with a traditional outsource supplier.

I am sure that this argument will rage, but the truth is that you have to plug your own numbers in to see if Cloud Computing makes sense for you.