Can Cloud Be Like a Subprime Mortgage?

building failure 155x223pxAlmost every aspect of modern life has been exposed to the cloud in one form or another.

Today, for most organisations if you don’t have cloud-like technologies used within your business, chances are you may feel left out. This made me think about the ways in which cloud computing resembles those subprime mortgages that dominated the news cycle not so very long ago.

Cheap now — expensive later? Just like a subprime mortgage, the barrier to entry in cloud computing is very low. Consequently, full life total cost of ownership (TCO) considerations are not always top of mind. In certain instances, the cumulative cost of paying for a perpetual subscription may well exceed the cost of a conventional capitalize-and-depreciate purchase. CFOs should know if — and at what point — breakeven will occur.

Democratization of IT: Just like a sub-prime mortgage, almost anyone can have a cloud application. Far-flung parts of a business can do their own thing, as it were, without having to involve the IT department. This raises the spectre of an uncontrolled cloud implementation known as a viral cloud. A viral cloud is characterized by a localized initial installation of a cloud system (approved or otherwise) which expands in an uncontrolled manner. Do federated risk and governance problems concern you? They should.

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