Small and medium sized business is buying resources for both private and public Cloud efforts: hiring staff and consultants, as well as buying and subscribing to Cloud technology. The budget-line items are growing rapidly for Cloud-related technology and services, and this will increase significantly going forward.
How important is Cloud computing? I would argue that it’s a sea change—a deep and permanent shift in how computing power is generated and consumed. It’s as inevitable and irreversible as the shift from steam to electric power in manufacturing, which was gaining momentum in America about a century ago. And just as that transition brought many benefits and opened up new possibilities to factory owners, so too will the Cloud confer advantages on its adopters.
The problems come when IT tries to define the business case for Cloud computing along with its request for funding. Companies shouldn’t give such people too much influence over plans to move into the Cloud; that would be like putting the crew that ran the boiler and steam turbine in charge of electrifying a factory. The CEO and other senior business executives need to take responsibility for bringing their organizations into the era of Cloud computing.
Generally speaking, people in IT are still very unsophisticated with their thinking around the use of Cloud-based technology and its true benefit to the business.
Perhaps it’s the focus on operational expenses (OPEX) versus capital expenses (CAPEX) that hinders the business case for Cloud computing. The use of Cloud-based resources, especially public Cloud-based resources, may reduce CAPEX costs over time in many organizations, if the hardware has been recently purchased and paid for. But there are areas where avoiding CAPEX does not have its expected value, so the movement to the Cloud won’t be cost-effective if you consider this one dimension.
The true value of cloud computing — or any technology, for that matter — is its ability to make the business function in ways that can maximize its growth and value. This means allowing the business to move in new and innovative directions to capture new markets or to keep up with the market by growing as quickly as the market will allow.
For this to work, you need to use technology in agile and scalable ways. Typically, you can’t do that with the existing set of technologies and approaches you use today. A change is required that will better support the business, which is why you are — or should be — looking at Cloud computing. That’s the
The ability to get the true value of Cloud computing means thinking a bit more strategically than IT is used to doing. IT’s ability to effectively support the business is the main objective. If you only look to save a few dollars by avoiding hardware and software costs, you’re missing the big picture.