Is cloud computing the best option for all companies? Why or why not?

Answer 1

In spite of its convenience and potential for cost savings, cloud computing is not a realistic option for all companies. For smaller businesses, startup companies, and some new applications, the cloud concept is a promising alternative to in-house computing. The information needs of large companies, however, are often in conflict with the cloud solution for the following three reasons. First, large firms have typically already incurred massive investments in equipment, proprietary software, and human resources. These organizations are not inclined to walk away from their investments and turn over their entire IT operations to a cloud vendor. Second, many large enterprises have mission-critical functions running on legacy systems that are many decades old. These systems continue to exist because they continue to add value. The task of migrating legacy systems to the cloud would require new architectures and considerable reprogramming. Third, a central tenant of cloud computing is the philosophy that IT is a one-size-fits-all commodity asset. Indeed, the economies of scale that cloud vendors achieve depend upon standardization of solutions across all clients. Cloud vendors treat all workloads and all clients as commodities and do not provide the special treatment required by some organizations. Larger companies are more likely to have esoteric information needs and pursue strategic advantage through IT systems. Finally, internal control and security issues are concerns for companies of all sizes that outsource their IT to the cloud. When an organization's critical data reside outside its corporate walls, it is at risk. The client firm has little option but to trust to the ethics, competence, and internal controls of the vendor. The relevant risk issues include an extensive set of topics, such as technology failures in the cloud, distributed denial of service attacks, hacking, vendor exploitation, vendor failure to perform, and the loss of strategic advantage.