Cloud computing has already come a long way from its days as a brand new technological development. It has become a full-fledged industry, with all sorts of players in multiple levels of the ecosystem and, along the way, it not only has shed many of the myths originally associated with it, but also clearly demonstrated its business value in multiple use-cases and situations.

Over the past two years, I have time and again defended the benefits of cloud computing and tried to present its advantages vs. conventional systems (especially when it relates to infrastructure). Even I have to admit, however, that sometimes it actually does not make sense to make the move to the cloud; sometimes, “sticking to the old ways” might make more sense and be more aligned with business objectives.

External dependencies

The first thing that might come to mind when we talk about staying away from the cloud are security issues. The argument that the cloud is insecure is still raging, and many people have already argued its merits elsewhere. The situations I want to talk about today go beyond the obvious complaints and fears that people have with respect to the cloud, and illustrate more complex situations.

One such issue, that I have come across a couple of times over the past few months, is the creation of external dependencies by the usage of cloud computing. Some companies that make heavy use of cloud computing on their daily business are realizing that, by running their entire infrastructure in the cloud, they are becoming extremely dependent on cloud providers, to the point where this dependency creates a fundamental business risk for them.

This risk becomes even larger when a single cloud provider is used. If you’re running your entire infrastructure on Amazon, what happens if they decide to increase their prices overnight? Relying on a single vendor, on the cloud or out of it, is a huge risk but interestingly enough, companies seem to have forgotten this old lesson.

Even if you rely on multiple providers, however, the risk remains: your infrastructure is still in the hands of someone else, and you are still subject to their decisions. What this mean is that it can make sense to avoid the cloud if your company is worried about the risk (which goes far beyond a simple security risk) of relying on external vendors for their infrastructure.

A matter of cost

One of the great benefits of the cloud is enabling cost optimizations: the ability to scale infrastructure up and down according to demand allows companies to optimize their internal costs in a way that internal infrastructure, which is essentially a fixed cost, simply does not allow.

This scalability, however, comes at a price: the cost per hour for a cloud server can actually be greater than the average hourly cost of a server when it is amortized over its lifespan. This means that, for some companies, with certain computational workloads, it might actually make more sense to run those workloads internally rather than putting them on the cloud.

So what are these situations? Think about workloads where the servers have to be running full power 24×7, or nearly so. In these cases, there isn’t really any opportunity to optimize any costs (since the infrastructure can’t really be downsized), so it doesn’t really make sense to move to the cloud. Another interesting situation is companies that have already incurred the “extra costs” that the cloud could help them avoid — hardware investments and personnel costs. For these companies, purchasing more hardware can actually help them spread their fixed costs, therefore reducing overall cost, while a move to the cloud can actually mean increased costs.

Ultimately, a move to the cloud must be contemplated by companies like any other major change in technology: the benefits and drawbacks need to be weighed against each other and evaluated carefully. Just as in other IT shifts, there will be situations where it makes sense and situations where it doesn’t. Recognizing this doesn’t weaken the position of cloud advocates, but rather helps them display a maturity of thought that will be ever more important as the cloud continues to evolve.