Cloud Computing IS / IS NOT Outsourcing

A recent conversation with a prospective client brought up another problem with the ‘cloud computing’ marketing hype.  Their understanding of cloud computing was that it was essentially ‘outsourcing’ their server functionality.  While I could see how they would interpret using resources outside their office as ‘outsourcing’, it only served to stir the muddy waters.

This is how I responded:  functionally, you are correct.  You can set up a CeraNet cloud server that will look and feel like the server you have in your office, (start sales pitch) plus giving you more ‘remote access’ infrastructure, agility to start and stop the server + only pay for what you use, and an almost unlimited resource pool that you cannot get on your server, etc. etc. etc. (end sales pitch).  So yes, it is very similar to finding less expensive manufacturing operations down the road vs building your own machine shop.

However, cloud computing is not outsourcing.  It is a different way of doing things.  It’s more like ‘shared manufacturing operations’ with several other businesses that use the same tools as you, but not at the same time.  Isn’t it more cost-effective to share the costs for the lights, heat, expensive tools and only pay for what you use?   I would think if you combine the resources of 10 companies you can get bigger and better tools than if you do it yourself.   Cloud computing works similar to this scenario because almost all servers only work 10-15% of the time and companies, like ours, have found a way to give you a safe and secure way of sharing those resources.

We’ll see.    Let me know what you think —

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