Is Cloud Computing a Bunch of Hype?

If you read all the press releases from many of the new vendors then the answer is yes, there is much hype surrounding the “cloud”.  If you read the results from the latest Tech Target Cloud Adoption Index you would say “No” that the market is flat or even down slightly this quarter.

Results from surveys and proclamations from vendors can often be misleading.  What I am seeing as an in-the-trenches provider of IT management, monitoring, maintenance and security services, is a moderate level of cloud adoption taking place. It is not the wholesale adoption many would lead you to believe.  Why is this?  Simply it is the ROI.  Most cloud investments exceed their purchased IT counterparts in terms of cost over five years.  Normally it takes between month 24 and month 27 for a cloud adoption to equal its capex counterpart costs when you take into account all of the expenses for both IT approaches.  In other words, after about two years of owning a cloud, a similar business with a capitalized investment is going to be using their system for free until they decide to start retiring or replacing the assets at the typical three to five year time frame.  This leaves management with some decisions to make as to what role do they want in managing IT. Do they want capex or opex expenses? How soon will they be doing a technology refresh? What regulatory issues like HIPAA and HITECH must they deal with and how is that impacted by cloud or no cloud?

Every new cycle in IT I see the hype.  Let me share one of my favorite quotes.  It is sometimes called Amara’s Law from a research scientist born in 1925 who went on to be president of the Institute for the Future.  His quote, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run," is often borrowed by technology trend book authors as well.  That is because it is so true.  If you want a good example of the hype just look at the irrational exuberance of the Dot Com era and its subsequent bust.  Many got way too caught up in immature companies in an immature market.  At that time the Internet really did not prevail much in our everyday life, but look at how it has now caught up with us a dozen years later.  We still have most of our brick-and-mortar options too.    And so it will be with cloud computing….

Here is the Tech Target story on the topic:

Cloud Computing Adoption Numbers Don't Add Up to Vendor Noise

Here is another interesting column talking about the cloud hype cycle:

Hype Series Part II: Let’s Start Looking Beyond the Hype Peak