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New Balance steps back from the cloud buzz

An IT exec at a recent tech leader conference says cloud isn't always best for his company's ever-growing volumes of data -- stirring a different sort of cloud buzz.

Boston footwear manufacturer New Balance is expanding into new markets, with a widening online presence, and has...

transitioned from being exclusively a wholesaler to a retailer as well, with stores popping up all over the globe. It's launching a smartwatch for runners and this year will begin sponsoring the New York Marathon.

The information management challenges posed by such initiatives are tremendous. The loads of customer data, combined with analytics and outside market insight on competitors, are enormous. How much of New Balance's IT infrastructure is in the cloud, where capacity, cost savings and efficiency are promised to soar?

Around 30%, said Ravi Shankavaram, New Balance's vice president of IT.

"There's a lot of hype about cloud," Shankavaram said at last week's SIM Boston Technology Leadership Summit in Newton, Mass. He was answering a question from a member of the audience of more than 300 about what's in the cloud and what's in the company's data centers. "Where we're heading is, as the volume grows and as the consumption grows, cloud is not really the place you want to be."

A lull in the cloud buzz?

The company has a "cloud-first" strategy, Shankavaram said, so in theory, it chooses a cloud computing offering for new technology initiatives unless there is a compelling reason not to. Cloud is great, for example, for experimenting with new technologies and services and developing them quickly, he said. But 60% to 70% of its infrastructure on premises means that questions about whether the cloud can offer the processing speed New Balance needs to move huge volumes of information around the globe are often compelling enough to keep many projects running in its data centers.

The reality check on the cloud buzz spurred some commentary among the CIOs, IT directors and other tech leaders at the Boston Marriott Newton, where the conference was held, many no doubt inundated in recent years by proclamations of cloud as the future of enterprise computing.

It caused at least one attendee, who was at a panel discussion about becoming a business technologist -- an IT exec who uses technology in a strategic way for business purposes -- to question basic truths, albeit jokingly.

"It's like saying I'm not American," he said, to hearty laughter.

CompTIA released a survey this week showing that fewer organizations are running cloud-based email, analytics, collaboration and other applications. But rather than reflecting a waning interest in cloud, the report shows that people are getting more of a handle on what cloud computing is, the industry trade group said.

"This refined understanding has led to a rebalancing of self-assessment around cloud activity," CompTIA wrote in the report.

Ratio analysis

Jon Burt, vice president of IT at Vinfen, said it was interesting to hear a push against "what you hear as the hype or common wisdom of 'Go to the cloud, go to the cloud, go to the cloud.'"

Vinfen is a Cambridge, Mass., nonprofit that offers assistive home services for people with disabilities in Massachusetts and Connecticut. It can be counted among the droves of organizations seeking benefits promised by the cloud such as lower overhead costs and the ability to quickly scale computing capacity up or down in response to business demand. Vinfen is funded by state money and has a low operating budget, so moving some applications to the cloud makes sense, since there's nothing to build.

The organization uses cloud software for its human resources information system, has its enterprise resource planning system on a multi-tenant, private cloud infrastructure, and it is implementing a single-tenant private cloud -- essentially dedicated servers in a cloud provider's data center -- for its electronic health records.

But Vinfen has about 75% to 80% of its IT operations on premises, including its analytics tools and data warehouse. Burt doesn't see that share losing much to cloud in the near future "because the core of our business is our data." In the cloud, it's often harder to consolidate and analyze data, because there isn't always direct access to it on the back end, he said. 

Performance issues

Vinfen doesn't need APIs to connect its databases to the cloud and carry information back and forth, Burt said, so he's not worried about the types of slowdowns that terrify transactional businesses -- retailers like New Balance, for example. But he said he could see other situations in which performance in the cloud could become a problem.

"If there is a challenge to get to my data, I'll be running away from the cloud as fast as I can," he said. "If I can continue to get at my data in an efficient fashion, then I'll be more willing to look at it."

Another thing motivating Burt to keep a majority of Vinfen's IT operations on the ground: fear of somebody getting at sensitive information flowing over the internet to the cloud. He cited the recent spate of data breaches at healthcare facilities.

"I'm not going to be the guy on the other side of one of those saying, 'Yes, I screwed that up,'" he said. "The risk-reward scenario doesn't add up."

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