Companies Not Ready to Move to Computing Utility Facilities

• 07/20/2001

Many companies are leery of moving IT operations to a computing utility facility, according to recent research by the Cutter Consortium, which cites security as the primary concern. A computing utility facility is an off-site location that houses numerous network providers.

Running a close second was concern about instability in the service provider market. Primary issues that need to be addressed before moving operations, according to the Cutter survey include:

• Security Concerns -- 65 percent
• Instability in service provider market -- 62 percent
• Psychological barrier of data storage outside of company facilities -- 56 percent
• Unresolved technical problems -- 41 percent

"The bottom-line worry of IT professionals here is that vendors might not do as good a job in taking care of vital company data," explains Cutter Business Technology Council Fellow Rob Austin. "Although there may be merit in this concern, it is equally clear that companies routinely trust their fates to outside firms in many other areas. Businesses have flocked to voice mail in large numbers, even though the potentially sensitive content of voice mail messages is stored by a service provider."

Companies recognize a plus side to moving IT operations offsite, as well. According to respondents, primary benefits include lower costs and better services.

"One message that emerges clearly from these results is that the computing utility industry is still in its early days," concludes Austin. "People recognize the theoretical economic benefits of the model, but they see it as a distant, rather than imminent, trend. The IT professionals who responded to the survey are people who work in the day-to-day details of the field and are attuned to issues of how such a model might operate. And they don't see it happening yet. More than half (56 percent) said, at least for now, the risks continue to outweigh the benefits."