The Harvard Business Review out on the newsstands right now has an article about what CEOs need to know about The Cloud. I’d link to it, but it’s behind a registration wall, and it’s not really worth but a skim for those who’ve heard the term before.

My first reaction is, “Gosh, looks like we lost the battle on what the definition of ‘cloud’ is.” Basically, anything that runs on a different system that you consume is the cloud. Web, email, files, whatever. Fine, I get it and I’m fine with that. Oh well!

I felt the article had a decent review of the definition of the cloud as well as the quick benefits. However, I did want to mention one I think didn’t get enough face time.

The things offered by the cloud are not so amazing that internal IT teams couldn’t do them. Sort of. That’s what the article says, and mentions that internal IT is stretched. I agree, and I’d say that at least these third-party app providers (cloud providers, SAAS…) can afford to have such a laser-focus that they can do a really good job with what they provide. I fully think that needed to be explicitly stated as a tangible benefit. Your internal CRM is cool, but that Salesforce.com CRM is going to be the better. I thought this just needed to be really highlighted as a point.

On the flip side, I felt the review of the risks/costs of cloud were really glossed over too lightly.

Specifically I didn’t like the lack of mention on how cloud applications (like docs in the cloud or email, or CRM..) are not going to every be nearly as customizable as your own internally managed apps and products. My company is currently in the midst of reviewing the replacement of our internal Microsoft Exchange infrastructure with something like GMail/Apps. But I can guarantee that many of the little pieces in our mail and calendaring settings and tweaks and processes are just not going to be possible in someone else’s product.

You get a laser-focused tool, but you get the same tool as everyone else gets, without any special sauce of your own.

Which actually brings up an entirely related point: What do you have when you and all of your competitors all use the same platform? You lose any ability to say you have better technology or better channels or better processes. You’re all going to be doing things the same way. (Some may even wonder if there might be a conflict of interest when Big Fish in an industry with bigger wallets influence a cloud provider’s tool to tailor to what they want…)

Some might praise this as a way to compete directly and solely on people and business product. I can buy that, but I’m not sure that’s something many businesses think about when going onto cloud services. In that way, the benefit is not to do work better than your competitors, it’s simply to cut costs of infrastructure.

I also felt like there was a glossed-over cost of control over your own data. At the end of the day, if you move to another provider or go back in-house or want to provide and have assurances that your data is protected and private and recoverable, you’re working under blind faith with your cloud provider. At least with internal infrastructure, you have unlimited ability to audit, test, and verify. (At the cost of an unlimited ability to cut corners, lie, cheat, and be negligent/ignorant.)

Essentially, we had this cycle where we moved from mainframes and time/cycle clocks and sharing to decentralized PCs, and we’re moving back to centralized computing. Yes, it will go back again, and repeat and probably for the same reasons: customization and control.