Keep the corporate jewels in-house
Even companies that have moved big chunks of their business to the cloud are hesitant to trust the cloud with information or functions that give them a competitive advantage. Software maker Modevity LLC has moved two of its three digital rights management (DRM) applications to a software-as-a-service model. After spending a good deal of time searching for a cloud service provider with customer service reliable enough to stake its own reputation on, the West Chester, Pa.-based software vendor chose Verizon Business to deliver Modevity applications as a service to customers, says Modevity co-founder Thomas Canova.
"There are a lot of strong cloud computing services out there that have a reasonable price point, but because of the nature of the business we're in, because we're a software provider to our customers, we wanted to make sure that the service provider we selected could provide the same high level of customer service that we provide our customers," says Canova.
Modevity moved to a cloud model to cut down on the infrastructure costs involved in running its software, and it has been able to put the savings toward future product development, Canova says. However, although testing applications under development can be another good use of cloud computing -- particularly when developers don't use real data but instead gauge performance levels and work out kinks -- that's not something Canova is willing to outsource.
Since software development is the company's true core competency, Canova says he can't see putting that task into the cloud. His concerns? That the move might open the door to unauthorized access to unreleased products, and that the process of integrating the application under development back into Modevity's quality assurance and release processes would become too complicated.
"Our focus is really around further product development and software development, as well as help desk and customer support, so those will continue to be maintained by Modevity," he says. "What we outsourced is classic cloud -- hardware and networking services that support the business."
Perfect for the cloud
Other functions that make good candidates for cloud computing include modular data crunching, where companies outsource the computation of data that can be sent to a cloud provider for processing but can't be identified out of context, thus satisfying security concerns.
For example, a petroleum company doing geographical analysis to search for new oil fields might benefit from moving modular data-crunching tasks to the cloud. In such a situation, the geographical information system would be critical to the project and therefore shouldn't be outsourced. But when the company needs to run compute-intensive models on that geographical data, it could ship just those models to a cloud provider to process and return, says Forrester's Staten. "That is a low-risk way to be highly efficient," he says.
Another common use of cloud computing is to deploy Web applications that are temporary or experience erratic traffic patterns. If a site will only be up for six months or will be prone to high traffic volume spikes, the reasoning goes, why spend the money and resources to sustain the site indefinitely or at maximum capacity?
Fast food chain Wendy's International Inc. recently decided to promote a 99-cent value meal by establishing a Web site that held auctions for various items starting at 99 cents. The site is only heavily accessed when the auctions are going on, and the company initially couldn't accurately predict how many visitors it would attract.
Since it wasn't sure what kind of performance was needed for the site, Wendy's employed WhiteKnight LLC, an interactive marketing agency, to set up a Web application with a database back end hosted by Rackspace US Inc. WhiteKnight claims that it had the site up within 24 hours, attracted 40,000 registrants in 10 days and was able to handle a sustained load of 400 database transactions per second. Once one round of auctions ends, the costs to keep the site running significantly decrease until the next round begins.