But most people aren't considering the challenges of management, and there's a lot of scepticism about cloud service providers because there will need to be high levels of trust. However, familiarity will also be a strength for companies that come from a consumer background like Amazon.com and Google.
There is a lot of talk about the opportunity to charge back for cloud services and introduce pay-as-you-go pricing, but that is probably step two when you can manage your utilisation much better and have what some people are calling ‘infrastructure as a service'.
But the biggest challenge is not the technology but the ability to change at speed, because there are significant challenges in terms of collaboration. You're combining a number of silos into a single provisioning system and crossing a lot of stakeholders who ‘own' various services.
Technologically, however, things are moving fast. In small and mid-sized companies with fewer than 500 servers, 70 per cent of servers are virtualised. In large enterprises with 1000-plus servers it's quite a different picture, with significant legacy meaning only 20 to 25 per cent of servers are virtualised and firms are struggling to accelerate. Sometimes the transformation programmes that are underway are too large and they've taken on technological progress without business buy-in.
The biggest problem after change management is cost, but if you can force through change, cost becomes a real reason for doing cloud computing. With single-click provisioning and higher utilisation of servers, storage and network ports there are 50 per cent capex savings and 40 per cent operations savings to be had. But you've got to cut the elephant up to eat it and that's why we should expect parallel programmes between private and public clouds for some time to come.
Read Mike's column on the Microsoft cloud strategy
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