I like to compare the Cloud to banking. Before banks existed, everyone kept their valuables at home. But today, with constantly improving security technologies and a modern and highly regulated financial services industry, the safest place for valuables is in the bank.

As the public Cloud industry matures, I believe we will see more and more of our valuable data – including the most sensitive data – being kept outside the four walls of our organizations.

But like any emerging technology, the Cloud is not without its challenges. For example, before signing on to a public cloud service (also known as “Infrastructure as a Service,” or IaaS) you should first address the following issues:

  • Service Level Agreements: With many providers, you can’t negotiate the price or conditions of SLAs, and terms may change frequently. What’s more, providers may ensure availability of the platform – but not the content running on the platform. Try to find a provider who offers flexible, predictable terms and a solid track record of uptime performance.
  • Hidden costs: When your first invoice arrives, you may be surprised to find charges and fees for items such as network transfer, input/output consumption, and support. Make sure to ask your provider for a complete listing of any fees before you sign on.
  • Incompatibility / Lock-in: Currently, it’s not that easy to migrate from one provider to another, because most providers use different cloud technologies such as different “hypervisors” – the software, hardware, or firmware that governs their virtual machine environments. One way to mitigate this issue is through the use of platform services and automated application deployment to ease workload mobility.
  • Distribution: To properly protect your enterprise and its customers, you need to know where your critical data actually resides. For example, should your information for the EMEA region reside only in EMEA data centers? If some of it resides in U.S. data centers, is it subject to compliance with the PATRIOT Act? Make sure your provider offers detailed monitoring of data placement.
  • Software licensing: You may have enterprise license agreements for your company’s software applications, but chances are they are not valid for use in public cloud deployments. Therefore, you must negotiate new licenses. This can be difficult, because it’s hard to measure license usage for cloud-based applications that may be used infrequently.

Meeting the Challenges
How can you ensure a smooth transition to the Cloud? Here are some suggestions I would like to share with you:

  • Plan ahead: Even as you enter a public cloud deployment, have a clear exit strategy at the ready so that you’re prepared for unforeseen circumstances.
  • Choose carefully: Be sure to have a use case for every block of data that is placed in the cloud. Would it provide greater value if maintained on your own servers? Do the cost savings outweigh any risks?
  • Oversee: Create a clear governance plan, and assign your internal IT professionals to serve as cloud services “brokers” who represent your organization’s best interests.
  • Audit: Conduct regular audits of the security and quality certifications of your provider – including their SSAE16 and ISO 27001 compliance.

Worth It
The challenges presented by the Cloud are all manageable. And for most companies, they are outweighed by the tremendous benefits, which include flexibility, cost-effectiveness, and rapid adoption of new business processes.

In a new report series from Oxford Economics, sponsored by SAP, you can learn more about the many ways in which organizations around the world are meeting the challenges and opportunities of the Cloud. To download the first report, Unlocking the Cloud, .