Their Business, Your Risk

As the cloud market matures, it’s important for CFOs to understand the cloud-provider business model and track their business risks. If your provider is heading for trouble, so are you.

Security, privacy, location of data, total cost of ownership, lack of standards, and vendor lock-in are just a few of the well-understood risks of cloud computing. A less understood, but no less important, risk is your cloud provider’s business model. By understanding your provider’s underlying business model, you can gain a better understanding of how its problems can quickly become yours should it be unable to maintain its ongoing (and necessary) investments in the people, processes, and technologies that keep its product suite secure, robust, and current.

At the technical level, there’s nothing terribly mysterious about cloud computing. At the end of the day, we’re still talking about operating systems, software applications, and database systems running on IT infrastructure in data centers, supported by a mix of technologies and a daisy chain of IT providers.  But at the heart of a cloud provider’s offering lays its business plan, investment strategy, technology, and innovation road map. And that can be less transparent.

If you’re running your business’s critical systems in the cloud, you’ll want to be the first to know if your vendor is having problems. Exiting the cloud on anything other than your own terms is traumatic, expensive, and risky. So let’s go behind the scenes and look at some of the key issues cloud providers face as they develop, market, and support their products.

No Capex for You; Plenty for Them
The core of the cloud’s value proposition is its pay-as-you-go model.

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