'Cloud Washing' hits feverish pitch as enterprises begin to migrate to the Cloud

Over the last few months, I have had several discussions with CIOs, CTOs and Directors of IT about Cloud Computing. I have also had these same discussions with research firms seeking to understand what the 'State of the Cloud' is today and where it is going in the near term. While I have seen small adoption in the Fortune 500 space, the SMB/SME space is exploding in the cloud. This has not gone unnoticed by many hardware and software manufacturers, resulting in the 'Cloud Washing' phenomenon taking place in the industry.

Having worked closely with people in the environmental sustainability movement while engaged with large scale virtualization projects in the Bay Area of California, I remember the constant discussions about companies attempting to 'Green Wash' their products or offerings. While some claims were legitimate, far more were amazing stretches of the truth or outright lies about the 'greenness' of their offerings. When 'green' became hot, all of a sudden, every product and service on the market was as emerald as they come. We now have the same thing happening in the IT industry, but instead of 'green' we have 'cloud.'

We have defined 'Cloud Computing' several times on this blog, but as you know, definitions of new technology can shift over time as adoption and offerings grow. I have often said that it is much easier to define what Cloud is not rather than what it is. Using this approach, it is much easier to sift out products and services that are not truly 'cloud' and only include those that meet a certain minimum criteria in a discussion.

Let's start with a broad statement: In order for something to be 'cloud,' it needs to be accessible via a network. In tech speak, the 'cloud' has historically been associated with the internet as a whole. IT people always talk about their pipe to the cloud, or rather, the bandwidth of their internet connection. In that one sentence, notice that the cloud is an external entity that they are connecting their business to. The cloud is not inside their data center. The cloud is the internet itself. That is a rather loose description, but it defines the base premise that on-site resources are not true cloud. There is no such thing as a 'Private Cloud.' I always ask the question: "Is someone selling you hardware?" If so, their offering is not 'cloud.' If a vendor is still talking in terms of physical hardware, RAM, processor speed, etc., even in a virtual sense, it is not cloud. That should knock out about 50% of the products and services out there that are parading themselves as 'cloud' but are truly nothing of the sort. With that said, let us look at some characteristics of what true cloud offerings have.

The single largest differentiator between traditional data center technology and cloud computing is scale. Can you scale your usage up as high as you want without ever discussing hardware? Can you then scale down usage when you do not need it? Are you only paying for your actual resource usage or are you paying by some other older standard like server count? If you are able to scale up and down as much and as frequently as needed and only pay for what you actually use (Utility Billing) then chances are high that you are in a true cloud.

The second largest differentiator is multi-tenancy. This means that the aggregate compute power of the cloud provider is shared among all of the users (tenants), not divided up into silos that limit scalability. From a consumer perspective, this should be transparent but understood. Measures are taken to ensure that users can scale up and down without negatively affecting other users in the same cloud while still managing the entire cloud in terms of aggregate resources. If you are the only user sitting on a given set of resources, then you are not in a true cloud. Your costs will also likely be higher as this is no different from renting a few dedicated servers and using them as a pool for your application. You may also be billed a flat monthly fee (or similar set fee) instead of utility billing as you are not sharing the costs with other users for the same underlying resources.

The third area where a true cloud offering differs from 'cloud washed' offerings is how resources are provisioned. Are you able to provision an instance immediately from a portal and have it operational within a few minutes? If so, you are working with a true cloud. If you have to go through an archaic process of requesting resources, such as opening a ticket to have someone build out a 'server' somewhere for you, then you are not truly in the cloud. Chances are, the vendor is using common virtualization offerings and building out virtual servers for you in that infrastructure. Things such as increasing the resources you need are manual or ticket driven instead of on-the-fly via a portal. User self-provisioning is key when looking for true cloud offering.

So, with all that said, it is actually quite easy to find which products and offerings are truly cloud and which are cloud washed versions of products that manufacturers have sold all along. The biggest red flag in terms of cloud washing versus true cloud is Utility Billing. If you are being billed in flat fees instead of what you actually consume, there is a problem. Secondly, if you have to put ANY of the costs from a cloud product or offering as CAPEX instead of OPEX, there is a problem. You should not be buying hardware or software. You are buying a service. That service should be billed by usage. If a potential cloud product or offering makes it past these two tests, then you can look at scalability, multi-tenancy and provisioning to ensure that you are getting a true cloud offering. I hope this article helps to peel away the cloud washing and marketing speak out there and offers insight into 'true cloud.' If you have any comments or questions, please leave them below and I'll he happy to address them.


  1. The CAPEX/OPEX test is not a good one. Netflix buys reserved instances from AWS and writes them down as capex. It doesn't mean that they can't scale up or down, but they might as well reserve their minimum requirement.
    Although you may want OPEX if you have to optimize your cash flow, CAPEX may be preferable if you are cash rich. Whether or not it is true CAPEX (there is no asset on your balance sheet... or is there?) is more a reflection on (creative) accounting than a test for cloud washing

  2. Excellent point. For some enterprises, CAPEX may be preferable to OPEX. According to GAAP, however, utility billed services would fall under OPEX and not CAPEX. Do you have some documentation to show where Netflix writes down their AWS services as CAPEX? I would love to see that.