Is all the talk surrounding cloud computing just hype? Featured

2:46pm EDT March 1, 2011
Is all the talk surrounding cloud computing just hype?

The Gartner Group has become rather famous among IT professionals for its annual release of the “Hype Cycle” — a list of technologies that have gotten so much press that they have reached the zenith of expectations and the only path forward is downside.

Gartner defines this as a “phase of overenthusiasm and unrealistic projections.” Gartner released its annual Hype Cycle 2010 report this past October, and, as expected, cloud computing — along with 3D flat-panel TVs — was at a peak.

“While according to Gartner, it means these technologies may be on their way to mainstream, the next phase is one of disillusionment, as the technologies fail to live up to expectations,” says Mark Swanson, the CEO of cloud communications provider, Telovations, Inc., headquartered in Tampa, Fla. “However, this is where the real adoption takes place.”

Smart Business spoke with Swanson about cloud computing and whether or not the talk surrounding it truly is all hype.

Based on the hype surrounding cloud computing, are we in for a letdown?

In the near-term, I would say yes. It is very hard to live up to the expectations that cloud computing marketers have set up for us. But in the long term, we are still in the early phases of what is coming. Think back to 1997 and the buzz surrounding the Internet. Consumers and companies were excited about the technology’s potential but worried about security, privacy, bandwidth, standards and more. Sound familiar? I am hearing these same concerns from IT leaders today. However, those problems ended up presenting tremendous opportunities for companies like Symantec, Google, Akamai and others to solve. They will be solved and are being solved today by many new innovative products and companies.

You used the example of the Internet. What were the drivers that enabled the Internet to transform communication and commerce?

In a word: value. Both consumers and businesses found tremendous value in transforming the way they operated to leverage the value of the Internet. The spread of ubiquitous network connectivity allowed businesses to reach their customers much more cost effectively and provide greater visibility, control and efficiency for both the buyer and the seller.   In addition, the ability to deliver new and innovative services created entirely new revenue streams for businesses.

Look at, for example. When the website was launched in the Fall of 2000, it accounted for a minute fraction of the $165 billion in revenue. Yet just ten years later, it is now one of the largest retail sites on the Internet, with over $20 billion in sales. Not bad from a standing start!

Do you see the same thing happening with cloud computing?

I believe that cloud computing will deliver even greater benefits to companies and it will revolutionize enterprise IT in the process. Most of the IT leaders that I talk to readily see cloud computing’s ability to increase return on investment, decrease total cost of ownership, speed up development, improve reliability and renovate the perception of IT in their companies. Cloud technologies dramatically decrease the cost of maintaining infrastructure over traditional architectures. Developing applications is much quicker, server consolidation is much easier, maintenance time exponentially decreases, and on and on. The cloud really is creating more agile, competitive businesses.

Are there issues that are preventing businesses from realizing these values?

Certainly there are problems that need solving. Network bottlenecks mean applications might not perform as quickly, there are many perceived security issues involved with moving systems off premises, and a lack of standards is keeping applications from talking to each other and others. However, even in its infancy, cloud computing is already delivering significant value to companies. Although technological and organizational challenges to adoption remain, IT leaders report the pursuit of IT-driven business benefits will only increase their cloud computing commitment and investment in the near future. Gaps in technology and vendor offerings remain to be filled.

So what’s the future of cloud computing? How quickly do you see these problems being solved and adoption happening in a more mainstream manner?

As Yoda — the character from one of my favorite movies, ‘Star Wars’ — says, ‘Impossible to see what future is.’ It is hard for me or anyone to make an accurate prediction. However, I think that cloud technologies have now garnered enough traction in the market to retain a permanent presence in the lexicon of the landscape of computing paradigms.

I think we saw a tipping point in the last year — at the peak of the hype cycle. I have thought that there are certain applications where cloud technologies might not be applicable, however, I see the issues going away. Emerging technologies, like 4G wireless and better encryption, are combining to solve problems like bandwidth and security faster than I expected. Even I no longer see the need to carry around a six-pound notebook computer. Cloud has enabled me to reach my desktop from anywhere with my iPad.

At Telovations, we see accelerating adoption and interest in cloud communications solutions, and, from what I hear from my industry peers, this is an industry in fast transformation. Now’s the time to get to work in solving these issues to leverage the significant benefits that cloud computing technologies have to offer.

Mark Swanson is the CEO of Telovations, Inc. Reach him at