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Why is Cloud Computing Relevant to your Business?

Most IT Analysts and technologists talk about Cloud Computing as the next wave of technology, and they focus on the disruptive nature of this technology to traditional IT organizations. I believe that while this belief is accurate, it is not a complete view of Cloud Computing. To illustrate my point let us take a look at the National Institute of Standards and Technologies’ (NIST) definition of Cloud Computing. This definition lists 5 essential characteristics of cloud computing:

  1. On-demand self-service Cloud 1.jpg
  2. Broad network access
  3. Resource pooling
  4. Rapid elasticity or expansion
  5. Measured service.

It also lists 4 "deployment models" (private, community, public and hybrid) that together categorize ways to deliver cloud services and 3 “service models” (infrastructure, platform and software) for how Cloud Services can be consumed. While this is the most comprehensive definition of Cloud Computing, there is no mention of why this is relevant to any business beyond their IT departments.

 

Cloud Computing is a business trend and not just an IT trend. In fact the underlying concepts of the Cloud are not new or revolutionary in terms of technology. The technology underpinnings of the Cloud such as standardization, virtualization and automated provisioning have been the goal posts for many IT organizations for the past 2 decades.

 

What has changed over the last few years has been the near universal business adoption of Internet technologies and the evolution of a truly ubiquitous global marketplace enabled by the exponential impact of Moore’s law and Metcalf’s law. This global marketplace is characterized by fast emerging and rapidly growing global competitors who are taking advantage of these trends to reconfigure or redefine their value chains to disrupt traditional markets and radically change how business is conducted today.

 

In order to compete effectively in this marketplace, today’s enterprises need to look at innovative business models, respond rapidly to emerging competitive threats, improve the speed at which these models can be brought to the marketplace, deal with regulatory, security and privacy threats in an increasingly connected global marketplace and do all of these at a price that provides value to their customers and stakeholders.    

 

In short my contention is that Cloud Computing is a business imperative that today’s businesses should use to compete and grow successfully in our hyper-competitive global marketplace. Here is how I would recast what Cloud Computing means to any business:   

 

 

 

Today’s successful businesses can sense and respond to changes in the global competitive landscape via the following actions:

  •  Leveraging the lower barriers to entry (through measured access that minimizes the need for capital intensive investments, resource pooling and broad network access across geographies)
  • Ease of access to global resources (through on demand self service and broad network access)
  • Using resources to drive technology enabled innovation (enabled by Broad network access to global resources, measured access and on demand self service)
  • The ability to rapidly scale up or ramp down investments (through rapid elasticity, measured access and on demand self service) to test these ideas in the marketplace and scale up successful strategies and exit others that do not work

 

In future blog posts, I will build on this business definition and show you how businesses can build, deploy and rapidly reconfigure their value chains to respond quickly to competitive opportunities or threats in the global marketplace.

 

How is your organization using cloud computing today to compete in our global marketplace? What successes have you experienced so far?

 

To learn more about how HP is helping clients with cloud computing, visit these resources:

 

Comments
Nadhan | ‎05-03-2012 03:38 PM

Srini, Really like the way that you have brought out the business dimension to the Cloud which as you point out tends to be viewed more as an IT trend.

 

Also fully agree with your observation that the underlying concepts of the Cloud are not new or revolutionary in terms of technology. In fact, I would assert that SOA principles are a solid foundation for the evolution of the Cloud as I outline in my post on Top 5 tell-tale signs of SOA evolving to the Cloud

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