Cloud computing is clearly the latest hot topic for the IT industry. In fact, it’s hard to find a vendor or service provider that isn’t making highly positive claims about the business benefits of 'the cloud.' What’s all the hype about? Without a doubt, there are some compelling benefits of cloud computing, such as cost reduction, increased agility, and so on.

With a more traditional infrastructure, companies are normally tasked with buying, maintaining, managing and upgrading their own hardware and software. Clearly, this requires a certain amount of dedicated time and attention, as well as expense. With cloud computing, access to storage, applications and servers are provided and managed by a third party versus in-house. In all honesty, cloud doesn’t offer any new functions, but rather a new way of delivery.

Because of the way that cloud computing works, the solutions being offered by many vendors tend to be rather 'vanilla' in their specifications because of cloud providers’ “build it once, build it for many” approach. While cloud computing can be very useful for companies that use widely available software and systems, it will be less useful for companies that heavily rely on bespoke or highly customised software and systems. Also, because cloud computing can cause complex integration problems, the integration costs can sometimes outweigh the pure cost benefits.

As a result, most companies will probably end up with something of a 'hybrid' solution whereby some of their more standard applications will make use of the cloud, whilst others will be hosted in-house. In other words, cloud computing does not need to be an all-or-nothing proposition.

So how does a company know which applications are suitable for cloud computing and which are not? The truth is that it will depend on the business and the systems that are being used, but there will still be some universal questions to ask:

• How important is this system / application / data to the running of our business?

• Do we have the skills to maintain these systems in-house?

• How much are we spending on maintenance and support now, and how would that change with cloud computing?

• What are the dependencies between my existing business processes and applications and how will moving to the cloud affect these?

• What about regulatory requirements? In some cases it's required that data is stored in the UK, for example, and some cloud computing vendors may not be willing or able to guarantee this.

At the moment, most end-users aren't giving much consideration to the issue of system integration, and unfortunately most vendors downplay it. There will certainly be some integration work needed to keep your processes and multiple applications or data sources knitted together. How do you plan to increase the interoperability between different functions; for example, to enable business intelligence systems to mine data from CRM systems?

As a starting point, any decisions in this area should be driven first and foremost by your own business requirements, not by the availability of technology. Some aspects of cloud solutions are genuinely innovative and beneficial, but that doesn’t mean they are universally suitable. Unfortunately, many companies seem to think that cloud computing is a 'silver bullet' that is easy, inexpensive and secure, all at the same time. But the reality is that any form of IT is quite often just a necessary evil, and just because something is technically possible, that doesn't mean it's a good idea for every company, in every situation.