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The Challenges

  • Chapter
Moving to the Cloud Corporation

Abstract

In the near term, cloud computing faces a number of challenges clearly identified by our research. These include legal and regulatory compliance considerations, security and privacy issues, managing the contractual relationship between client and cloud provider, including lock-in and dependency, as well as managing the very flexibility that cloud provides. Nevertheless, many of these types of challenge have been faced previously and effective solutions have evolved. For example, safe harbour provisions address legal and regulatory issues about transferring data abroad and over 25 years of IT outsourcing have resulted in a skill base that is capable of managing contractual relationships with key partners. End-user computing, whether in the form of desktop computers or, increasingly, smartphones, has become effectively integrated within the IT infrastructure of most organizations. Cloud computing can, and should, learn from these experiences if it is to achieve its full potential. In this chapter and the next, we report on the five major challenges identified by our research and discuss ways forward.

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Notes

  1. See Willcocks, L., Venters, W. and Whitley, E. (2010) ‘Glimpsing the Future through the Cloud: From Cost to Innovation,’ Presentation at the Cloud Business Summit, London, November 30. For more details see also www.HfSresearch.com and www.outsourcingunit.org.

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  2. When Gene Amdahl created IBM clones that were ‘plug-compatible’ with IBM’s legendary 360 and 370 series, but through the use of large-scale circuit integration were superior, IBM responded with aggressive sales tactics, which its opponents called FUD (fear, uncertainty, and doubt). In particular, IBM suggested that they were about to release better machines in the very near future — successfully persuading customers to hold off purchasing Amdahl mainframes. For a detailed description see Henderson (2009) The Encyclopaedia of Computer Science and Technology. New York, Infobase Publishing. Facts On File: 10.

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  3. Based on later research findings, this is different from our first formulation, which had Equivalence, Abstraction, Automation, and Tailoring. See Willcocks, L., Venters, W. and Whitley, E. (2011) Cloud and the Future of Business, Paper 1 — The Promise. London, Accenture/LSE.

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  4. One might also note that a firm’s financial assets invariably sit in a cloud off premises–at their banking service provider’s — exhibiting an apparently high level of confidence.

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  5. E.g. www.emis-online.com/emis-hosting-services.

  6. Distributed Denial of Service — the flooding of a server with requests from a widely distributed set of computers beyond the level it can cope with. In order to undertake such an attack, control is needed of a large number of computers — and thus malware that provides such access is often used. The distributed nature of such attacks makes them very hard to respond to. One major concern for cloud providers is the potential misuse of their services to aid such an attack (http://en.wikipedia.org/wiki/Denial-of-service_attack). One respondent commented on brand hacking: ‘I’ve had people attempt to crack — hack into — web-based solutions and cloud-based solutions … but in the same way they would have done had it been on our servers. They are trying to hack the client, not the solution … The big thing is, people hack brands or hack applications regardless of what the infrastructure is underneath.’ Steve Furbinger — RAPP, quoted in Willcocks, L. Venters, W. and Whitley, E. (2011) Cloud and the Future of Business, Paper 2 — Challenges. London, Accenture/Outsourcing Unit.

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  7. Killalea, T. (2008) ‘Meet the Virts: Virtualization Technology Isn’t New, but It Has Matured a Lot Over the Past 30 Years.’ ACM Queue, 6(1): 14–18.

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  9. Microsoft CEO Steve Ballmer gave this speech at the London School of Economics and Political Science on October 5, 2010 — Seizing the Opportunity of the Cloud: The Next Wave of Business Growth. On www.lse.ac.uk — see ‘media and events.’

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  12. Services such as Akamai focus on accelerating access to Web resources using route-optimization technologies, caching, compression, and pre-fetching of data. Akamai maintains tens of thousands of network servers globally, which monitor Internet traffic and use this information to optimize data routes. www.akamai.com.

  13. As one example: ‘every customer is on the same service level agreement in SalesForce in terms of [the fact that] they can’t, you can’t buy your way to … a higher level of service availability, for example. And our view of that was that it’s really a principle of our architecture. So what we, you know, every technology, whether they are AIG or [a] one person start-up, gets the same level of service.’ (Tim Barker, SalesForce.com, quoted in Willcocks, Venters and Whitley (2011) Paper 2).

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  14. Jimmy Harris, Accenture. Interview November 2010. Quoted in Willcocks, Venters, and Whitley (2011) Paper 2.

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  15. Amazon offers a 10 percent discount if they fail to reach 99.95 percent up-time (http://aws.amazon.com/ec2-sla/). 3Tera has a greater focus on enterprise clients and its virtual, private data-center offering provides a discount of 10 percent of monthly service fees for availability between 99.999 percent and 99.900 percent and 25 percent of monthly service fees for less than 99.9 percent (http://blog.3tera.com/computing/175/). For many businesses such discounts are irrelevant compared with the business cost of service downtime — particularly as IaaS is cheap compared with maintaining existing infrastructure — hence the discount is small.

  16. The IT Infrastructure Library is a standardized ‘best-practice’ approach to IT service management (www.itil-officialsite.com/home/home.asp).

  17. Interview with Greg Bybee of VMware, November 2010. See Willcocks, Venters and Whitley (2011) Paper 2.

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  18. Van der Heiden, G. (2010) ‘The Status of the Application Services and SaaS Market in Europe.’ Gartner Outsourcing & IT Services Summit. London, Gartner.

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  20. A point also made in Killalea, op. cit.

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  21. Dave Leyland, business development executive of Glasshouse, August 2010. Quoted in Willcocks, Venters and Whitley (2011) Paper 3.

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  22. Interview with Steve Furbinger of RAPP, October 2010. Quoted in Willcocks, Venters and Whitley (2011) Paper 2.

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  23. Excerpt from an interview with Hong Choing of Microsoft in December 2010. Quoted in Willcocks, Venters and Whitley (2011) Paper 2.

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  24. Interview with Bruce Carlos, April 18, 2013.

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  25. See Carr, N. (2009) The Big Switch. Boston, MA, Harvard Business Press: 5.

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  26. See also Carr, N. (2005) ‘The End of Corporate Computing.’ MIT Sloan Management Review, 46(3): 67–73.

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  28. See, for example, Keen, P. G. W. and Woodman, L. (1984) ‘What To Do with All Those Micros: First Make Them Part of the Team.’ Harvard Business Review, 62(5): 142–50. Those with longer memories will recall predictions of the demise of the internal IT department throughout the 1980s, to be replaced by software packages and business unit computing. The rise of IT outsourcing from the late 1980s was also regularly predicted to lead to the end of the IT department.

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  29. See Willcocks, Venters and Whitley (2010) Glimpsing the Future.

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  30. See Lee, D. (1986) ‘Usage Patterns and Sources of Assistance for Personal Computer Users.’ MIS Quarterly, 10(4): 313–25.

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  32. Interview with Robin Daniels of SalesForce.com, November 2010. Quoted in Willcocks, Venters and Whitley (2011) Paper 2.

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  33. E.g. trust.salesforce.com or http://status.aws.amazon.com/.

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  35. See Willcocks, L. and Lacity, M. (2009) The Practice of Outsourcing: From Information Systems to BPO and Offshoring. London, Palgrave, especially chapters 1 and 2.

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  36. Quoted in personal correspondence, April 24, 2013, as part of our (so far anonymized) 2013/14 round of research interviews.

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  37. Mooney, J., Ross, J. and Phipps, J. (2012) ‘Embrace the Inevitable: Six Imperatives to Prepare Your Company for Cloud Computing.’ CISR Research Briefing, 12(10, October).

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  38. Ibid.

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  39. Willcocks, L. Reynolds, P., Thorogood, A. and Schlagwein, D. (2013) ‘Cloud Computing as Innovation: Slow Trains Coming?’ Public Seminar, Sydney Accenture offices, April 23.

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  40. See Reynolds, P., Lacity, M. and Willcocks, L. (2014) Cloud Strategizing: Building The Future Starting Today. LSE Outsourcing Unit Working Paper, February. London, LSE.

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  41. Armbrust, M., Fox, A., Griffith, R., Joseph, A. D., Katz, R., Konwinski, A., Lee, G., Patterson, D., Rabkin, A., Stoica, I. and Zaharia, M. (2010) ‘A View of Cloud Computing.’ Communications of the ACM, 53(4): 50–8.

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  42. We thank Mike Hanley of PA Consulting for coining this phrase in conversation with us in January 2011.

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Author information

Authors and Affiliations

  1. London School of Economics and Political Science, London, UK

    Leslie Willcocks (Professor of Technology Work and Globalization), Will Venters (Lecturer in Information Systems) & Edgar A. Whitley (Reader in Information Systems)

Authors
  1. Leslie Willcocks
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  2. Will Venters
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  3. Edgar A. Whitley
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© 2014 Leslie Willcocks, Will Venters and Edgar A. Whitley

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Willcocks, L., Venters, W., Whitley, E.A. (2014). The Challenges. In: Moving to the Cloud Corporation. Palgrave Macmillan, London. https://doi.org/10.1057/9781137347473_4

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