The following questions delineate whether customers are purchasing true cloud services or traditional software posing as a "hosted" service.
To tell the difference, customers should ask:
If customers must buy software up front, they don't receive the benefits of a subscription model and aren't purchasing cloud computing. With large, up-front sunken costs, they don't have flexibility to switch vendors if they are unhappy. Having already paid nearly all fees, they are locked into long-term commitments with vendors who are typically less responsive.
To expose cloud imitators, customers should ask if they can have a ten-year payment period that's cancelable at any time with no penalty. If not, they aren't doing business with a bona fide cloud vendor.
If customers are on their own servers, they lose the benefits of shared infrastructure.
They don't experience the reliability of highly available cloud computing. Also, when imitators maintain one server per customer, upgrades are typically performed yearly. In the Cloud, patches and improvements are made frequently and simultaneously for all systems.
Customers are put at risk by trusting vendors who have third-party companies host systems. They should be wary of a lack of commitment by the software vendors unwilling to own and manage the infrastructure. They haven't devoted the resources to developing cloud-computing expertise. Moreover, they may not think the business is valuable enough to run themselves. This should be a clear signal of suspect service quality.
Including a third party also causes communication problems. When issues arise, customers will need to determine who to call. If there's a performance problem, do they call the software vendor or hosting provider? Introducing a third party into the relationship delays troubleshooting and jeopardizes performance. With no single "neck to grab," problems are harder to resolve and customers are more vulnerable.