Virtualising servers, purchasing space in data centres and utilising applications hosted and managed by third parties all have undeniable benefits: they can increase efficiency, decrease IT-related costs,
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But cloud computing also presents risks that might, to some extent, overshadow the benefits. Initial worries regarding data security are now eclipsed by an even bigger issue: vendor lock-in. All may be well if an organisation stuck to one provider, but what would happen if they wanted to bring data back in-house as they grew, to transfer it to another provider as part of a merger, or to get a cheaper and more efficient provider for some of their services (e.g. only email or backup)?
The key to avoiding lock-in, it seems, is to not have all your eggs in one basket.
Ayodele Soleye, Senior Consultant at Plan-Net,
Retrieving and migrating data, unfortunately, is not an easy and straightforward process, and the costs involved might present a barrier.
The absence of set standards for data formats and APIs to allow interoperability between infrastructures could make migration to another cloud vendor a complicated and expensive process. Apart from possible end-of-contract penalties, organisations will be charged both for format conversion and for the transfer, and additional charges may apply for bandwidth usage. Altogether this can amount to a very large figure.
The cost of migration
Migration costs can become prohibitively high when dealing with a large amount of data, and though it might seem easier and more convenient to have one vendor providing all services, such singular reliance has the potential to reduce flexibility, the ability to make structural changes and the search for more cost-efficient and bespoke solutions.
Experts reckon it might be a few years before data and service portability within vendors will be possible, but organisations need not put off a move to cloud computing -- they just have to apply some smart thinking. The key to avoiding lock-in, it seems, is to not have all your eggs in one basket. Cautious organisations are already using this technique, which sees them selecting more than one vendor to provide different services based on a few criteria: ideal candidates would have to provide modular packages, use popular formats for data and services, and be transparent on regulations and fees applied to data transfer.
Choose different providers for different services
Many benefits can be achieved by choosing different providers for email and backup, for instance, and they don't end with diminished risks related to lock-in. With this strategy, organisations are also able to create a bespoke and flexible solution, fit for the needs of their particular business, and choose the best offer for each service. In some cases, the overall price could be higher than the cost of a single provider for all services, but the latter solution presents a higher risk of financial loss in the medium or long term: if it is prohibitive economically and time-wise to switch vendors, then price is inelastic and can be increased at any time, leaving the organisation no choice but to pay.
It is also essential to take into account the risk of a provider going bust: the recent security attacks on Google and the dot-com meltdown have taught us that no company is too big to go out of business, and if all your data is with that provider, you might never get it back.
To avoid data and financial loss, then, the only solution is to use more than one vendor. It is only through a game of pick and choose that lock-in risks and their consequences can be avoided, while still enjoying the cost-efficiencies made possible by cloud computing.
Ayodele Soleye is a Senior Consultant at IT service provider Plan-Net and a contributor to SearchVirtualDataCentre.co.UK.
This was first published in August 2010