Will the next budget go around cloud your executive career aspirations? Think ahead to this fall, when you are at the round table patiently waiting your turn to present your strategy, plan and budget, including your CapEx request. Surely, you have worked hard on the budget this year. Zero-based it? Completed risk assessments? Tied the security processes to measurable business benefits? 

First up at the left of your CEO is the golden boy, the VP of Sales. He brings in the money and wears cuff links on casual day. “We are moving to Salesforce.com for our CRM,” he begins. “Instead of investing $2 million of CapEx funds in new software, we will simply pay a usage fee. We no longer need 24/7 IT support and our sales intelligence, collaboration and reporting will improve dramatically,” he finishes as he twists a gold cuff link.  

Sounds interesting? Sales doesn’t need all that CapEx money so that means there is more for us. Approval should be a breeze.

But then a nagging thought enters your mind. This “cloud stuff” has been popping up everywhere – you can’t get away from it. Various integration companies have come knocking, suggesting you meet to discuss their software-as-a-service solutions and managed hosting options. But your current integration partner has suggested staying the course with your current CapEx, command and control model. 

Besides, there is a lot of negative press out there about the cloud. It does not appear to be all that reliable or secure. Amazon’s cloud “broke down” and there are a number of stories about hacking and data breaches. It would be risky to rely on such services wouldn’t it? After all, you are “Security.” Yet, for each cloud related security failure, there are more examples of hacks on proprietary systems. For example, Sony’s customer records were not hosted with a third-party cloud vendor.

As the sales budget overview winds to a close, your CIO is next up. Great news… instead of a major CapEx investment to upgrade company servers, the company will be selling them to their cloud services partner and leasing the upgraded computing power required. As a result, IT will receive a credit covering the first four “cloud” payments, eliminating three support positions and greatly reducing its CapEx request. The CIO’s voice is drowned by golf claps around the table and your vision gets a little hazy….

Lions, Tigers and Clouds….Oh My...Is it possible, you wonder, that I have Nephophobia?

Now what? Your turn is next and your only hope is that the HR leader jumps in and asks for that $5 million SAP upgrade again. But she has gone 0 for 2 on that CapEx request already, and you are not sure even HR has the courage to swing for the CapEx fences a third time. What if they have gone to the cloud too?

You may not be the only one fearing cloud computing. Understanding the reasons your channel partner does or doesn’t advise you to pursue this opportunity may be as simple as how their compensation plans and vendor agreements are written. And their fear of clouds may be a greater barrier to your executive status than you realize. But the cloud simply offers a new delivery of security services and applications for your organization, which is nothing to fear. Like any major decision, there are benefits and risks to adopting a cloud model. And while TCO forecasts favor the cloud, you must measure the risk/reward equation for your specific applications.

Our Cloud: Benefits and Risks

Among the cloud clamor, the two major applications in our world are Software-as-a-Service (SaaS) and Remote Hosting, primarily of video. According to The Gartner Group, a leading IT Consultancy, 25 percent of all software used will be on a SaaS model. Examples include Gmail from Google.

The benefits are real.In addition to CapEx reductions, your organization will reduce its support staff, especially as it relates to IT staffing. I have visited some organizations with 2-3 staff members dedicated to maintaining the video systems. That money would be better invested analyzing the information provided by those systems. You get the idea.

A second benefit is that your uptime and currency of the software will be increased. Upgrades are automatic and frequent. You benefit as a user. Think of your cable company adding new channels without you having to download or install software in your home.

But there are risks. Among the most notable is that IT often hires cloud vendors without appropriate procurement procedures. Therefore, basic questions about facility security, personnel backgrounds and access to information and compliance issues (DHS, casino commissions, etc.,) must be researched. Business resilience, including emergency management and system back-up/redundancy, are vital RFP components.

And while these are brand risk issues, they are manageable. In most cases, the right cloud computing partner will offer better security than your internal organization. After all, it is their lifeblood and a core focus of their expertise. There are many great resources on cloud computing, beginning with Bill Zalud’s story this month and the Cloud Computing and SaaS Overview that is available from ASIS.

Add all things “Cloud” to your summer reading list and your Nephophobia should be cured by the 2012 budget season.