(This post first appeared on “Cloud Musings on Forbes”. This series provides the content of a whitepaper I recently authored. A copy of the complete whitepaper is available at NJVC.com starting September 7, 2011.)
Cloud computing is a new approach in the provisioning and consumption of information technology (IT). While technology is a crucial component, the real value of cloud computing lies in its ability to enable new capabilities or in the execution of current capabilities in more efficient and effective ways.
Although the current hype around cloud computing has focused on expected cost savings, the true value is really found in the mission and business enhancements these techniques can provide. When properly deployed, the cloud computing model provides greatly enhanced mission and business capability without a commensurate increase in resource (time, people or money) expenditures.
Cloud Computing: Changing the Game
The use of commodity components, coupled with highly automated controls, enable cloud computing.1 These characteristics also enable the economic model that makes it so disruptive to the status quo. As an example, the software-as-a-service cloud delivery model typically does not require any advance usage commitment or long-term contractual arrangements. SaaS not only changes the typical software vendor business model, but also radically changes the strategy, budgeting, buying and management options for the buyer. When Salesforce.com proved the viability of SaaS, the software subscription model was instantly endangered as a profitable business model. Amazon Web Services is similarly attacking data center hosting with its Virtual Private Datacenter Infrastructure as a Service (IaaS) offering.
Looking at this phenomenon from another angle, different cloud computing deployment models are actually changing what it means to be an IT professional. Since the days of the first computer, IT workers have prided themselves in their ability to design, build, operate and fix the enterprise hardware and software components that comprise the IT lifeblood of organizations—both in the public and private sectors. These tightly knit teams worked hard to keep these custom-made platforms updated, patched and ready to meet daily business and mission requirements. In the cloud computing world, IT infrastructure that is not delivering differentiating value is viewed as worthless cost. Critical business applications like email, Customer Resource Management (CRM), Human Resource Management and Enterprise Resource Planning are being routed to more capable cloud providers of these same services. This transition puts the enterprise IT professional into a service management role, responsible for helping his or her internal customers better use externally provided IT services. The new enterprise IT department is more a services organization than the traditional delivery organization.
The new cloud economic model also radically changes the view of what’s actually possible. Traditional IT procurement and provisioning processes have historically driven timelines associated with the delivery or fielding of improved information and data processing capabilities. Multiple threads of development, test, training and maintenance can also tax an organization’s short- and long-term financial resources. IaaS and Platform as a Service options can not only eliminate or limit capital expenditures, but can reduce or eliminate the expectation of operations and sustainment costs. The time required to realize mission or business value also is substantially reduced. With these differences, the impossible can suddenly become not only possible, but often can lead to new mission capabilities or brand-new cloud-enabled, revenue-generating businesses.
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Cloud hosting has gained a stronger standing in the cloud computing world thanks to the active participation of enterprises in recent years. The cloud’s success lies in its potential to significantly impact IT costs through direct costs savings, save time in development and deployment, and to save resource allocation overheads.
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