The EC has released a policy paper on cloud computing, and the thrust is that the cloud can be a major benefit to Europe, a view reflected in the paper’s “Unleashing the Potential of Cloud Computing in Europe” title. I’d guess you wouldn’t be surprised to know that there are aspects of the document that I find troubling, but the good news is that it nets out to a recommendation for a coordinated industry/regulatory policy on the cloud evolution. That would be a significant benefit, and possibly one that would extend beyond Europe.
The troubling aspects of the document, for me, center on the way that the impact of the cloud is weighed. On one hand the document acknowledges that cost savings are the major driver for the cloud, and at the same time proposes that the cloud would add to Eurozone GDP. This seems to mirror the industry’s tendency to say that the cloud’s savings will explode and with it the quantity of equipment consumed and the salaries generated. Where then do the savings come from? This contradiction is endemic to our view of the cloud so we can hardly blame Europe. Better yet, the contradiction is resolved by the fact that one of the major precepts of the cloud is false. Savings aren’t going to be the major driver.
ROI, roughly, is the relationship between benefit and cost. In a pure savings-driven market, ROI can be high but only at the cost of reducing investment since the benefit case is static. The question is whether “pure savings-driven market” correctly characterizes the cloud market, and I don’t think it does
“The cloud” is a shift in IT architecture that facilitates the adapting of computing tools to an increasingly as-needed model. I remember well the days of batch processing and punched cards; we had IT but it captured business transactions post-facto. When we shifted from batch to interactive, to what’s called online transaction processing, we shifted to capturing business transactions in real time. There, for a while, things stopped.
We all knew what the future focus would have to be; once you’re capturing and supporting business transactions in real time, you can improve only by moving your support beyond business transactions to business activity. We move to supporting work processes, in short. And the same kind of shift is happening in the consumer market, where mobile broadband is moving online services from something you go to your computer desk to consume to something you consume every minute of your life as an integrated element of your daily routine. THAT is what cloud computing is going to do; move IT into a future that we’re already committed to both for workers and for consumers.
For the EU, this shift of the fundamental value of the cloud from savings to enhanced work and lifestyle means that it doesn’t have to suck the cost out of the current model and create a cheaper one to succeed. That means the cloud COULD grow GDP, and that’s good for the EU in goal-realization terms…sort of.
The thing I think is most interesting about the document is the findings of interviews with SMEs, which are quoted on page 16. According to that group the thing they need most from the cloud is “objective and understandable information”, and this correlates well with what I get in surveys. Cloud prospects are inundated with cloud promotion rather than cloud information, and it’s difficult to understand the source of benefits or the totality of costs without actually doing a trial. The smaller the business the greater the risk that the trial will be too costly to undertake or that the resources needed for it would have to be hired or “rented”. We’re still trapped in the hype of the cloud even today, and it’s probably not going to get better any time soon.
In summary, the EU paper doesn’t seem to move the ball much. The data they cite is from traditional and largely US sources. The applications and visions they propose are straight out of the cloud hype, and the regulatory insight they offer is minimal. Yes, the paper is the tip of a process that could advance things, but I have to wonder whether it’s sensible to launch any sort of standards or bureaucratic process in the cloud space. It could never keep up, and so can never be relevant.
We’re going to do a cloud computing and related topics issue in Netwatcher in November, and it will include our latest modeling of the cloud market, with sizing and pace of adoption, and even suggest where we might see the best overall performance by vertical.