Global Analyst Insights by Rene Buest

“Variable cloud contracts” Please What?

By on December 8, 2012 in Cloud Computing with 0 Comments

I’ve found an interview in the German CIO magazine with the title “We need variable cloud contracts“. Please what? Variable cloud contracts? These are three words which together don’t make sense and show that the cloud computing concept somehow has not arrived yet or, and this will be very awkward, the providers wrongly advised.

Fragmented: “Variable cloud contracts”

Let us disassemble this word-mesh and image it to the generally principles of cloud computing we have the following result:

Variable

Cloud computing is inherently variable. Even more variable than any form of outsourcing we have seen in the history of information technology. And that regarding on the time of use and as well as the accounting. See next item.

Cloud

Resumed in a nutshell cloud (computing) means the flexible (variable) on demand use of (IT)-resources over a data link, preferential the Internet.

Flexible respectively variable means for a customer obtaining the resources, use them and “give them back” when he wants (on demand). Beyond that the customer just pay for the resources he used within this period and which resources he truly used (pay as you go).

So, highly variable!

Contracts

In classical thought, there are no “real” contracts within cloud computing as we normally know. In the public cloud you just need a credit card. Of course you have a kind of a contract, but this is or should be designed by the providers side, so that you as a customer will receive the maximum of flexibility. That means that the accounting ensued e.g. per hour and no monthly or even annually contract is signed. If the infrastructure of the provider is no longer needed after a certain time the settlement ends.

The tangible statement

The statement in the interview reads as follows:

“Cloud computing is a trend you have to use. Essential for us is the contractual implementation. What the cloud does, is the quick usability of IT services and the availability is separated from the company. But it will be only interesting for us, if all relevant safety requirements are met, if you can switch from one provider to another and the contracts can be designed variably. This means concretely the related resources have to be adapted within 24 hours of both upward and downward.”

In particular the last (marked in bold) part is worrying!

“… if you can switch from one provider to another and the contracts can be designed variably. This means concretely the related resources have to be adapted within 24 hours of both upward and downward.”

This statement shows to me on the one hand, that the view of the market is missing. Because there are already enough (real) cloud computing providers where exactly this demand is possible. Mentioned here for example Amazon Web Services, Microsoft Windows Azure or CloudSigma. On the other hand, this also means that so many providers continue to play a double game and define cloud computing by their own rules and so confuse the customers.

About the Author

About the Author: Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies. Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as Silicon.de and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of CloudUser.de and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn. .

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