Cost reduction alone cannot be the only economic justification for cloud adoption. To change the economic model, it is critical to look at what cloud adoption creates in the way of new business models and transactions.
The hybrid cloud concept is an important step toward this new paradigm. In a hybrid cloud environment, some resources are managed and provisioned in-house or in hosted private cloud environments, while others are delivered by public cloud services. This could be Web 2.0 or business-critical applications hosted and supplied by the service provider, for example, which integrate with customer data that is kept internally within the customers' own data center. The idea is to use virtualization, application programming interfaces (APIs) and specialized cloud server platforms to create the hybrid environment and provision and monitor the applications and services running in it. One obvious benefit of this approach is that private cloud service provision can be augmented by public cloud computing and storage resources to handle spikes in demand.
However, cloud-based business models, especially for enterprises and SMB, come with their own sets of challenges. Heavy Reading's primary research clearly shows that performance remains the biggest concern for large enterprises to run specific applications in a virtual environment, followed by stability and manageability. Cloud computing providers have their work cut out to convince many organizations to move away from the traditional client/server architecture to the new virtual computing environment.
From managing internal business processes to interacting with business partners and customers, enterprises increasingly realize that in order to run their businesses economically they need to fundamentally change ways in which they operate their businesses in the connected IP world. We believe the following business imperatives challenge traditional enterprise IT and cause them to evaluate the applicability of various cloud-based infrastructure services and applications:
— Ari Banerjee, Senior Analyst, Heavy Reading