6 Key Challenges Facing Cloud Computing in 2010 and Beyond

by: Jeffrey M. Kaplan

With the New Year’s festivities behind us, it is time for me to offer some of my views about cloud computing trends in the coming year. Although I remain a firm believer and full-time proponent of the fundamental value of cloud computing, I think cloud computing vendors and their customers will face significant challenges in 2010 and beyond.

Here are the key challenges which I think must be addressed to clearly demonstrate that cloud computing is a viable alternative or adjunct to traditional, on-premise applications and data center operations.

  1. Deliver strategic value in addition to measurable cost-savings. Much of the initial success of today’s Infrastructure-as-a-Service (IaaS) offerings has been driven by their commodity prices. Going forward, IaaS and other cloud vendors must deliver additional value to survive more intense price competition.
  2. Move core business operations to the Cloud. This migration process is already underway, but must become more routine. Rather than utilize IaaS for development and testing or spikes in demand only, more use-cases for leveraging cloud computing resources on an ongoing basis are needed.
  3. Fight off escalating security threats. Security has always been a key concern for IT and business decision-makers considering cloud alternatives. To date, cloud vendors have done a good job safeguarding users’ data. As cloud computing services gain greater attention and acceptance, I think they will become a bigger target for hackers. Cloud computing vendors and users must fortify their security measures to fend off this threat.
  4. Address growing integration complexities. As the array of cloud-based alternatives and deployment methods expands, the demand for integration tools and services will also soar. This will also fuel the growth of specialized value-added resellers (VARs) focused on particular horizontal application or industry-specific requirements.
  5. Resolve intensifying channel conflicts. A year ago, I predicted a growing number of cloud vendors would launch or expand their channel programs to extend their reach into new segments of the market. Now, many cloud vendors are contending with a rising number of disputes between their direct sales teams and channel partners. In 2010, more of these conflicts are going to arise and become public, especially as the economy continues to stagnate and competing salespeople fight over business opportunities.
  6. Focus on international growth. Now that cloud computing has become generally accepted in the U.S., cloud vendors will give more attention to expanding geographically. International expansion poses serious financial, political and cultural challenges. Cloud vendors will need more data center, development, sales and marketing, and support resources. They’ll also need varying go-to-market strategies to address the differing regulatory and customer requirements in each region.

These are formidable challenges. They will take time to overcome and will determine which cloud vendors will be able to cross the ‘chasm’ to long-term success.

While strong technical skills will be essential to address the security and integration issues, solid business management skills will be far more important in the other areas.

In my next blog post, I’ll identify some of the key competitive battles which will be fought in the clouds during the coming year.

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