Doing Business in the Cloud

Updated: July 07, 2010

One of the most popular business technology topics in the last decade has been cloud computing. Countless stories and editorials have predicted the day when cloud-based applications will replace personally owned servers and systems. It is now a burgeoning industry (projected by Gartner to surpass $151 billion by 2013) in which tiny startups compete with behemoths like Google and Amazon for dominance. Given the long-building interest, now seems an appropriate time for a "status check" on cloud computing adoption in the business world.

Today, Focus takes the pulse of business cloud computing as it stands today: how widely cloud apps are used, what the most popular business applications are, and obstacles to increased cloud adoption in the workplace.

Business Cloud Adoption


Surprisingly, cloud applications are not yet as widely used as one might think. ZDNET UK reported in March 2010 that UK business cloud usage was under 10%, and that only 8.9% of survey respondents "said they planned to use cloud computing for their mission-critical IT services." The situation appears to be much the same in the United States, where, finds, 44.1% of small businesses interviewed do not currently use cloud applications. In fact, a study finds that there may be substantial confusion among the IT ranks over exactly what cloud computing is. Some 40% of IT professionals interviewed admitted to not having a clear definition of the term, while 33% dismissed cloud computing as "hype."

Which Businesses Are Adopting Cloud Apps


That said, many businesses have adopted cloud applications within their enterprises. Nor are cloud solutions being used only by tiny, entrepreneurial firms. Longtime IT cloud blogger John M. Willis compiled in 2008 a list of the Top 10 Enterprises in the Cloud. Included in his list are such well-known and instantly recognized names as the New York Times, NASDAQ, Major League Baseball and Hasbro. The Times, for instance, used Amazon's Elastic Compute Cloud (EC2) to make every public domain article and story from 1851-1922 available free of charge in PDF form. Moreover, Derek Gottfrid (who headed up the project) "can't imagine how we might have done it" without EC2 given the raw processing power needed for on-the-fly PDF conversions.

Major League Baseball, meanwhile, has since December 2007 used virtual zone and storage provider Joyent. As NetworkWorld explains, MLB found itself up against a tight deadline to get an interactive chat system up and running between the All-Star break (the baseball season's halfway mark) and the start of the playoffs, just three months later. But despite the ambitious nature of the project, MLB lacked rack space or the time required to order in-house machines. Thanks to Joyent, "the MLB chat client was basically turned up in a couple of days vs. a month or two that it would have taken us to get somebody to ship and install all these machines."

Most Popular Cloud App Uses


Of course, big name businesses are not the only firms putting cloud computing to the workplace test. cites a 2009 study regarding the most common uses of cloud computing technology among small to medium-sized businesses. The study found that SMBs use cloud computing in percentage terms as follows:

Purpose Percentage Data Backup 16% E-mail 21.2% Application 11.1% VoIP 8.5% Security 8.5% CRM 6.2% Web Hosting 25.4% E-Commerce 6.4% Logistics 3.6% Do Not Use 44.1%

Top Cloud Apps & Companies


The leading cloud companies, not surprisingly, tend to be focused on the areas of business computing in which cloud-based solutions have been embraced. E-mail being the third most popular use of cloud technology among small to medium sized businesses may explain the popularity of Gmail and Google Docs, a web-based document creation and management suite. Using Google Docs, businesses of any size can create documents that are easily shared and updated by anyone who is granted access.

Amazon S3 and EC2 are also major players in corporate cloud computing. S3 (or "simple storage service) was Amazon's first foray into cloud technology and provided bandwidth and storage to developers on a utility-like, tiered basis. EC2, meanwhile, "reduces the time required to obtain and boot new server instances to minutes", enabling businesses to scale their server capacity up or down in rapid response to market forces. recently published its massive Top 150 Players in Cloud Computing ranking, which examines both established players and up-and-comers (many of them business-oriented.)

Obstacles to More Widespread Adoption

(Diego 3336)

The main reasons more businesses have yet to adopt cloud-based solutions boil down to confusion and security concerns. As noted, a great deal of corporate IT executives are unclear on just what "cloud computing" means. Naturally, busy executives are unlikely to prioritize experimenting with something they do not even fully understand in the midst of their hectic work lives. Fortunately, the spread of cloud success stories like those discussed earlier could reduce such confusion.

Security, on the other hand, is a more formidable obstacle. Even those executives who fully grasp the meaning and potential of business cloud computing are somewhat wary of exposing their data to computers and networks which they themselves do not own. Proofpoint's survey of IT executives found that 43% feel "cloud computing is less secure than managing things in house" while another 31% responded that they were "not sure" either way.

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