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Cloud Computing is a mess

It seems that I’ve been locked in debates over the past couple of weeks about two themes and two subjects only Cloud Computing and Innovation.

Cloud Computing is a topic I’ll pick on today and then maybe talk a little more about Innovation tomorrow.

So what’s the problem with Cloud Computing?

It’s rubbish is the problem.

Not the idea of Cloud Computing which at its basis is just scalable computing through the internet, but the fact that it has now gained a panacea and utopian status of being all things to all people.

It’s Salesforce.com, Azure, Exalogic, Amazon and more.

Put in “Cloud Computing” to Google, who also provide clouds, and you get sponsored adverts from HP, Intel, Siemens and more all talking about clouds.

It’s Software as a Service, Platform as a Service, and Infrastructure as a Service.

It’s public clouds, private clouds, hybrid clouds.

It’s every and any darned thing you want and, as a result, it’s lost its meaning.

So I go to these conferences around the world and they’re talking about clouds and the audience is dying to know what they’re going to say.

The CIO bank attendees have heard about Cloud Computing, but have no idea how to articulate what it is to their Board and CEO, how to justify it, how to present it as meaningful and how to get a decision.

The Board and CEO have heard of cloud, but hear it’s dangerous.  They think it’s the reason why Sony and Citi got hacked, and that Amazon servers were out for days causing businesses to lose money.

They see it as risky and a loss of control.

The experts know this is not the case as, in its simplest form, if you run your bank on anyone’s technology you might as well think of it as a cloud.

But the risk of losing scale, resilience, security and control is the core issue at a bank’s heart, and they’re not willing to take that risk with cloud, especially if no-one can define it.

Talk to anyone and they define it different ways.

And in all of this confusion, the decision maker is left confused.

But here’s my take on it.

We are moving from a world of finance where technology was core to efficiency in its first wave, and differentiation was core in its second.

Initially, mainframe compute power and then BPO and virtualisation created efficient computing capabilities for financial firms.

Then the ease of modular computing, service-oriented architectures and Ajax Web 2.0 has made computing applications the differentiating factor between a winning bank and an also-ran bank.

Now we are moving to an age where computing and applications just don’t matter.

Everything will be utility computing through the cloud.

Just like the iTunes app store and Google’s Gmail for consumers, who really don’t care how it’s done and who does it as long it’s there, banks will gradually move to clouds.

The art will then be as to how you put your apps and resilience together through the cloud, rather than how you build and manage your internal fortress.

The move will happen in three stages.

First, banks will move towards clouds for shared service applications such as marketing databases (Salesforce.com).  The second wave will move core infrastructure onto private clouds and then, in third wave, towards hybrid and public clouds.

It will just be a natural evolution over time.

And the concerns of the managerial team will disappear over time.

Before you know it, all banks will be in the clouds.

By that time, computing and applications for banks will be just like Gmail and iTunes for consumers – just stuff you plug and play, and pick and choose from.

Like a smorgasbord of utilities, the trick will be to make your plate of edibles the most attractive to the target audience you are trying to reach.

And, by this time, we will all think of technology, software and infrastructure like electricity and the internet – just something you plug into and don’t care how it works.

In the meantime, we will have a period of total confusion where, very rapidly, Cloud Computing will get a bad name.

It will lose its resonance and be viewed as just another IT hype cycle, because every Tom, Dick and Harry is claiming that their offering is cloud.

This was evidenced by Gartner Group who spoke at one of my recent events about Cloud Computing and, by the end, had failed to present a single Magic Quadrant.

I asked: “where’s you Magic Quadrant for the Cloud?”

And they answered: “it’s too early yet and the market too ill-defined to create one.”


In other words, the markets a mess and we’re waiting for it to sort itself out.

So am I.


About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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