Friday, April 17, 2009

McKinsey slams Cloud Computing for large companies

Looks like the old guard of doing business is fighting back. McKinsey released a report claiming that large corporations cloud lose money through the adoption of cloud computing. Check out this post from TechCrunch which gives a nice summary. TechCrunch conclusion:

"The report seems to hype the cloud costs and understates the rapid changes in cloud market conditions and resultant innovation and price cutting that will take place in the near future."

McKinsey summarise their report as follows:

Using "clouds" for computing tasks promises a revolution in IT similar to the birth of the web and e-commerce. Benefits include:
  • Much lower cost
  • Faster time to market
  • Great opportunities for creating new sources of value

While it has great potential, many of the claims being made about cloud computing have lead some to the point of "irrational exuberance" and unrealistic expectations. The purpose of this report is to focus the nascent cloud industry and its consumers on setting realistic expectations by taking a "hype free" approach starting with the most basic question of what a "cloud" actually is.

I'm all for a "hype free" perspective on Cloud Computing and I totally agree that there is a whole lot of "bandwagon following" going on in relation to it, however their conclusions take a very limited view of the potential of Clouds. They seem to have focused mostly on Clouds as a way of replacing in-house hardware and didn't focus on the other benefits organisations gain like increasing flexibility, scalability, capability - and reducing complexity, cost and risk.

This report makes some good points and is worth a read even with the very narrow worldview outlined.

ZeroTouch IT Ltd