THE ACADEMY OF BUSINESS STRATEGY
CLOUD COMPUTING BLOG
A disruptive, evolving, technology
Michael O’Toole (CBS) DMS BA
With cloud computing’s promises of improvements in TCO and ROI through faster deployment, cost savings, and potential to rapidly exploit opportunity is it any wonder interest has soared? The shift from a CAPEX to OPEX model enabled businesses to try out cloud services, often with little cost. Amazon Web Services (AWS) changed the cloud computing landscape following its inception in 2006. Major industry players, including Microsoft, IBM, and Oracle, are positioning industrial offerings to attract customers onto the cloud. Aside from risks and complexity associated with third-party policies, processes, and procedures, the changing CSP (Cloud Service Provider) landscape adds uncertainty. How can organizations exploit cloud computing, maintain a coherent IT strategy, manage risks, and adhere to governance requirements?
Cloud computing is, of course, industry jargon which refers to distributed computing, over a network (commonly the Internet), through adoption of cloud delivery models (private, public, hybrid). Services are provided through SaaS (software-as-a-service), PaaS (platform-as-a-service) and, IaaS (infrastructure-as-a-service). More on these later – but for now, if you’ve used Google Docs, you’ve used both public cloud and SaaS. If you’re thinking its nothing new, to a certain extent you are correct. Consider why you might use your own e-mail system when Outlook is available, and you begin to address one fundamental consideration – build or buy. Regulatory issues aside, economies of scale in utility supply (e.g. gas, electric) make a buy decision a foregone conclusion for most. Cloud is about shared services, a subscription-based pay-per-use model of consumption, and increasingly, utility computing.
The cloud itself is a delivery model, and enabling technology, for social media, big data and analytics, e-business, instrumentation, healthcare, mobile, and other social ecosystems. Cost saving is a tangible benefit, often seen at early stages in cloud adoption, with innovation following thereafter. This is important, because business needs to create value – cost reduction alone results in limited outcomes. Increased revenues are also cited as agile organizations quickly exploit opportunities. Smaller organizations have achieved ready gains in these areas, whereas larger organizations with legacy systems and complex IT estates face greater challenges. Energy might be a minor factor today, but to what extent are environmental actions part of your core business rather than compliance? Whilst a reduced carbon footprint is already a green business imperative, market analyst Forrester Research has claimed the future cost of energy will invalidate current operating models.
A cloud first approach involves evaluating cloud before committing investment to more traditional solutions. In terms of cloud strategy, its increasingly a case of when, where, and how. Yet organizations must avoid a me too approach, and consider how cloud can provide freedom to manage the business. In terms of early adoption, collaboration services, and video-conferencing provide easy routes to cloud experience. BYOD (bring-your-own device) and remote access are also driving adoption, and this ‘consumer’ shift will further change the cloud landscape, particularly as users in emerging markets go online.
The much heralded opportunity to modernize IT estate isn’t as simple as implied and often results in tactical use of cloud, while the ‘core business’ itself remains off cloud. There is also need for a fresh outlook, and smarter processes, with the shift from traditional IT environments, based on inefficient asset ownership, to agile rentals. As cloud services mature and businesses evolve, there are implications for the value chain, particularly as CSP’s become embedded. The requisite intelligence for, and control of, operating efficiencies, security, and risk management will be complex until standards emerge. Similarly, with cloud content being omnipresent, concerns around data security, privacy, and sovereignty persist. Vendor strategies for entering the cloud gold rush range from me too, to native cloud, with Salesforce a good example of a native cloud application (NCA) – i.e. designed for the cloud.
A focus on outcomes requires organizational changes, particularly in terms of relationships across the internal organization, and externally, e.g. getting closer to the customer. Cloud can support organizational transformation through agile on-demand delivery of IT solutions. As cloud technology evolves, organizations will need to envisage new business scenarios and increase innovation. The resulting social aspects of work need support from enabling technologies (e.g. social media) and ongoing success with delivery requires metrics, a basis for continuing improvement, and a need to orchestrate communities. Such cultural changes are a significant challenge, as people and processes are harder to change than technology itself.
The cloud focus is service first rather than being technology-led. Cloud needs evaluation in terms of potential improvements in organizational agility, responsiveness, and business transformation. The move to opportunity management (exploitation of positive risk) requires empowerment across the organization. Will cloud rapidly develop unimpeded and dominate the IT and business landscape? Or will it follow a different path as did the paperless office?
Cloud computing is a big subject. In this introductory article we can only touch on some current concerns. In future articles I will be addressing cloud strategies, technology briefs, market developments, and sector-specific topics. Can you think beyond current limitations to new ways of working in your cloud future?
ABOUT THE AUTHOR
Michael O’Toole (CBS) DMS BA is an approved Certified Business Specialist (CBS) with the Academy of Business Strategy and his specialist subject is cloud computing. He has achieved a DMS from Henley Management College and a BA from The Open University. He has been employed as an Advisor, Project Manager, Director, Operations Manager and Consultant for various companies and has experience within the financial services, manufacturing and telecommunications industries. His clients or employers have included FQMS, Project Logic, Stratos Consulting, YPSL, Worldcom, STFS, DFCL, General Electric, ICL and Automatic Data Processing (ADP). He has geographical working experience in Japan, Hong Kong and Switzerland. He speaks English, Japanese, French and German. His service skills incorporate project management, training and cloud computing.