Although there has been a lot of industry buzz around cloud computing, Daniels does not believe the cloud in its current form is suitable to run enterprise application such SAP. Data accuracy is not good enough and most applications will need to be re-engineered to support cloud computing.
In an interview with Computer Weekly, Daniels said, "Mission-critical applications are best run on in-house IT systems. The cloud is not an alternative delivery model to what IT does well today." To run economically in the cloud enterprise software will need to be re-engineeredto protect data in a waythat allows more than one business to sharethe same software on the same servers. This is the model used by Salesforces.com, and allows for a cost-effective service, he says.
Daniels warned that transactional applications running processes such as inventory management were unsuitable for the cloud because they cannot guarantee data accuracy. "Transaction-based applications do not scale the more servers you throw at them, plus you cannot afford inaccurate data such as the wrong information on inventory," he said.
He said HP and other IT companies, governments and academics were researching how to overcome such problems with cloud computing.
In spite of the limitations, more than a third (36%) of UK businesses with revenues up to £500m are planning or are considering using cloud hosting, according to a recent survey.
It is not all doom and gloom for cloud computing, however. Applications such as search engines work well in the cloud because they perform better the more servers they use, saysDaniels. He says cloud computing can also tackle some IT problems that would previously have been too complex or too expensive.
Daniels believes cloud computing offers a way for each business in a supply chain to publish data in the cloud, for example. A business can then run traceability reports against this data, using cloud computing services.
"This will provide good enough data for traceability. Cloud computing can also be used this way by companies to determine their carbon footprint. The cloud is very good for connecting people and data sharing. But it should not be used for process control, where the data needs to be perfect."