Cloud computing offers a value proposition based on convenient services that companies pay for as they go. Customized solutions can be offered in a flexible and secure environment.

Firms can off-load their noncore technologies and focus on their core businesses, providing a better product for their customers.

But cloud computing is based on the premise that users will always have access to the cloud.

Managers need to ask themselves what would happen if the service was unavailable. What if the cable from their Internet provider was cut or, as has happened with alarming frequency lately, the service was disrupted by hackers or technical glitches?

The key issue is access to the data. Servers can be found at secondary sites, but if the data is locked in the cloud, a business’s ability to function may be severely compromised if access is lost.

Even if your data is secure, your customers might be scared off if they hear that your cloud provider had suffered an event like the outage that occurred at Amazon Web Services in April – a disruption that prevented some companies, including Foursquare and Reddit, from performing at full capacity.

Few organizations have stepped up to help companies deal with these risks, so your company will probably have to take on the task itself.

First, managers need to ask vendors where and how their data will be stored and to what extent they can guarantee its availability. Second, companies should ask cloud specialists to closely read the service-level agreements offered by vendors.

These specialists should work in conjunction with corporate technology leaders and, if need be, the board of directors to assess the value of the vendors’ offerings.

Next, managers should consider cloud-based processes along two dimensions: operational dependence and risk tolerance. Your biggest concern is with processes that the organization is highly dependent on and that have a low risk tolerance – in the case of an airline, for example, the reservation system.

Placing these processes in the cloud would require fail-safe, redundant solutions that can be accessed via a second vendor.

Cloud computing is the future. In order for companies to adopt this technology successfully they must carefully plan a migration strategy and understand that problems will occur, despite their best efforts.

(Robert Plant is an associate professor of computer information systems at the University of Miami School of Business Administration.) 

Cloud computing offers a value proposition based on convenient services that companies pay for as they go. Customized solutions can be offered in a flexible and secure environment.

Firms can off-load their noncore technologies and focus on their core businesses, providing a better product for their customers.

But cloud computing is based on the premise that users will always have access to the cloud.

Managers need to ask themselves what would happen if the service was unavailable. What if the cable from their Internet provider was cut or, as has happened with alarming frequency lately, the service was disrupted by hackers or technical glitches?

The key issue is access to the data. Servers can be found at secondary sites, but if the data is locked in the cloud, a business’s ability to function may be severely compromised if access is lost.

Even if your data is secure, your customers might be scared off if they hear that your cloud provider had suffered an event like the outage that occurred at Amazon Web Services in April – a disruption that prevented some companies, including Foursquare and Reddit, from performing at full capacity.

Few organizations have stepped up to help companies deal with these risks, so your company will probably have to take on the task itself.

First, managers need to ask vendors where and how their data will be stored and to what extent they can guarantee its availability. Second, companies should ask cloud specialists to closely read the service-level agreements offered by vendors.

These specialists should work in conjunction with corporate technology leaders and, if need be, the board of directors to assess the value of the vendors’ offerings.

Next, managers should consider cloud-based processes along two dimensions: operational dependence and risk tolerance. Your biggest concern is with processes that the organization is highly dependent on and that have a low risk tolerance – in the case of an airline, for example, the reservation system.

Placing these processes in the cloud would require fail-safe, redundant solutions that can be accessed via a second vendor.

Cloud computing is the future. In order for companies to adopt this technology successfully they must carefully plan a migration strategy and understand that problems will occur, despite their best efforts.

(Robert Plant is an associate professor of computer information systems at the University of Miami School of Business Administration.)