When you go to study Economics at degree level they teach you three things; well, at least that’s how my tutors started things out for me at Wolverhampton Polytechnic way back when in the 1980s.
1 - The first rule of economics is there is no such thing as a free meal.
2 - Industry is both an economic regulator and a barometer.
3 - Recessions can be good as they drive out the weak and ailing elements of the economy.
So to point #3, as the Eurozone crisis takes hold and we see so-termed ‘austerity measures’ implemented across several countries’ economies, what effects will we see in new ‘enabling technologies’ such as cloud computing?
The cloud crisis trade-off
Will we see older less ‘nimble’ and more wasteful computing methods done away with as new more flexible cloud-based models are brought to bear?
Or will the cost of migration to the cloud itself prove to be prohibitively costly such that new and still-nascent hosted virtualisation solutions are left out in the cold before they have even had a chance to bring greater efficiencies, lower total cost of ownership (TCO) and deliver their targeted return on investment (ROI)?
Analyst firm Gartner sits on the more pessimistic side of the fence saying that the opportunities for cloud computing value are valid all over the world and the same is true for some of the risks and costs.
According to Paolo Malinverno, vice president at Gartner, "Some of cloud computing's potential risks and costs -- namely security, transparency and integration – which are generally applicable worldwide, take on a different meaning in Europe."
The problem it seems (or at least, one of the major problems) is that ever-changing data privacy regulations across companies with footprints in more than one European nation are holding us back. The analyst firm goes so far as to suggest that Europe could be as much as two years behind the US in terms of general cloud adoption because of these facts.
Vice president of the European Commission Neelie Kroes has echoed these concerns and been talking openly about data regulations and how this needs to be aligned in Europe to make cloud easier to adopt.
“Where these barriers exist, I am determined to overcome them,” Kroes has said.
The summary truth of the matter here is that regulations are having an impact upon cloud adoption despite its still forward-facing growth. These difficulties are nothing but compounded by these times of austerity, which are further making investments in cloud harder to see through for many firms.
Every cloud has a silver lining
Gartner’s David Mitchell Smith is more upbeat and say that while these inhibitors will certainly slow down cloud adoption in Europe, they will not stop it. “The potential benefits of cloud are too attractive and the interest in its efficiency and agility are too strong to stall it for long," he said.
So it’s not doom and gloom then. EMEA technical marketing director of storage memory platform company Fusion-io Niall McLeod suggests that while budget cuts and austerity can be hugely frustrating, limitations can often spur innovation.
“In good times, there is often not a lot of need to reexamine what can be done more effectively, which can unfortunately often lead to stagnation. Many IT professionals are now looking closely at their infrastructure and moving performance to the server with flash memory to power their applications. Early adopters proved the reliability and value that results from separating storage performance from capacity, and today, many enterprises that need to achieve more with less are rapidly shifting from sprawl to efficiency,” said McLeod.
There are probably almost too many divergent factors here for us to be able to sit on one side of the fence definitively and say whether the current economic downturn has positive or negative effect on cloud computing’s growth.
Yes some short-term purchases may get shelved, but the cloud is here to stay -- whether you hold an Economics degree or not, of that you can be sure.