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IT Challenge: Is cloud computing always the right choice?

In this IT Challenge, find out if moving business applications to a cloud computing environment is always a good idea.

The IT Challenge of the Month for March 2012:

Are there any business applications that should never be put on the cloud? Does some functionality just work better in-house, or can any software system function successfully in a cloud environment?

Do you have a solution to this challenge? Have you encountered a similar issue at your business? If so, please contact the editors and share your suggestions or experiences. 

IT Challenge respondents will receive a free copy of a new book from SAP Press.

And be sure to check back here all this month -- we'll be posting solutions from experts and readers as we receive them.

From industry analyst and CEO of Constellation Research Ray Wang:

There are a couple of ways to look at which applications belong in the cloud or out of the cloud. I try to use the following dimensions:

1. Security. You have to think long and hard about mission-critical information and confidential information. The initial reaction is to assume your private on-premises data center is safer. Unfortunately, these days, cloud data centers may be going through more rigorous security standards and larger pooled investments in security than what the average individually or company-owned center can deliver. You need to evaluate this with an open mind.

2. High-transaction processing. Do your facilities deliver better performance than the cloud services provider? If you need rapid response times, stay on-premises.

3. Bandwidth constraints. If your manufacturing plants or divisions don't have access to good networks, the cloud may not be for you. If they have easy access, then you can consider the cloud.

4. Mass customization. If you need to customize apps, Software as a Service (SaaS) may not be for you. The strength of the metadata configuration layer will be your key test here.

If you meet these three requirements, you can put most applications in the cloud, including:

  • Time and attendance
  • Sales and operations planning
  • Core manufacturing ERP
  • Financials
  • HR
  • CRM
  • Supply chain

Mission-critical systems that don't have a local backup you control shouldn’t be in the cloud. In a cloud failure, you can't just blame it on the cloud and hope for the best. Your shareholders and stakeholders expect you to be on top of it.

From industry expert Steve Phillips:

As long as the software meets your needs, I am not aware of any set of applications that universally work better in-house or in the cloud. At the same time, “meeting needs” involves several factors. First, it includes the functionality of the system. Second, it involves system performance. Make sure any SaaS or cloud provider has adequate infrastructure to support your level of transaction processing. Third, look at the level of support provided from a software standpoint.

Finally, system security is important. This is an area where I would not go with cloud computing under certain circumstances. With highly sensitive data, a breach in system security would deeply affect my customers to the degree it could put my company out of business. In this case, I would host those applications internally.


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