5 key challenges to using cloud computing

In 2013 over US$130 billion was spent on cloud services. Cloud is fast becoming the preferred method for IT service delivery for many organisations. 

Cloud services have many benefits, but like any serious IT initiative you need to follow a disciplined approach to cover off the risks and challenges with these complex technologies.

This post explores the 5 key challenges we believe you need to be considering when you are exploring any type of cloud service, including platform as a service, infrastructure as a service and software as a service. These challenges exist for nearly every organisation considering cloud as part of their overall IT services portfolio.

Procurement challenges

Procuring IT services traditionally involves one-off purchases of expensive hardware or software with additional support and maintenance costs. Cloud service models allow you to avoid these up-front costs, but instead you will pay a recurring and often variable service charge. Your organisations financial processes and funding arrangements need to capable of supporting this model, which often involves a move of funds from CapEx to OpEx.

The traditional process of issuing RFPs and selecting providers that match detailed requirements is also a poor fit for the cloud. Consumers of cloud services have limited control over the functions of the service and desirable service providers do not always respond to RFPs, especially in smaller markets like New Zealand.

Delivery challenges

Typically a software development lifecycle (SDLC) starts with a detailed requirements gathering phase, followed by solution architecture and design. The solution is then built and tested, and finally delivered into production where it is operated and maintained. Since many types of cloud services, such as Software as a Service, are already pre-built, the classic SDLC approach may not be suitable. Adhering to this approach for cloud may add unnecessary overhead and delay to service delivery. In addition, some providers will not disclose the information about their service necessary to complete typical artefacts like a Software Architecture Document.

Service agreement challenges

The service agreement defines the commercial and operational relationship between the cloud service provider and the consumer. Omitting key criteria from an agreement exposes the consumer to a range of risks including information security incidents and the loss of ownership of their own data. The ability to negotiate individual terms is often limited, especially with larger offshore providers who rely on pre-canned service agreements.

Risk challenges

One of the most important, yet poorly understood aspects of cloud services is the identification of risks and the ability to management these in the cloud. Like any technology, cloud offerings expose an organisation to a range of potential risks. While most of these risks exist within on-premise solutions, the exposure of data to untrusted networks (the internet) tends to increase the likelihood and impact of these risks. All cloud services have risks associated with them. Many, such as storing data outside the organisation boundary, will be common across nearly all cloud services, while others will be specific to a particular client or service offering.

Integration challenges

Feedback from Equinox IT’s own polls show that integration is the biggest challenge that organisations in New Zealand are facing as they increasingly use cloud services. The ability to share data between cloud services and on-premise applications is becoming increasingly important as cloud services rise in popularity. Cloud services typically do not exist in isolation from other enterprise applications and business processes. Organisations need to control how data flows between the service and their existing enterprise systems if the full benefit of cloud services are to be realised.

Equinox IT is a sponsor of the MIT Sloan Center for Information Systems Research (CISR), who have undertaken excellent research into the imperatives for preparing for the cloud.

Equinox IT is also a major contributor to the creation of the New Zealand Cloud Computing Code of Conduct, and we were subsequently the first IT consultancy to become a signatory to the CloudCode.