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Michael Vizard
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The Impact of Cloud Computing

The primary driver for cloud computing adoption is shifting from costs to agility.

Most of the conversations about cloud computing generally start with the concept of controlling IT costs. Whether that's via a public or private cloud, the major driver behind cloud computing thus far has been a desire to make more efficient use of enterprise IT resources.


However, while reducing cost is still important, a new survey of 417 people who work for either IT organizations or vendors that was conducted by North Bridge Venture Partners, a venture capital firm, suggests that the primary reason that customers are more aggressively investigating cloud computing these days is agility.


Michael Skok, general partner of North Bridge Venture Partners, says this IT agility issue will not be the only primary driver of cloud computing in the years ahead and it's likely to change the competitive landscape across any number of vertical industries.


Large organizations are especially vulnerable, says Skok, because they rely on many business processes that are tied to legacy IT architectures that inevitably will be delivered more effectively as a service. In some cases, that service may be delivered by an internal IT department, but more often than not, those services are going to come from external providers that have chosen to specialize in a particular application area. The reason for that, says Skok, is that most businesses going forward are only going to want to internally run applications that are core to the business. The reality of the current enterprise IT environment is that more than 80 percent of the applications installed are not core to the business, which makes them prime candidates to be delivered as a service. Unfortunately, a lot of companies will soon find themselves being victimized by more nimble rivals that leverage new processes enabled by cloud computing.


But for all of this to happen, Skok concedes there are storm clouds ahead concerning interoperability, security and compliance. The issue that might prove most troublesome is interoperability, which vendors have been notoriously slow to embrace. And yet without it, Skok notes there can be no true sense of the word "service" when it comes to the delivery of IT. If customers can't switch providers, then what is being delivered is not really a service, says Skok.


As far as the impact of cloud computing on the IT department itself, the survey makes it clear that no one is quite sure what will happen. There are just as many who think cloud computing will make IT more difficult to manage as there are who don't. Similarly, opinions concerning whether there will be a need for more or less IT people in the future are all over the map.



What is for certain is that while cloud computing may represent a natural evolution in terms of how IT is delivered, the business implications of that event are likely to be a whole lot more profound once business executives start to appreciate the new art of IT processes.



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