At this point, it doesn’t make much sense to talk about whether IT infrastructure will change in the cloud, or even how it will change, but how data and business processes will change to suit the new reality.
Infrastructure, after all, is merely a means to an end, so the real measure of the cloud is how it will alter the things we do, not the resources we use to do them.
We are already seeing this effect in motion. Traditional applications like BI and CRM are not being ported directly to the cloud anymore, they are being recoded to suit the dynamic, resource-shifting realities that cloud computing brings to the table. At the same time, entirely new business processes are emerging to take advantage of new service- and application-layer flexibility to out-perform their legacy counterparts.
According to IDC, the cloud currently accounts for about a third of IT spending and is on pace to hit nearly half by 2019. This represents a yearly revenue jump from $32.8 billion to more than $54 billion, an annual gain of about 15.5 percent, while at the same time traditional IT infrastructure spending will decline by 1.7 percent per year. The public cloud is due to grow at a slightly faster pace than private clouds during this period – 16.6 percent CAGR vs. 13.8 percent – but this will have a significant impact on the revenue split by the end of the decade, with public providers shelling out $34.4 billion compared to less than $20 billion for private deployments.
But raw numbers don’t tell the real story here. To understand what’s really going on, we have to look at actual cloud deployments and the rationales behind them. A key case study is cosmetics company Avon Products, which recently tapped HPE to convert its legacy infrastructure into a hybrid cloud. The company had attempted to implement a new SAP platform but quickly realized that it would not provide the functionality needed to compete in the 21st Century economy. Note that with a standard infrastructure and software upgrade, Avon would have made improvements to its existing processes, but with a hybrid cloud the goal is to remake those processes from the ground up.
The desire to reinvent yourself in the cloud rather than just improve the status quo is starting to emerge on the myriad cloud-facing platforms governing things like ecommerce. At last week’s National Retail Federation confab in New York City, a company called Demandware showcased its Enterprise Cloud Platform for Unified Commerce that reimagines both online and offline sales processes to deliver a cohesive, brand-centric customer experience. The platform is already allowing retailers like Sperry to enable high degrees of footware customization and new capabilities in omnichannel shopping and in-store experience-building for companies like Tourneau and NYX Cosmetics.
Despite all these heady advances, the enterprise should remember that too much change too quickly can produce its own sets of problems. As Forbes’ Joe McKendrick points out, most organizations are already dealing with multiple clouds, and without an integrated framework to bring them all together this could result in the same silo-based infrastructure that inhibits current business processes. A recent study by Beagle Research shows that most IT departments are already overtaxed trying to meet the demands of multiple cloud deployments, representing a single point of failure before the enterprise begins to address the process-changing opportunities the cloud presents. In fact, most organizations quickly realize that the cloud rarely solves problems for legacy applications, thus driving the need for new cloud-facing applications that also tend to reformulate the business processes they support.
So in the end, we are not talking about moving the enterprise to the cloud or using the cloud to make things better, faster or more efficient, but reinventing the entire business process from product design and development to distribution and sales to service, support and customer retention.
It’s not just a new way to do IT. It’s a new way to conduct business.
Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.