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Cloud Computing is a Bad Idea?

According to Federal Computer Week, federal managers doubt cloud computing cost savings.  500 government professionals were surveyed, with the majority (36 percent) in a managerial position. Most respondents were employed at defense or civilian agencies. (1)

 The respondents were not sold on the promises of cloud computing as a long-term money saver. Only 12 percent said the cloud could potentially bring significant cost saving, while one-third said the cloud would have no impact on costs. Nearly 20 percent thought the cloud would result in some cost increase; 6 percent said a cloud migration would lead to significant cost increase. This means that 60% of the managers were negative about cloud computing and only 12% were totally positive. These findings are different from available commercial cases and models that show greater then a 50% cost reductions and a break-even achievable in less than two years.

Respondents said they were “somewhat familiar” with the declared “cloud-first” initiative. More than half said they have partially complied with the directive of identifying only one or two cloud opportunities. Less than one-third said they have shown compliance with the identification of a strategy to move three or more services to the cloud.

It appears that defense and civilian agency executives report a largely negative attitude about the potential savings from cloud computing. There does not appear to be an incentive to view cloud computing as an opportunity. What supports this conclusion is unknown. What matters are the negative attitudes, which will surely inhibit further progress.

The most plausible explanation for the negative attitude is the realization that the existing budgetary and management processes will block the achievement of gains, even if information technology could become available.

The top obstacle in progressing toward cloud computing is in the insufficient scale of operations. With IT budgets splintered into 5,600 line items, each with a commitment of several years of funding, most of the projects do not have the scale for consolidation into larger cloud aggregations. The problem of bringing over 70,000 servers and close to a hundred thousand of separate applications under enterprise-wide virtualization constitutes a challenge that is unmanageable from the standpoint of those who are operating under current limitations.

DoD is attempting to deal with this issue by pursuing a policy of data center consolidation as its primary initiative to cause a shift in favor of cloud computing. Though the elimination of fixed data center costs may deliver some savings, the cost of realizing higher server utilization through virtualization is unlikely to deliver large savings. The cost savings are to be found primarily in the savings in operating costs – which are primarily labor costs - and not in the reduction in capital costs. Unless DoD simultaneously pursues the reductions that are available through the consolidation of applications, the new data centers will have to spend capital for housing the identical diversity of applications that are currently require support of a large staff of operating and maintenance personnel.

The most likely explanation for the largely negative attitude towards cloud computing reflects the executives’ own skepticism how likely DoD would be able to alter present IT management practices.


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