Enterprises want governance in the cloud in order to maintain control and assure stakeholders and regulators they can manage mission-critical systems that have grown increasingly complex and integrated.
In a supply chain cloud solution, this translates into having secure communications with trusted suppliers, and being able to sleep at night because you know the intellectual property tied up in your product designs is in a safe place. In banking back office operations, this means that monetary transactions, transaction reconciliation reports, and reports on portfolio holdings and other areas reported to regulators are dependably processed by the cloud provider (i.e., if back office processing is being done in the cloud). In healthcare, governance means HIPAA compliance and the ability to secure and protect patient information.
But then there is the other end of the cloud spectrum—the one that presents cloud as a commodity service that can be subscribed to and de-subscribed at will, and that carries bargain-level price points that make it difficult for business users to say "no" to the service. The tradeoff in many cases is that you get the service inexpensively, but you shouldn't necessarily depend upon it to meet your full governance needs.
Examples of cloud services that are decidedly more casual in governance include those that crash or "go down" without much explanation. (Read: Microsoft's Windows Azure Compute cloud suffers global crash, Google Drive Crashes for "Significant Subset"of Users, and Verizon Launches Broken, 'Me Too' Cloud Storage Platform) If these failures occurred on premise in enterprises, CIOs would likely face numerous questions from board members and stakeholders, and might even be in danger of losing their jobs.
Lax governance practices and a seemingly casual attitude toward outages on the part of some public cloud providers have caused many enterprise CEOs to opt for their own private cloud solutions instead.
Nevertheless, there is also a strong enterprise argument for less expensive cloud solutions that are inexpensive because they don't have to invest so much in governance. After all, don't worldwide enterprises collectively have millions of business users who are already accustomed to routine crashes of their word processing software? To these users, the comfort level with the software and its relative inexpensiveness is enough to convince them to simply get a cup of coffee and wait while the system reboots.
This dichotomy on how business feels (or doesn't feel) about governance presents an interesting question to cloud providers, which must now decide for the present and the foreseeable future what "kind" of providers that they want to be. Do they want to be the platinum-grade, full-strength enterprise solutions, with a price tag for services and diligence in governance that reflects the effort? Or, do they want to be more of the "discount store" variety of service that everybody can afford and get value from, at the sacrifice of enterprise-strength governance?
There's room for both. And the sooner cloud providers decide which type of cloud provider they want to be, the sooner it gets easier for enterprises and SMBs to differentiate them from others and to understand the specifics of the value propositions they offer.
Do you think we're at a crossroads? Share your thoughts about the cloud and governance in the discussion.
Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President of Product Research and Software Development for Summit Information Systems, a computer software company; and Vice President of Strategic Planning and Technology at FSI International, a multinational manufacturing company in the semiconductor industry. Mary is a keynote speaker and has more than 1,000 articles, research studies, and technology publications in print.