The cloud is not always the one-size-fits-all solution as it is sometimes portrayed. Here are six of the biggest fallacies around cloud computing:
1. It's always cheaper
There's no magic about cloud: it offers efficiencies of scale and efficiencies of management that most businesses don't have because of their size or because, in the words of the old joke, "I wouldn't start from here". But if you have a consistent load, you can get some of the savings of cloud by standardising and automating your internal systems — that's what Microsoft keeps calling 'private cloud', but we've also heard terms like 'dynamic IT', 'ITIL' and just 'running your servers properly instead of hand-rolling everything'.
How 'spiky' is demand? If you drive every day, buying a car is cheaper than leasing or taking taxis. If you sometimes drive 100 people and you sometimes drive two, it makes sense to hire a coach when you need it rather than to keep one in the garage all the time. But if you need to get those two people from A to B every day, buy a car (by which I mean, a server — in real life, I'd suggest investigating trains rather than adding to the traffic jams, assuming you live somewhere with a transport system).
Where cloud is both cheaper and game changing is when you need access to massive amounts of computing for a short time, or when you're getting started and you don't want to wait for your own hardware. Spin up 50 servers right now and get your business started. Spin up thousands of servers for an hour to crunch through some data and never do it again, because now you know what you were looking for. That's where cloud is indisputably the right choice. Just remember to budget for the time and bandwidth cost of getting your data to where the processing power is.
2. There's no shelfware
On-demand, pay as you go... sometimes. But sometimes you buy seats to a SaaS product and you buy monthly but pay yearly, in advance. Check that the cloud service you're looking at really does stop charging when a couple of people on the team stop using it (instead of expecting you to transfer those accounts to someone else and keep paying for them like, say, a licence).
3. You always know how much it's going to cost
That's kind of true for services with all-in monthly charges like Salesforce (although remember that monthly charges are paid a year at a time, in advance), but if you're using a cloud platform like EC2 or Azure, expect some complex calculations. One brokerage using Azure for risk analysis puts up a big notice in its app reminding users that the computation they are about to run comes out of their department budget.
It's not fair to beat the entire cloud industry with the Ma.gnolia stick — the 'cloud' bookmark service that turned out to be two Macs, one external hard drive and a SQL database that was backed up without ever being closed. But you do have to do some investigation into what that cloud is floating in.
Yes, a reputable cloud service can probably manage security better than you can — and if it's not better at automation and maintenance than the average business, then it's going to go out of business. But all those customers make cloud services a really attractive proposition for hackers, so make sure the cloud service where you're storing your documents has dealt with security issues — like the one that allowed you to log into any Dropbox account with any password in June 2011...
5. It's always on
The most likely single point of failure for cloud services is your internet connection when you're trying to access them. But every major cloud provider including Amazon has had outages. In 2013 alone, Office365, Google, Twitter and Facebook have had noticeable outages.
6. You can get back out without any costs
Well, you can get your data out of Salesforce — but good luck getting the business model that was embedded in all those apps. This is where Azure and OpenStack are so interesting. Any hosting provider lets you scale your VMs onto more powerful systems that you don't have to keep running yourself. But if you write a cloud service that runs on Azure, you can run it in-house on one of the fast-track 'Azure-in-a-box' systems from OEMs like Dell and HP. It's more work, but it's also far more powerful than tying yourself to a cloud platform that might take off in a direction you don't want to go.