Weekly Update

Why Hardware-Free Businesses in 2012 Is a Pipe Dream

Gartner this week made a bold prediction: By 2012, 20 percent of businesses will forsake all IT assets for cloud resources. The analyst giant might deserve credit for being optimistic, but — unless there is major spike in the number of web-only startups — this particular prediction is, to put it mildly, insane.

Conflicting research released this week suggests that if businesses take to the clouds, they will take to the private and hybrid varieties first — and for only a fraction of their IT needs. Gartner rival Forrester itself predicted the recent freefall in IT spending will reverse this year, with server makers and software vendors leading the way. It will be difficult for this scenario to play out concurrently with a mass exodus from internal operations.

If 20 percent of businesses have adopted cloud computing at all by 2012, there is good reason beyond surveys to suspect they will adopt private, and, maybe, hybrid clouds. Why? Because those are what vendors are pushing (although it might be worth investigating whether they’re doing so in response to customer demand or as a tactic to maintain their profit margins). This week’s Microsoft-HP alliance is a great example: Although the companies cloaked the news in cloud computing, the only public-cloud agreement revolves around Microsoft stocking Azure data centers with HP gear. Otherwise, it’s about joining forces to sell the hardware and software that will comprise private clouds. Like VMware and IBM and every other IT vendor with a cloud play, Microsoft and HP are pushing the public cloud as a complement to their latest and greatest internal solutions.

Another reason for skepticism is that the cloud still is kind of scary. While even large companies are becoming more comfortable with cloud services for tasks like e-mail and collaboration (Panasonic is moving 300,000 employees to IBM’s LotusLive service), there is an inherent element of fear at play. Google, for example might claim the recent Chinese cyberattack “was not an assault on cloud computing,” but the hackers did target webmail accounts not via malware, but by infiltrating Google’s infrastructure. The possibility of insider involvement also has arisen. Some have concluded that this was an attack on the cloud, plain and simple. Will businesses start second-guessing plans to move even non-critical operations and data into the cloud?

Cloud computing’s promise is without rival, and a couple of years ago, a prediction like Gartner’s might not have seemed so outrageous. But the reality of the cloud — especially IaaS and PaaS offerings — is that only a relatively small number of businesses are currently even nibbling around the edges, much less digging in. Given the pressures to buy more gear, the well-founded security fears and the fact that 2012 is only two years away, 20 percent of companies using the public cloud would be quite an accomplishment.

Question of the week

What percentage of businesses will have moved entirely to the cloud by 2012?