Service providers and consumers get it- Cloud computing is not about cost savings
Uptime Institute recently completed its second annual datacenter industry survey, which collected data around major datacenter industry trends and attitudes. While survey validates that growth in cloud computing grows (compared to 2011, 10% more respondents said they planned to push workloads to the cloud), it also shows cost efficiency is increasingly seen as number 1 reason for adapting cloud (far more respondents said cloud computing will save them money).
To me this shows couple of things: 1. Majority of respondents were facility and IT managers and thus they don’t necessarily see the value from a better user experience or have the level of strategic intention such as growing the company or opening doors to new businesses 2. Cloud computing for enterprises is still widely adapted as another cost efficiency initiative and more importantly and worrisome is that sourcing decisions around public cloud will be based on the pricing vs. SLAs, operational flexibility, security and other factors that need to be taken into account.
I believe it is really imperative to look at 2 main groups benefiting from cloud not necessarily for cost efficiency. They will play key roles in cloud and business innovation. First one is the end users and consumers. They will only put more pressure on cloud service providers for better, simplified, personalized cloud experience. Second group is the traditional service providers like IT outsourcing companies, NSPs, (network service providers) and Telcos. They are investing heavily to adapt their people, process and technology because they are betting their future and business model on cloud. Cloud innovation will continue with the push from these two groups.
HP consultants that have been working closely with service providers see the strategic value of the cloud computing to these organizations. Cloud conversation turns into business of technology conversation quickly and cloud becomes just of the many other alternative sourcing options. For example Switzerland’s top IT service provider ‘Swisscom IT Services (SITS)’ plans its transition from traditional outsourcing into an innovative hybrid service business that accommodates cloud delivery models. While clear IT improvements were made, starting objective of the transformational project was around establishing vision and action plan to evolve operations—people, processes and technologies—from a traditional outsourcing model into an orchestrator and provider of IT services for external customers. You can read more about this case study and how HP experts worked closely with SITS at the planning stage: www.hp.com/services/cloud
Hande Sahin-Bacheci has been with HP for over 10 years and held key global consulting business and marketing roles. Currently, she is the WW marketing lead for Cloud and Converged Infrastructure Consulting Services for HP Technology Services.
