Someone once told me that the best management consultants are those that work out exactly what their clients want to hear, and then say it before the clients have worked it out for themselves. No surprise, then, that McKinsey consultant Will Forrest, speaking at a conference of managed hosting companies last week, told his audience that the cloud is really no cheaper than a traditional enterprise data center (the research can be downloaded here).
(As an aside, the setting subtly highlighted a common irony that surrounds those who say they'll never entrust their enterprise data to a third-party cloud provider. The vast majority of enterprise data centers are already co-located at third-party premises. The trust issue is more about familiarity and custom than any logical argument. But we'll let that pass for now).
So McKinsey told an audience of enterprise data center operators that enterprises have no reason to move to the cloud. Just what they were hoping someone would tell them. I won't waste space here dissecting the McKinsey analysis — an illustrious cast of bloggers and others have already done so. Nick Carr called it flawed. Amy Wohl says they got it wrong. Vinnie Mirchandani called it just plain misleading. The most satisfyingly succinct response came from Anshu Sharma, who wrote (and please excuse the language):
What McKinsey duo did was assume CIOs take the same exact crap software and run it on exact same excessive number of nodes provisioned for the full month at peak capacity numbers — and move that to the Cloud. That's just wrong!All I would add to Anshu's analysis is that the McKinsey research makes the supplementary and indeed crowning mistake of assuming that the said software the enterprise is using isn't crap to start off with. Or in more polite language, if you try and run the exact same stuff in the cloud that you're already running on a conventional enterprise software stack, then you won't reap any of the benefits of the cloud.
I've seen this over and over again, first with the SaaS model (when it was called ASP), then with web services, and now with the cloud. It's always the same story. People try, but you can't just migrate the same tired old assets onto a new platform and suddenly find them rejuvenated. You have to put a bit of effort in to benefit from the new paradigm. If you don't then you'll be sorely disappointed. And McKinsey have just done the research to prove it.
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