“No one would dispute that information technology has become the backbone of commerce. The point is however, that the technology's potential for differentiating one company from the pack - its strategic potential - inexorably diminishes as it becomes accessible and affordable to all”
- Nicholas G Carr, in an article titled “Does IT Matter?” in the Harvard Business Review, May 2003.
Cloud Computing has turned that vision to reality by providing awesome computing power, much as a Utility service like power or water, to be consumed in the quantity and time of ones choosing, avoiding the setting up of substantial captive IT infrastructure.
Thus a question which arises is that would Cloud Services replace the booming RIM business? This is a fear in the minds of many companies pursuing or in the process of pursuing the RIM business. This fear stems from the mistaken belief that the cloud and RIM are interchangeable services.
The cloud is a public access environment albeit with many flavors, typically with multiple customers accessing the same infrastructure. It’s a great service for many small and medium sized businesses which could otherwise never have had the wherewithal to setup sophisticated IT infrastructure. However “Cloud” services can hope to replace captive IT Infrastructure only to a limited extent. This arises due to the following reasons:
a) Legal and compliance issues especially regulatory requirements such as accounting and auditing standards, banking regulation and information provision requirements such as SOX.
b) Data Export limitations. Certain rules like the Data Protection act in the UK and the Data Protection Directive (Directive 95/46/EC) of the European Union prohibit the transfer of personal information of customers outside certain jurisdictions.
Risk Mitigation. While using the cloud is a great way of achieving cost benefits, the downside is the risk associated with having only a single source of service. One of the most famous examples of cloud services, “Saleforce.com” has had its customers locked out of their data during server outages. In 2009 bookmarking site Ma.gnolia crashed and ultimately went out of business.
d) Security Issues: Cloud services face a challenge between making their services user friendly and having a robust security. Since there will be multiple customers using a cloud service, weak password setting at one client could leave the door open for hacking for other customers.
Unlike the cloud environment which provides Infrastructure as a service (“IAAS”) RIM actually allows an outside organization to take care of a company’s own infrastructure. So IAAS is outsourcing the complete IT department while RIM is typically outsourcing just the manpower while keeping physical control of the infrastructure.
Therefore depending on many factors some of them listed above, each of these services (RIM and Cloud) would have their own markets and would not be competing for business. One needs to differentiate the hype from the need.
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