Adoption of the Cloud

There is an interesting article over at Infoworld talking about the dangers of cloud computing. It is an intriguing read about how cloud computing infrastructure is not secure enough for the Enterprise - but more secure than existing mid-size enterprises probably have in place.

The premise is that cloud vendors don't put as much investment and resources into security as do large Enterprises - but more than small companies. This might well be true. Ephraim Schwartz, the author of the piece, goes on to talk about the what applications truly belong in the cloud, and which don't. Non-mission critical applications belong within the cloud, and mission-critical applications do not.

I tend to agree. However, there is another classification of applications that will not readily map to the cloud - ones that support business processes that differentiate an organization.

Companies gain competitive advantage in the marketplace through many factors. I would argue that many companies today have only a small number of factors to play with - Service, Quality, Price, and Availability. The way they deliver these four factors is their competitive advantage. This competitive advantage is built into their internal business processes, culture and approach to the market. All of which are supported by technology.

The way a company uses technology to create business advantage, link internal processes, communicate, share information and support their business - is the competitive differentiator most companies have.

Many business critical applications will not move to the Cloud - not because of a concern about security - but because of it's inability to enable differentiation. Based on some of these assumptions I believe that we can map out, to some level of accuracy, the types of applications that different businesses will adopt.








Large Enterprise - Early adopters of Transactional Service, Moderate Adopters of Infrastructure (for non-critical applications), and late adopters of SaaS applications.

Small to Mid Size Enterprises - These folk will also be early adopters of Transactional services, and medium to early adopters of Infrastructure. They will view the cost savings related to using infrastructure services as a competitive advantage. They will also adopt SaaS applications, but at a slower rate - and for specific types of applications that are either commodities, non-critical or require a level of B2B collaboration. For instance Sales Force Automation, Supply Chain Demand Planning and Business Process Hubs.

Small to Mid Size Businesses - Early adopters of Applications (SaaS) due to it's cost benefit, pricing flexibility and low up-front cost structure. They will also take advantage of Cloud Infrastructure capabilities - but only as they are wrapped with business friendly applications. Don't look for this group to directly write web services that take advantage of Amazon S3, they will wait for the application they can install on their Windows XP Server. Low adopters of Transactional services - due to the IT requirements around the data integration.