How Cloud Computing Levels the Business Playing Field

Michael Vizard
Slide Show

Just How Strategic is the Cloud?

Most see cloud computing as a strategic move, but security is still a prime concern.

For much of the past year, the discussion surrounding cloud computing has been centered on its impact on IT. Most of those discussions have focused on how cloud computing can cut IT costs while at the same time herald in a new era of agility in IT operations.


As important as those developments are, the more profound impact that cloud computing will have on the way we conduct business will start to become apparent in 2011.


A fundamental element of cloud computing is the concept of a "virtual data center" in which a company can essentially replicate their entire private data center on top of a set of virtual machines. The machines run on shared IT infrastructure that is managed by a third-party service provider.


If you take that concept to its next logical conclusion, it won't be long before we see entire business processes running on top of these virtual data centers. That means that rather than having to acquire and configure a lot of physical IT infrastructure to support a business process, in the not too distant future, business people will request IT services via a self-service portal that will be managed by IT or a third-party provider.


It won't be too long, however, before business folks will not only be able to request an IT service through those portals, but they will be able to stitch together entire sets of pre-fabricated business logic to create a business process. For example, rather than building an entire cash-to-order system from scratch, it won't be too long before we see such a platform made available as a cloud computing service.


When a business person decides they want to construct a business process, more often than not, all they need to do is interconnect a series of prefabricated business processes in the cloud. In effect, what cloud computing will really enable is the next evolution of business process outsourcing.



David Gee, vice president of worldwide marketing for HP Enterprise Services, says the resulting impact of cloud computing on business will be profound in two ways. The first is that the ability for small companies to compete with larger rivals will be greatly enhanced. The barriers to entry in any given business sector will be substantially less because the cost of the IT investment needed to support that business is going to drop sharply. And with a drop in the real cost of IT, we'll see a lot more startup companies spring up to challenge established business rivals in 2011 and beyond.


The second big impact, says Gee, will be in terms of globalization. Businesses around the globe will find it much easier to offer services beyond their borders. In fact, businesses in major markets are going to find themselves competing more with companies in emerging markets that will be leveraging cloud computing services to compete more effectively.


In the same way that many countries skipped building out expensive telecommunications infrastructure in favor of relying on wireless services, many businesses in those countries will skip making capital investments in expensive IT infrastructure in favor of using established cloud computing services.

 

On the eve of 2011 it's becoming a lot clearer to see how cloud computing is not just an IT issue; it's a major business issue. How companies around the globe respond to the advent of cloud computing is going to determine the competitive landscape for businesses, large and small, for years to come.



Add Comment      Leave a comment on this blog post
Dec 14, 2010 12:59 PM Nate Odell Nate Odell  says:

Great article and I completely agree. At Skytap, we think cloud automation can change the way businesses of all sizes can utilize scalable, efficient cloud computing resources.  Companies need  a self-service Web UI,  enterprise grade security and policy control, and the flexibility to be used for different types of workloads such as test/dev, training or sales demos. Having accessibility and tools like Skytap does level the playing field. Check us out by signing up for a trial. goo.gl/DTSWp

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