Cloud computing seems to have become the best thing since sliced bread for most startups. With the arrival of Amazon Web Services and Google Apps, we have seen the rise of “pay-as-you-go, on-demand basis” for all aspects of IT infrastructure, including storage, servers, and processing speed. Already several startups have bet the farm on the cloud to pay off (Heroku is one example, joined by Twitter, SmugMug, and Scribd). Bigger players have also banked on cloud computing: Apple’s MobileMe service is the most recently cited example of working with consumers in the cloud.

Earlier this month, I read a post over at GigaOM entitled “10 Reasons Enterprises Aren’t Ready to Trust the Cloud“. The article busts through a lot of the gee-whiz aspects of cloud computing and brings us back to reality. Some of the points the article makes include:

  • Security – this is the big issue. The article even goes so far as to mention HIPAA by name, since it is that important for PHI, including clinical data.
  • Lack of auditing – another big issue, especially in the clinical trials space.
  • Reliability – what happens when it goes down? More on that issue in a moment.
  • It still has to exist on a server somewhere – what are the legal complications of hosting PHI in a server farm that could be in say, Russia?
  • And oh yes, it still has to be fast – as the article says, “the need for speed still exists” in companies, and not all of the cloud can address that issue.

This piece was eerily prescient, because after I started a draft of this post, Amazon E3 went down, taking with it several Web 2.0 startups, including the aforementioned Twitter, Scribd, and SmugMug. This is the second big failure this year for them, so Amazon’s cloud computing is definitely starting to get bit by the ‘reliability bug’. It’s worth pointing out that this is not the first time we’ve been taken with technology that operates on a cloud-like principle that blew up in our faces, as one blogger points out the linkage between Amazon in 2008 and Bell Systems’ failure in 1990.

So where do we go from here? Cloud computing is definitely becoming a huge trend for the enterprise, but not ‘prime time enough’ for something as mission-critical as clinical data. As an aside, our hosting plan is entirely under our own control and nothing is given up to an external system for reasons which are now painfully obvious. However, the most recent announcement by HP, Yahoo and Intel to launch the Cloud Computing Test Bed is proof that all is not lost when you bet on the cloud.

But the clouds will keep on rolling, and we, we’ll keep on watching (underneath an umbrella).

PS – Apparently, MobileMe hasn’t been doing so well either. So, if we ever do cloud computing in the future, we’ll have lots of mistakes to learn from.

PPS – A pair of passionate posts on Cloud Computing have been written recently by Hugh of Gapingvoid fame: they are here and here: “We’re potentially talking about a multi-trillion dollar company. Possibly the largest company to have ever existed.” He certainly sparks up the idea more than I have.