Cloud computing is being widely touted as the next big thing in supply chain information technology, but I have strong doubts about its ability to deliver what everyone is hoping for without creating additional problems for electronics manufacturers.
Let's face it: These days, Internet security is as much an oxymoron as "government intelligence." Within the US, hackers have penetrated ultra-high security systems, including those at the Pentagon and defense contractor Lockheed Martin, while internationally, major incidences have been reported in the Iranian nuclear development program, the United Kingdom’s 2011 Census, and the International Monetary Fund. I can't imagine there are many sites with more layers of security or tighter loss-prevention measures than these, yet they were compromised.
Despite these high-profile events, attempts to extol the virtues of the cloud continue. These arguments include eliminating costly software expenses, avoiding the expense and hassle of software updates and maintenance, and the ability to access programs and files from any system anywhere in the world. (See: Are We Ready for Cloud Manufacturing?)
None of these benefits can be disputed, but are they enough to counter the very real threat of cybersabotage? Electronics companies have spent years and millions of dollars establishing their supply chains as strategic competitive differentiators. I believe this IP should be just as closely guarded as the specs for a revolutionary new chip design. I can't imagine that companies like Intel Corp. (Nasdaq: INTC) or Advanced Micro Devices Inc. (AMD) (NYSE: AMD) keep their product development blueprints in the cloud. Maybe they do, but I doubt it.
Maybe I am just paranoid, but to me, putting confidential and strategic supply chain information on a hosted server network is like leaving the keys in a brand new Ferrari. You might as well just put up a sign that says "Steal Me," because you know that these networks are going to be prime targets for hackers.
And while I have no doubt that no expense will be spared to try to secure these networks, I also have no doubt that before long, hackers will find their way around them. Look at the sophistication and scope of the measures taken by electronic component counterfeiters. The sad reality is, today's bad guys are smart.
Don't get me wrong: I am a huge fan of technology, and as a writer and journalist, the Internet has become an essential part of my toolkit. However, I truly believe that there is a point where the benefits of convenience and productivity are far outweighed by the risks. Taking supply chain technology to the cloud crosses that line.
So, I would caution members of the electronics supply chain to carefully consider this move. Remember what they say in Vegas -- don't bet what you can't afford to lose.