As Cloud services mature to the point that CIOs can trust at least some mission-critical applications to the Cloud, choosing the right applications to move out-of-house is a critical decision, writes Consultant, Wikibon Analyst and former college CEO Scott Lowe. The Cloud can provide some important advantages, but it has weaknesses as well, particularly in the area of integration with other applications. In his Alert, “CIOs: What Should You Keep on Premises vs. the Cloud”, the third in his series on Cloud computing issues for CIOs, Lowe looks at several central business applications, considers the pros and cons of moving them to the Cloud, and comes to definite conclusions.

He starts with ERP. The major issue here is that ERP systems are often the “heart and brain” of the organization and are tightly integrated with other central IT services that depend on access to their data. As a result, he recommends keeping ERP in house if you have the staff to support it. Otherwise, host it with a managed services provider, not in the Cloud.

E-mail is a more nuanced issue. It is mission-critical — businesses can grind to a standstill if the e-mail system goes down. And the same integration problems can apply in organizations where the e-mail system is tightly integrated with the surrounding environment. On the other hand, for Exchange users in particular, Microsoft offers a very nice service with tools to facilitate easy migration in Office 365. He recommends that highly centralized companies with limited Internet bandwidth keep their e-mail in house but Exchange users supporting a geographically dispersed work force, and particularly those with a lot of work-from-home and contractual employees, and that do not have a lot of custom services attached to their Exchange services, seriously consider Office 365.

Web sites are primarily a public-facing service for most companies — their internal needs are usually met by portals and intranets. Again the degree of integration to other services, including ERP for companies that use their Web sites as store-fronts, is an important consideration. On the other hand, he writes, moving the Web site to a service provider isolates it from a disaster in the data center. As a former college CIO, he knows that during emergency situations the Web site becomes a critical communications interface for parents and students, even when campus facilities may be unusable. His verdict, “host it or put it in the cloud.”

Finally, identity management and authentication is a very sensitive application for many companies. For one thing, it holds “the keys to the kingdom”. For another, vital services, including automatic locks on doors to sensitive areas, depend on continuous access to authentication. He strongly recommends keeping them in house with hooks to any cloud or hosted services as necessary, such as Office 365.

The full Alert, like all Wikibon research, is available free of charge on the Wikibon Web site. IT professionals are invited to register for free membership in the Wikibon community. This allows them to comment on research and post their own tips, questions, Professional Alerts, and white papers. Membership also comes with invitations to the periodic Wikibon Peer Incite meetings, at which your peers discuss how they use advanced technologies to solve business and IT technical problems.