When Risk Outweighs Reward – A Cloud Model

In all my time as a Sales Professional, I have been honest with my customers about the features and benefits of the products and services that I sell.  I try to hide nothing and I put all my cards on the table, it has what has made me successful in sales…but when I take a step back and look at the things around me.  The products and the services that are peddled every day…to the companies and the things that they do in the pursuit of the all mighty dollar…I take a step back and wonder…is the Risk worth the Reward?

"ubuntu_touch-300x128"This is the first part of a series of looks at Risk vs Reward for different Technologies.

One of the first things that every company and business leader needs to do is understand what their Risk Tolerance Level is.  We do it when making financial investments.  We sit down with our Advisers and make a solid short term, mid term and long term plan and then revisit it either annually or semi-annually and this is a good thing…but I am not too sure if the same concept is done when it comes to technology.

Cloud Computing

The Cloud has been with us for more than 15 years (unless you take a step back to the 1950s and look to the world of Mainframes and Terminal Computing) and has seen amazing growth with nearly every IT Specialty now being offered “As-A-Service”.    When we look at the opportunities in Cloud Computing…it is hard to not see the Risk vs Reward slanting very heavily towards the Reward Side.

Rewards:

  • Lower Capital Costs – There is not the overhead and expense and lead time of developing the infrastructure in house.  It is simply a flick the switch, pay with a credit card and the services are up and running. Switching from Capital Cost to Operational Cost does make a lot of sense financially because you pay for what you need…nothing more and nothing less and this is a good thing…or is it???
  • Lower IT Operating Costs – The As-You-Need-IT philosophy applies here to.  If you only need a server for a few hours…you don’t need to spin it up and operate it 24/7…you pay for it as you use it.  The same goes with the expertise needed to maintain the server…you don’t need to have a Systems Administrator available for that application or service…that is all handled in your nice, neat and tidy monthly service model.
  • No Hardware or Software Updates – Your monthly/quarterly/annual payment handles all the upgrades, tweaks and maintenance for the services that you are accessing.  Backups are handled by the provider and life is easy…right?
  • Optimized IT Infrastructure – I have worked with lots of very small IT Departments and the fact that 1, 2 or 5 People are doing the same basic work load that larger departments do with 10, 20, 50 or more IT Staff is not only surprising…it tends to make things very inefficient.

Risks:

  • Environmental Security – When your data was stored locally at your business, the chances of it being noticed by the outside world and the Deep Internet  was probably minimal but now that you have moved it to nearly any other Data Center…it is now centralized and the Risk grows exponentially.  You don’t know who your neighbor will be (your information as a small boutique retail shop could be stored in the same rack or even on the same machine as a Defense Contractor) and for a hacker…they don’t care who…they just want all the information.
  • Data Privacy and Security – This could actually be listed as both a Risk and a Reward.  In my experience, companies that could most benefit from the Cloud, do not have the skill, budget or capacity to put into place proper IT Security and when you give it to a Cloud Provider…their very existence as a business relies on them having that in place…but you are no longer in control of this and your customers will not care who is at fault…just that their data was taken…that is a big chance to take.
  • Data Availability and Disaster Recovery – When you need your Data…can you get to it?  When there is a network outage anywhere from “here” to “there” that the Cloud Provider is keeping your data housed…will you be able to function?  You could have a generator keeping the lights and the machines working…but if you can not access the data…will you be able to ship it or get more orders?
  • Record Retention – How long do you have to maintain the records for compliance reasons?  In my experience Cloud Services tend to come in with very good pricing but as you store more data…you will pay more, and more and more.  The base service is great…but the “feature add ons” can make the experience a deep and never ending money pit.  Records or Data or Information Retention is something that every business needs to look at and add into the mix when you are looking at the real choice of moving forward with Cloud Computing.

The options are plenty when it comes to looking at the Cloud.  There is real use cases for moving things to a Cloud Provider and in many cases the use of a Public Cloud is a great thing…but then again…maybe you need to look to a Private Cloud that enables and empowers you with a little more control.  But that is as personal as your financial investments…and you wouldn’t make those choices on nothing more than a wing and a prayer right?

Cheers,

Krispy

 

Posted on February 25, 2014 in Cloud, Risk Management, Uncategorized

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