All of the exciting discussion about cloud technology may be creating some confusion about what companies will be able to achieve with it.

In an interview on cloud computing, Mark White, chief technology officer for Deloitte Consulting and a lead IT principal on the Department of Homeland Security account team, points to three things most companies expect with cloud implementations:

• Economic advantage: According to White, the cloud “offers the opportunity for preferring operating over capital expense and for having a monthly subscription over a large up-front capital cost.”

• Speed: In the cloud, White says, “it only takes hours or maybe days to go from identifying the need to identifying a service provider.”

• Efficiency: White notes that “SMEs (small and midsize enterprises) are the most aggressive and complete adopters of public cloud services today, because in the cloud they have access to solutions at a level of sophistication or capability that they can’t afford to implement internally.”

According to White, one source of value in a cloud-based strategy is eliminating excess computing and storage capacity. “In one case,” he notes, “the client’s cost-per-machine image went down more than 50%, and better than that, they eliminated about 20% carrying cost for ‘just in case’ capacity.”

In the interview, White addresses some other important questions:

• Which cloud adoption model is right for a midterm IT strategy? Noting that the answer depends on a company’s size, industry, marketplace, and other factors, White suggests evaluating your workload and then conducting a pilot program. “If all goes well,” he says, “then roll it out and scale it up.”
• Are cloud-based solutions ready for mission-critical applications? According to White, many cloud-based solutions provide superior security. But the issues of privacy and data locality are still being solved.
• Can cloud solutions sometimes be more costly? White says yes, in some cases – but that higher cost can be justified as a “bridge activity” that helps the company get started.

White’s advice to CIOs who are interested in cloud services is to first look at their current IT services catalog. Next, he says, “they should evaluate the various workloads within this service catalog and which of those workloads can benefit from the cloud. Then they should build a business case because cloud is not a silver bullet. Cloud is what you make of it.”

For his part, White’s colleague William Briggs, deputy chief technology officer for Deloitte, believes that the cloud represents a turning point. “People use the cloud to do things faster, cheaper, and better – and then ultimately to do different things together, filling white spaces in the market.

“The cloud,” Briggs says, “is potentially a business model revolution.”

To download the full interview from SAP Spectrum, check out  Cloud Is Not A Silver Bullet (no registration required).