Today, many midsize and large companies are taking a piecemeal approach to cloud computing. While the majority of companies are experimenting with cloud computing, few have migrated their entire infrastructure to a public or private cloud environment. A survey published in January by Enterprise Strategy Group of more than 600 enterprise and mid-market companies globally found that 27% were using public cloud IaaS services, up 10% from a similar survey published in early 2011. 24% of respondents said they haven’t pulled the trigger on a cloud solution yet, but plan to at some point in 2012.

While cloud offerings from behemoths like Amazon are at the forefront of press coverage, many companies are seeing compelling incentives to gradually transition their infrastructure to the cloud, and construct more customized and hybrid solutions often offered by smaller and lesser known players in the industry. A hybrid approach enables organizations to ease the transition to cloud, and alleviate any risks associated with a complete cloud migration. What does the role of cloud computing look like for organizations in the near future?

Cloud computing is becoming ubiquitous in today’s businesses, with the rising popularity of free SaaS applications like Dropbox and Google Apps, among others. For IT decision makers, however, the decision to migrate all back-end and mission-critical applications to the cloud may not be the most appropriate – at least for now. In many instances, a gradual progression to the cloud is an ideal strategy. This is why the Hybrid Hosting model is an attractive option for many businesses. Hybrid hosting combines aspects of physical hosting and cloud computing, and facilitates a seamless progression to a completely virtual hosting solution. Businesses are able to pick and choose what services are required, the types of management levels provided by the vendor, and whether or not their data and applications are stored on dedicated hardware or shared virtual servers.

Taking the Hybrid approach is also a necessity for some organizations, since there are still some significant barriers to cloud adoption:

Security: High-Risk applications, such as those that store financial, medical, or other sensitive information, may not be suitable for a public cloud environment. It is also important to verify the level of encryption included in a public cloud offering. Furthermore, organizations must determine exactly who has access to the data stored on virtual machines through the administration panel. Security concerns must be evaluated on a case-by-case basis. Once this occurs, then the cloud can be evaluated as an appropriate or inappropriate solution.
Compatibility: Many companies are still using legacy systems that predate virtualization technologies. As a result, these systems will not work well in the cloud unless they are significantly reconstructed. Additionally, end-user licensing agreements may not allow for deploying these systems virtually. Legacy systems are typically not appropriate for the cloud due to issues surrounding compliance, end-user support, licensing, high-speed data access, and internal skillsets. The process of transitioning a legacy system to be cloud-ready requires a significant investment in time, resources, and money.
Geography: One downfall inherent with public cloud offerings is the physical location of data. Many organizations require confirmation of where their data resides geographically. Unfortunately, many public cloud offerings disperse their infrastructure throughout multiple jurisdictions. As a consequence of this reality, customer data can become susceptible to different legislations covering specific geographic boundaries, such as the US Patriot Act, PIPEDA (Personal Information Protection & Electronic Documents Act) in Canada, and equivalent legislations and guidelines in the EU and many countries around the world. For example, with Canadian-owned and operated organizations looking to store their data in the cloud, the risk of having their data being susceptible to international legislation has proven to be a deterrent to adopting cloud hosting solutions.

Is the future of data centers 100% cloud? Once more organizations become comfortable with cloud computing, and after the barriers listed above are remedied, the progression towards 100% cloud adoption will increase. The Hybrid hosting model will remain integral to many organizations wishing to transition all of their applications to the cloud. With that being said, an evolution to 100% cloud is not likely to occur anytime soon. Due to compliance, compatibility, security, geographic concerns, and internal skillsets, many organizations will still require physical hosting services and on-premise infrastructure to fulfill their requirements well into the foreseeable future.

Robert Offley is the CEO of CentriLogic, a provider of managed hosting and cloud computing solutions.