The assumption that the cloud invariably offers better value and security shouldn’t go unchallenged – nor should the idea that the wicked IT department is the major block to a golden, on-demand future.

Decisions about exploiting the cloud can actually be a question of competing economies of scale, according to Geraint Davies, head of business development datacentres and cloud strategy at comms services company NextiraOne.

“There’s an assumption that going to cloud services and data operations is necessarily cheaper. It can be, but it may not be,” Davies told a London audience.

He said even the idea that cloud services required a big and expensive infrastructure is not always true. “One notion is that if you buy big engines that need a generator, you get economies of scale. That is true. However there is a competing economy of scale that is often missed that if you buy kilowatt engines, they’re mass-produced for all sorts of sectors,” Davies said at the recent Data Centre World conference.

“So when you get into the detail, you will find that in many instances having multiple small kilowatt units is as cheap as having one large megawatt unit.”

When you are looking at architecture design, you have to trade these factors off, he said. “It depends on the scale and the customer location.”

IT department as a barrier

Davies also questioned the idea that the IT department is the barrier to everyone moving over to cloud services. “People inside private IT departments have enormous understanding of the specific customised needs of their business,” he said.

He argued that when organisations move more into cloud provision, they need the IT department’s expertise in managing contracts, along with their specific business knowledge.

Another reason why cloud provision may or may not be cheaper is the amount of processes involved. “It’s not at all unusual for the process overhead created at the service provider to balance up whatever you might save on the private side,” Davies said.

Enhanced cloud security

Security is another advantage that is touted by some for a move to the cloud. Davies said the private IT philosophy in security was one of trusting nobody, controlling closely the access to the network environment and locking down everything.

“The argument for cloud services at bottom is that cloud-services centres will be run by specialists who know more about security than any private company can do,” he said.

“If you talk about people like Google and Microsoft, it’s absolutely true that those guys can hire the best security specialists in the world and can probably do better security than any single private or public sector organisation can think of doing,” Davies added.

“However, when you hand over service provision to them, you’re making a big assumption that somebody there in the service provider is going to catch your problems and fix them for you and you’ll get noticed among the many customers.”

He said the more successful the service provider, the bigger target it becomes. “A lot of security, particularly in the computer room and the datacentre, is based on not being noticed and we don’t put up signs and we hide. That is often the best form of security,” Davies said.

He added that he is not seeing a massive appetite from customers to hand over their IT to a third party. “The trust you have to have to give your customised app to a third party is enormous,” Davies said.

Handing over business-critical apps

He added that a CIO had told him recently that his CRM system has six million lines of code that his department had customised. “We run our entire business on it,” the CIO in question had said. “If you think I’m going to give that over to a cloud-service provider, whoever they are, you’d have to be barmy.”

Davies suggested using the cloud initially for overflow and top-up. “When an application proves itself and adopts a niche brand and the service provider absolutely proves it can do that application better than you can, then you feed that into the datacentre,” he said.

“You’ll end up picking some apps that work for you and you believe in the service provider and that’s great but it will still be the minority of the applications.”

He argued that organisations should use the cloud to pick off niche applications. “The majority of computer rooms and datacentres remain private because customisation is such an important part of business and that isn’t going to change,” he said.

“There might be a bit less of it but fundamentally the majority will still be private. The hybrid model will dominate for most of the next decade.”