There’s a study out from McKinsey, Clearing the Air on Cloud Computing; many readers will have seen the commentary here & there around the Web. I’d recommend taking the time to page through the 34 well-put-together pages of the original. Its conclusion is deeply wrong.

What’s To Like · There’s a lot to like: the clean uncluttered presentation, the opening quote from Aristophanes (especially if you know how entirely obscene and cynical The Clouds is), the refreshing realism about technology fashion victims, and the attempt to converge on a useful definition of “Cloud”. And caution, obviously, is warranted with anything rocketing up the steep part of the Gartner Hype Curve.

Slide 21 · This, I think, is the core of the McKinsey Argument. It lists the significant hurdles to the adoption of cloud services in the enterprise, in decreasing order of priority. I encourage you once again to look at the PDF for context, but here they are:

  1. Financial: Current cloud computing offerings are not cost- effective compared to large enterprise data centers

  2. Technical: Security and reliability concerns will have to be mitigated and applications re-architected

  3. Operational: Business perceptions of increased IT flexibility and effectiveness will have to be properly managed

  4. Organizational: The IT supply and demand organizations will have to adapt to function in a cloud-centric world

I’ve Seen This Movie Before · This is one of the times when being a greybeard is helpful. You see, I look at those bullet points, and I remember the IT establishment raising precisely those concerns, almost word-for-word, in the face of other New Things. For example:

  • Personal Computers

  • Unix

  • The Internet

  • Relational Databases

The list goes on. In every case, the new technology couldn’t compete with the existing data center’s TCO (“Total Cost of Ownership”). And there were grave concerns about security and reliability concerns. And oh, those “business perceptions of increased IT flexibility and effectiveness”, so hard to combat manage.

I’m not saying that McKinsey’s bullet-points are wrong. In fact, let’s look back and consider one of my historical analogies, the advent of Personal Computers:

  1. It cost a whole lot more to equip desktops with PCs than dumb terminals.

  2. Early PCs were a joke when it came to security and reliability, compared to data-center technology. [Modern PCs aren’t? -Ed. Ssshh -T]

  3. Businesspeople, working for example on budgeting or marketing, who’d had their first exposure to a spreadsheet or word processor, tended to experience a sharp upward lurch in their expectations of what a computer system ought to deliver.

  4. The advent of desktop computers totally blew existing IT supply and demand organization to hell; it was a very painful experience for all concerned.

But... It didn’t matter.

I can remember like yesterday sometime in the Eighties, the CIO of my parent company, a telecom-equipment manufacturer, lecturing executives about how we simply could not realistically think about meeting information-worker demand for PCs, and I’m pretty sure one of her slides (a real slide, on a real projector—you had to allow a week’s lead-time to prepare them) had more or less exactly McKinsey’s points. She lost, because the information workers simply routed around her.

Getting Stuff Done · At the end of the day, that’s all that matters. When a new technology arrives, if it’s basically affordable and it lets you do your job faster and better, well, it just doesn’t matter if it’s a little more expensive or a little less secure or any of those other things. It’s going to happen.

Will the Cloud Take off or Crash & Burn? · It’s not complicated: If people find that they can use it to get things done better and faster, it’ll be irresistible. Otherwise, irrelevant. The initial indications, mostly out of Amazon, are cloud-positive.

What we just don’t know about yet are “private clouds”. My personal bet is that, as another way to Route Around IT, they’ll be a bigger deal than the public-facing variety. But at this point we’re still flying blind.


Comment feed for ongoing:Comments feed

From: pb (Apr 20 2009, at 22:18)

If McKinsey's wrong (and I think it is), is there a competitive edge to be gained by disregarding McKinsey?


From: Bob Aman (Apr 20 2009, at 23:23)

For the little guy, I've yet to see a compelling argument for cloud computing that isn't better served by much cheaper VPS setups. I just don't seem to have any of the problems that cloud computing is supposed to solve. Long term, I wouldn't be surprised to find that changes, but I just can't see myself building anything in the medium-term foreseeable future on top of a cloud setup.


From: JulesLt (Apr 21 2009, at 00:57)

Depressing though, isn't it!

The same people will then turn around and complain about the exact problems - i.e. security - that you tried to warn them about.

Same problems hold true with web apps also. A user-led decision to throw out 30 years of desktop platform development and start again on an inferior foundation. With Chrome, we're back to about, what, 1995 - a crashing process doesn't bring the 'machine' down. (And again, as we all know, desktop OS were 30 years behind in 1995).

Still, at least these dumb decisions help generate us a lot of work.


From: Erik Engbrecht (Apr 21 2009, at 19:42)

Interesting study...and probably the most insightful I've read.

Here's my slightly tongue-in-cheek thoughts:


From: Jeremy Dunck (Apr 22 2009, at 16:22)


I really think people have a hard time thinking of "small business" cloud applications simply because having a lot of power on tap has never been an option.

I can, right now, get access to over 1TB of unstructured data, or 100s of GB of semi-structured data, and in that data, I can imagine all kinds of interesting business uses. It's never been useful *to me* because I've never had tens or hundreds of servers to throw at the problem-- particularly if I only need those servers once per month.

I think people probably couldn't appreciate the PC until there were applications exemplifying the utility-- and those applications for cloud computing have yet to arrive, at least in the public consciousness.


From: Ron Livesey (Apr 24 2009, at 01:24)

Great blog Tim, thanks for contributing. I'd have to say I agree with you with the information I have available.


From: Scott Peterson (May 21 2009, at 13:27)

I think that you are right on the mark. "Cloud" computing is a threat to the current IT industry. If a small business could acquire IT services by just signing up with AWS, for example, and having small machines on employee desktops that access the AWS server; a lot of headaches related to backups and security would go away. Thereby eliminating the need for an in-house IT person or paying for third-party service for your servers sitting on your premises.


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