Cloud enablement

5 Reasons SMBs Aren't Using Cloud Services

Cloud services offer small- and medium-sized businesses (SMBs) a lot of potential benefits, including flexibility and cost savings. And the benefits will only increase with the development of more powerful combinations of cloud applications and services. But SMBs have been hesitant to move to the cloud. Often this is the result of concerns about getting stuck with the wrong service or provider. (See Why Cox Is Cautious on Clouds.)

The Institute of Electrical and Electronics Engineers Inc. (IEEE) hopes its Cloud Computing Initiative will lessen these hesitations. The effort includes two standards development projects. The first, dubbed P2301, is essentially a design guide for cloud computing services. The second, P2302, aims to develop a formal interoperability standard for cloud services. (See IEEE Seeks Cloud Standards.)

At this early stage, IEEE can only talk in generalities about what it expects the initiative to accomplish. In addition, the effort doesn't directly focus on the concerns of SMBs looking to increase their use of cloud services. Even so, it will at least indirectly help eliminate many of the reasons SMBs don't use cloud services today. Five such reasons in particular stand out:

Uncertainties about which provider or technical approach to choose
SMBs looking to use cloud services today largely have to accept the provider's assurance that the technology or service it is offering is right for them. There's no independent way to determine whether that's true, because there's no objective source of information about specific technical approaches or applications. The IEEE initiative will use different methods to put different cloud services in perspective, though SMBs will still have to work to make use of the resulting information.

The information will be considerable. The P2301 project, titled "Draft Guide for Cloud Portability and Interoperability Profiles," will create so-called "profiles with options," according to Stephen Diamond, chair of the new initiative. This early in the process, it's hard to know exactly what a profile will entail -- the working group will define each as it proceeds. But in general, a typical profile will likely comprise a set of standards, formats, specifications, APIs, management interfaces, components and other elements that will help service providers or organizations build clouds for specific purposes.

One such purpose, for example, could be a video serving app that delivers streamed entertainment content to different numbers of users at different times, to different types of end points and with differing degrees of interactivity, explains David Bernstein, chair of the working groups for both initiatives and managing director of consulting firm Cloud Strategy Partners. Another example is a cloud with location-based service capability. This could require specifying such things as geographies the location awareness can cover, precision of location identification, latency and ability to interact with various map formats and other geo-coded information, Bernstein says. Such profiles would be useful both for providers hoping to bring such services to market, and to SMBs looking to buy said services.

Assembling the profiles will involve gathering documents and materials ranging from formal specifications to white papers from various sources, such as industry consortia and trade associations, and organizing them "so people who are procuring clouds will have some guidance as to what suites of standards and documents might fit together to make a whole," Diamond explains.

Concerns about getting locked in to a provider
Even if an SMB's cloud service provider offers the right technology, it might be the wrong provider for the company in question. It might, for example, not provide a technological growth path in line with the SMB's needs. Or it might try to take advantage of its position as an entrenched supplier to boost prices. Either way, the general lack of standardization makes it difficult for the SMBs to move from one provider to another, particularly when specialized applications are involved. The profiles that the P2301 project creates will help in two ways. First, they will make it more likely that providers offering similar applications will use the same or similar technological approaches. Second, they will allow SMBs to choose providers that build their services on widely used profiles, and to avoid those that don't. In both cases, switching providers will be easier.

Lack of interoperability
Sooner or later, most SMBs will probably want cloud services from different providers to work together. But even if the services themselves are similar or identical, that still may not be possible. What's lacking is common methods for allowing different clouds to talk to one another. The P2302 project, titled "Draft Standard for Intercloud Interoperability and Federation," aims to solve that problem by developing a formal standard that will make cloud-to-cloud interoperability routine.

This project too is still at such an early stage that it has defined little except general goals. Bernstein compares the task it faces to the creation of the SS7 and Intelligent Network (IN) protocols that the global phone system uses, or routing protocols like the domain name system (DNS) and Autonomous System (AS) numbering that support the terrestrial and wireless Internet.

Of course, it takes a lot more than communication protocols to make the Internet what it is today. Also crucial are security/encryption methods, common file formats, email protocols, browser standards and other such elements. Similarly, true interoperability of cloud services will require the formal or de facto standardization of both applications and communications, as evidenced by the fact that the term interoperability appears in the titles of both documents.

Doubts about geographic reach
Buying cloud services often introduces compliance issues. For example, many laws, regulations and certifications require data and even applications to be physically located in a particular geographic area. If an SMB does business in multiple locations, it can't go to the cloud unless it can meet the relevant requirements wherever it operates. The IEEE initiative will help resolve such problems. To start with, if the SMB's cloud provider doesn't offer service in all the necessary locations, it will be able to use other providers that base their services on the same P2301 profile. And P2302 standards will ensure that the different providers' services can communicate with one another.

Inability to get multiple applications that work together
One big obstacle to SMBs' adoption of cloud services is that the kind of services that they are likely to find most compelling don't yet exist. In particular, while individual cloud computing apps may be useful on their own, their power and usefulness increases dramatically when they are integrated with other apps. And currently such integration is difficult and complicated to accomplish.

For example, today it's possible to buy a cloud-based CRM service from one provider, and a cloud-based call center service from another, and have them work together. This provides such benefits as allowing call center employees to see both the calling history and the transaction records of a customer on the same screen, and to use the combined capabilities of the applications to help the customer effectively.

But for now this kind of integration is typically a one-off effort by one or both of the providers. The combination of common profiles and interoperability standards that the IEEE initiative produces will make such integration routine. That will open up tremendous opportunities for the development of new combinations of services. Or as Bernstein puts it, "This definitely lays the groundwork for the explosion of clouds."

— Robert Poe, Special to Light Reading

paolo.franzoi 12/5/2012 | 5:06:47 PM
re: 5 Reasons SMBs Aren't Using Cloud Services


First, SMBs are massively adopting Cloud Services.  Second, your integration example makes it seem that VoIP PBXes integrate with on Premise CRM systems as a trivial mannner.  Third, intertia is the correct answer.

I am certainly happy that somebody is off making standards in cloud computing, although they won't catch up to the edge of development for many years.  But picking the same things that are wrong with on-premise services and saying that they are the same for clouds is pretty funny.




Stevery 12/5/2012 | 5:06:45 PM
re: 5 Reasons SMBs Aren't Using Cloud Services

Note the recent Amazon outage:  Reliability for this year's stats is down to 2 nines.

Not a showstopper for all businesses, but I think that has caught the attention of some people.

Stevery 12/5/2012 | 5:06:40 PM
re: 5 Reasons SMBs Aren't Using Cloud Services

Followup to the reliability numbers:  Heroku took 80 hours, very close to 1 nine of reliability.

Their post-mortem was interesting:

2) BLOCK STORAGE IS NOT A CLOUD-FRIENDLY TECHNOLOGY.EC2, S3, and other AWS services have grown much more stable, reliable, and performant over the four years we've been using them. EBS, unfortunately, has not improved much, and in fact has possibly gotten worse. Amazon employs some of the best infrastructure engineers in the world: if they can't make it work, then probably no one can. Block storage has physical locality that can't easily be transferred. That makes it not a cloud-friendly technology. With this information in hand, we'll be taking a hard look on how to reduce our dependence on EBS.


It might be a good LR story to survey the post-mortems of the Amazon outage.  It is causing quite a few ripples of how people perceive dependence on the cloud.

Charles Studt 12/5/2012 | 5:06:15 PM
re: 5 Reasons SMBs Aren't Using Cloud Services

While we have seen an uptick in SMBs turning to cloud services, like cloud-based UC and communications, business owners are being selective about which cloud services they adopt, particularly Software as a Service (SaaS) and Communications as a Service (CaaS) offerings. Basically, if the service is simple to adopt, minimizes or eliminates up-front costs, addresses risk concerns about quality, reliability and security, and delivers value that is easy to see - solutions like SIP trunking and Cloud-based registry/federation that enable an on-demand multimodal communications experience - it is being adopted.


pes 12/5/2012 | 5:05:38 PM
re: 5 Reasons SMBs Aren't Using Cloud Services

After perusing through this article, seems to me the reader is left with the promise of "Cloud Utopia" - sometime in the future - when all these standards issues are sorted out.  IT solutions have evolved -  over time - into standard bodies and lower cost alternatives, Cloud solutions are no different. Arguably, the Cloud has been 20 years in the making beginning with the introduction of the web browser back in the 90's.

It is not really all that new, rather the technology and economics have evolved over the course of time and has now become cost effective enough to be a compelling event to cause decision makers to actually make an informed, sound business decision.

Uncertainties about providers, concerns about getting locked into a provider, lack of interoperability, doubts about geographic reach, inability to get multiple apps to work together - all these issues can be adequately addressed today for the most part.  And, every day that goes by it gets even better for ISV's, partners and customers.

We are seeing very good traction with adoption of Cloud alternative to on-premise and so is our partner community.  Economics are probably one of the main drivers for decision makers, I can think of two new customer adds in the last 20 days that we would not have secured if it wasn't for our partner having the option of offering the prospective client a Cloud-based alternative.  Both were SMB clients.  

The economics extend beyond the usual "CAPEX" play as well.  There are plenty more "savings" than can be realized and efficiencies that can be gained as a result of choosing a Cloud offering over on-premise alternative.   Customers, partners and ISV's are in a great position for achieving new levels of growth, efficiency and prosperity.  

Stand up a SMB's datacenter and its IT practices against a world-class provider that is SAS 70 LVII / Tier III or IV rated like a Microsoft, SalesForce.com, etc. Who in their right mind would even dare try and think they could legitimately compare/contrast?  And, the issues of standards, being locked into a provider, etc. as discussed here, does the customer even adopt such standards today in their own datacenter?  Aren't the SMB owners LOCKED into their current practices because there a few internal IT folks that holds the crown jewels and the business owner hostage?  

Doubts of geographic reach?  Really???  How is an on-premise based solution managed by internal IT staff in any more of a favorable position to extend geographical reach than a Cloud based solution provider who leverages say Microsoft Azure where you deploy in any one of 10+ datacenters around the globe? 

Those who sit around thinking when the economy turns, on-premise solution sales efforts will bounce back will be in for a rude awakening - IMO.  By that time, Cloud solutions will have advanced even further, and the economic value proposition will have reached new heights, and the FUD factor will become merely cannon fodder.  

So, between now and then, either you roll the dice and wait for economic turnaround, or you solve SMB/enterprise/global 2000 client matters now with Cloud/SaaS alternative today.  Also, who says Cloud has to be an all or nothing decision?  Why not pick off one considerable pain point the company is experiencing and give it a shot, easing into the Cloud rather than moving the entire IT operation overnight into the Cloud?  Measurable and manageable "First Steps."

In 2011, the software, hardware and now the economics are all coming together "in alignment" and the time to embrace the Cloud is well, shall I say - no time like the present - regardless if the makeup of your organization is SMB, Enterprise or Global 2000.



Paul E. Szemplinski


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