In the last Industry Insight, I looked at the risks of cloud computing, including potential ones and those that have already happened. Now I look at why the trend for cloud computing is not expected to cool off any time soon.
This specifically addresses the advantages of external cloud solutions, rather than the more complex situation for private, internal cloud adoption.
One might say that IT really comes down to providing three benefits that no company or even public sector organisation can afford to ignore: improved efficiency, enhanced productivity and reduced costs.
Cloud solutions and cloud services not only have the potential to offer all of these in a single package, they also provide these benefits on the basis of on-demand usage and billing. This gives better flexibility for dealing with changing business needs, which is what agile business is all about.
An ideal world
Obviously, this is in an 'ideal' scenario, where risk factors have been eliminated or are well managed, and the essential nature of the organisation is such that cloud solutions will enhance its business processes, not just replace older but still workable systems.
Let's look at the benefits individually.
More efficient businesses deliver results to their customers faster.
Andrea Lodolo is CTO of CA Southern Africa.
Efficiency is important because it provides better service delivery and a competitive advantage. Time is the key variable here. More efficient businesses deliver results to their customers faster. The goal is to achieve this with fewer resources, whether those are people or systems.
A well-designed cloud solution can improve efficiency overall and should be easier to manage. A consolidated cloud system would reduce the amount of resources needed to run those systems.
Productivity is a parallel issue. There is the obvious advantage that a business that produces more - and faster - can stay ahead of its competition. This applies to both products and services. It is also true that the typical company spends more on its staff than on any other item. That investment delivers better value if the staff are more productive.
An external cloud solution will typically reduce internal IT management overheads. In many cases, it would also involve simplifying and rationalising systems and applications so that all users within the business would be working with the same application versions. This is a productivity improvement when compared to surprisingly common situations, where different branches and departments might have different versions of the productivity tools and applications, resulting in wasting time resolving compatibility issues.
But wait, there's more
While both efficiency and productivity bring inherent cost savings to the business, further cost savings can come with cloud computing in two ways.
Firstly, the overall package is typically more affordable than using in-house solutions, admittedly depending on the licensing models employed. Secondly, a cloud solution can largely be organised around on-demand services so that there is less need for expensive software and hardware to sit idle until the moments when it is really needed to run at full capacity. With the cloud, users have the option to pay only for what they use.
The common selling point for the cloud is that it changes capital expenditure to operational expenditure. This isn't just moving figures around on the balance sheet. A combination of reduced expenses on in-house software and hardware - and the IT staff overhead that requires - augmented by the on-demand billing model for cloud solutions, really can reduce costs overall.
Another benefit and saving - that is not easily documented in the financial results - is the matter of flexible business processes and agile business.
Technology in general supports these goals, but cloud services offer to provide one of the most flexible answers to that challenge, both in terms of what they can do and what that will cost. This flexibility is available to customers of all sizes, from SME to enterprise level.
These are some of the reasons why cloud computing is a compelling offering for almost any business. These are the reasons why it has already seen widespread adoption.
But, as I noted earlier, this is the ideal scenario.
In the real world, cloud computing has many of the same issues as traditional internal networks: integration, management, change management and so on. It is, after all, still client/server architecture, although the server is now connected via the Internet and probably belongs to someone else. And all IT systems are used and run by people, which bring another set of risks and challenges.
There are basic steps that need to be taken to support a successful outcome.
Planning is paramount. This depends on a thorough analysis of what assets the business has in terms of systems, applications and critical business processes. There needs to be realistic risk management to work out which of these assets can benefit from moving to the cloud without tempting fate or just moving for the sake of moving.
The last part is the selection of a reliable service provider for the cloud solution and detailed examination of what their SLA really covers.
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