Welcome!

Recurring Revenue Authors: Zakia Bouachraoui, Yeshim Deniz, Elizabeth White, Pat Romanski, Xenia von Wedel

Related Topics: @CloudExpo

@CloudExpo: Article

McKinsey Report Aims To Keep Expectations About Cloud Computing Realistic

Clouds already make sense for many small and medium-size businesses

Clouds already make sense for many small and medium-size businesses, but technical, operational and financial hurdles will need to be overcome before clouds will be used extensively by large public and private enterprises. This is one of the principal conclusions of a report just published by McKinsey & Company, called "Clearing the Air on Cloud Computing."

The report, authored by McKinsey's William Forrest, aims "to focus the nascent cloud industry and its consumers on setting realistic expectations by taking a 'hype free' approach."

Forrest starts with the most basic question of what a "cloud" actually is and notes that benefits include much lower cost, faster time to market, and opportunities for creating new sources of value. His concern is that, while it has great potential, he feels many of the claims being made about cloud computing have lead some to the point of "irrational exuberance" and unrealistic expectations.

Termed a "Discussion Document," the report, which can be viewed here,

sets out to propose an industry-standard definition of cloud computing "including what makes it unique and exciting," then to identify the types of customers that should be early adopters—those that can benefit from existing and planned commercial offerings, and finally to understand any barriers that prevent large-scale adoption by corporations and government entities that represent the bulk of IT spending.

Rather than create unrealizable expectations for “internal clouds,” CIOs should focus now on the immediate benefits of virtualizing server storage, network operations, and other critical building blocks, the report recommends.

Clouds are very cost effective for SMEs, it notes, adding that most customers of clouds are small businesses.

But "current cloud computing services are generally not cost effective for larger enterprises," the report claims. "The cost of cloud must come down significantly for outsourcing a complete data center to make economic sense," it contends. There is also the question of High Availability, on which topic the report has this to say:

"Many enterprise (necessarily or unnecessarily) set their SLAs uptimes at 99.99% or higher, which cloud providers have not yet been prepared to match."

In conclusion the report notes that "Users, hardware vendors and service suppliers can take specific steps to ensure the successful adoption of cloud technology - and prevent it from getting stuck in the 'trough of disillusionment'."

Avoiding the trough of disillusionment will require appropriate action from all players in the cloud computing arena, says the report, specifically the following three groups (recommendation for each group in brackets): 1. Cloud users e.g. CIOs, CTOs

(Develop an overall strategy for XaaS based on solid business cases not “cloud for the sake of cloud; Use modular design in all new and re-architected software to minimize costs when it comes time to migrate to cloud; Set up Cloud CIO Council to advise industry.) 2. Stakeholder groups

(Develop improved security standards to allay fears of client base; Implement technologies that will allow for fine grain billing and management across a cluster of compute devices.) 3. Cloud tools and infrastructure e.g. HP, IBM

(In the near term, focus on small and medium sized businesses; Work on improving uptime rates into the 99.99% range; Continue to drive down prices through scale/innovation to increase potential market.)

The report is certain to stimulate constructive discussion about cloud computing and its role in Enterprise IT.

More Stories By Cloud News Desk

Cloud Computing News Desk brings the latest industry news related to the Cloud paradigm of massively scalable IT resources and capabilities delivered as a service using Internet technologies. For up to date news on the International Cloud Computing Conference & Expo series, the easiest way is to follow it on Twitter.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


IoT & Smart Cities Stories
Moroccanoil®, the global leader in oil-infused beauty, is thrilled to announce the NEW Moroccanoil Color Depositing Masks, a collection of dual-benefit hair masks that deposit pure pigments while providing the treatment benefits of a deep conditioning mask. The collection consists of seven curated shades for commitment-free, beautifully-colored hair that looks and feels healthy.
The textured-hair category is inarguably the hottest in the haircare space today. This has been driven by the proliferation of founder brands started by curly and coily consumers and savvy consumers who increasingly want products specifically for their texture type. This trend is underscored by the latest insights from NaturallyCurly's 2018 TextureTrends report, released today. According to the 2018 TextureTrends Report, more than 80 percent of women with curly and coily hair say they purcha...
The textured-hair category is inarguably the hottest in the haircare space today. This has been driven by the proliferation of founder brands started by curly and coily consumers and savvy consumers who increasingly want products specifically for their texture type. This trend is underscored by the latest insights from NaturallyCurly's 2018 TextureTrends report, released today. According to the 2018 TextureTrends Report, more than 80 percent of women with curly and coily hair say they purcha...
We all love the many benefits of natural plant oils, used as a deap treatment before shampooing, at home or at the beach, but is there an all-in-one solution for everyday intensive nutrition and modern styling?I am passionate about the benefits of natural extracts with tried-and-tested results, which I have used to develop my own brand (lemon for its acid ph, wheat germ for its fortifying action…). I wanted a product which combined caring and styling effects, and which could be used after shampo...
The platform combines the strengths of Singtel's extensive, intelligent network capabilities with Microsoft's cloud expertise to create a unique solution that sets new standards for IoT applications," said Mr Diomedes Kastanis, Head of IoT at Singtel. "Our solution provides speed, transparency and flexibility, paving the way for a more pervasive use of IoT to accelerate enterprises' digitalisation efforts. AI-powered intelligent connectivity over Microsoft Azure will be the fastest connected pat...
There are many examples of disruption in consumer space – Uber disrupting the cab industry, Airbnb disrupting the hospitality industry and so on; but have you wondered who is disrupting support and operations? AISERA helps make businesses and customers successful by offering consumer-like user experience for support and operations. We have built the world’s first AI-driven IT / HR / Cloud / Customer Support and Operations solution.
Codete accelerates their clients growth through technological expertise and experience. Codite team works with organizations to meet the challenges that digitalization presents. Their clients include digital start-ups as well as established enterprises in the IT industry. To stay competitive in a highly innovative IT industry, strong R&D departments and bold spin-off initiatives is a must. Codete Data Science and Software Architects teams help corporate clients to stay up to date with the mod...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...
Druva is the global leader in Cloud Data Protection and Management, delivering the industry's first data management-as-a-service solution that aggregates data from endpoints, servers and cloud applications and leverages the public cloud to offer a single pane of glass to enable data protection, governance and intelligence-dramatically increasing the availability and visibility of business critical information, while reducing the risk, cost and complexity of managing and protecting it. Druva's...
BMC has unmatched experience in IT management, supporting 92 of the Forbes Global 100, and earning recognition as an ITSM Gartner Magic Quadrant Leader for five years running. Our solutions offer speed, agility, and efficiency to tackle business challenges in the areas of service management, automation, operations, and the mainframe.