Cost Reduction Only Tip of Cloud Iceberg

Ann All
Slide Show

The Impact of Cloud Computing

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

Many months ago, in an article I wrote on cloud computing, I cited a statement from observer and technology enfant terrible Nicholas Carr that succinctly summed up my own thoughts about the cloud, that its economic advantages would seem relatively insignificant when compared to its ability to transform how companies do business. From a 2009 post on his Rough Type blog, Carr wrote: "... The cloud in the end will be more interesting for the new models of computing it opens up rather than for its ability to accommodate the old ones."


I also thought IT Business Edge contributor Mike Vizard was really on to something in his post on cloud computing's possible impact on business process outsourcing, noting there were plenty of business processes that could be delivered as a shared service rather than hiring a dedicated staff to perform those functions. As he wrote:

Cloud computing creates a framework that, when coupled with virtualization and higher levels of IT process automation, will make it a whole lot easier to not only dynamically move application workloads, but entire business processes to drive what some will surely dub BPO 2.0.

Now a year-and-a-half later, Indian outsourcing giant Infosys is introducing Infosys Edge, a series of cloud-based platforms that address specific business processes. (Incidentally and perhaps coincidentally, the company a few months ago dropped "Technologies" from its name. Or maybe not so coincidentally. According to a news release, the "change in name accurately reflects the role Infosys now plays in addressing a broader canvas of business challenges in addition to the ones focused on technology.")


As Samson David, VP and global head for business platforms at Infosys, told Mike, the company wants to help its clients solve business problems rather than simply helping them lower their costs. (Of course, leveraging the cloud may help them lower their costs as well.) Writes Mike:

While it's too early to say what impact cloud computing will ultimately have on business or IT, it's clear that we're starting to scratch the surface of what is possible in the cloud. The question that still needs to be answered in the meantime is to what degree do companies really want to leverage discrete sets of processes that they would then have to orchestrate, versus trying to create some sort of competitive advantage by building those services themselves? Chances are that over time more companies are going to bet on the former rather than the latter simply because every time they reinvent a wheel, more often than not, they are just slowing their time to market.

I tend to agree, largely because as I pointed out in a post about software-as-a-service ERP I think many companies view their business processes in the same way many parents view their kids, as a little more special than they really are.


I'm sure this move is also intended to position Infosys as a services provider that can offer its clients business benefits beyond cost reduction. It's a smart strategy, given that many outsourcing clients seem unhappy with their outsourcing partner's ability to help them uncover new and more creative ways of attaining business value.

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Add Comment      Leave a comment on this blog post
Nov 30, 2012 4:48 AM calverta calverta  says:
Tough times in business may lead you to research and implement cost-cutting strategies. Businesses have several options in reducing the costs of the business without sacrificing the quality of its service. Focus your efforts on the products and services that are most profitable and cut out the products and services that are not returning as high a profit to your business. Reply

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