Cloud computing in the enterprise: What's the holdup?

Security, compliance and auditing, contracts and service level agreements appear to be keeping 70 percent of companies with more than 1,000 employees from starting a cloud computing initiative, according to Gartner.

Security, compliance and auditing, contracts and service level agreements appear to be keeping 70 percent of companies with more than 1,000 employees from starting a cloud computing initiative, according to Gartner.

That tidbit was one of the big takeaways from a presentation on the cloud computing outlook. Here are the biggest concerns about cloud computing via a presentation at Gartner's Symposium in Orlando:

  • Security;
  • Lack of compliance and auditing;
  • Quality of service;
  • verifying cost savings;
  • Failure remediation.

In a nutshell, companies want custom contracts, something that doesn't really apply when operating a public cloud service. Honestly, I was a bit surprised to see the security thing as a big worry. Cloud providers can probably do security better than your company can.

Nevertheless, Gartner's findings illustrate why there are so many vendors talking about private clouds---also known as data center upgrades.

Other key tidbits worth noting:

  • The global market for cloud services was $58.6 billion in 2009 and will hit $148.8 billion in 2014.
  • Over the next five years, companies will spend $112 billion cumulatively on software, platform and infrastructure as a service.
  • North America will be the largest market for cloud services for the foreseeable future.
  • Through 2012, companies will spend more on private cloud than public cloud services.
  • Few existing technology vendors will transition from a licensing to a cloud model.
  • Accounting is a big hang-up for cloud computing. Say you're an EBITDA company that focuses on earnings minus all the bad stuff like depreciation, interest and taxes. Well cloud computing is a real problem? If you can't capitalize your equipment---and you can't if you go cloud computing---there's a financial hit. Rest assured no big EBITDA happy media company is going to go too bonkers for the cloud.

Managing cloud computing providers is going to get complicated. So complicated that you'll need a brokerage. Gartner is pitching the concept of cloud computing brokerages. Here's how this brokerage concept would work:

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