The McKinsey & Co. report titled Clearing the Air on Cloud Computing has been causing quite the uproar. Forbes, The Wall Street Journal, The New York Times and others have all written pieces quote the report saying “clouds are NOT very cost-effective”.
My thoughts on the topic.
- McKinsey is thinking of cloud = infrastructure (slide #12). I think that is too narrow. They need to include services like Platform and Software. Together, the value proposition of the cloud is more powerful.
- They use a new term called “cloud service” (Slide #18) which sounds like SaaS, but not sure about that definition.
- Large enterprise will not adopt the public cloud in the near future. Beyond the economics, they will have to overcome their fear about security, control and compliance. (Slide #22). I think in this category a B2B enterprise say Oracle is less likely to be early adoptor than NetFlix which is primarily a mass/ consumer driven company. They will experiment doing something piece meal.
- Agree with the assertion that SMB will be the early adopters of the cloud. Infact in our experience, some of the earliest adoptors were some really early stage companies which were “born on the cloud” (eg: CumulusIQ and PrecisionAds)
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