Cloud – What the hype is all about

So you must have heard about the Cloud by now. You must have heard about it as a new happening phenomenon that is going to change the IT world. I would agree that it is going to have a significant impact on the existing business models in the IT industry. However it would only change our lives for good if we adapt to it quickly. Those who fear change and resist it at times tend to lose their edge because they fail to adapt to the ever changing world.

There are so many examples of companies from 8Os that do not exist anymore. Those that exist and have thrived changed as the world and specially the consumer was changing. Studies by Gartner and Forrester suggest the same about Cloud. These studies are available for review incase some of you want to get some stats on the Cloud future. The way i look at it is alot simpler than the complex studies conducted by these research organizations. As far as i am concerned its the consumer expectation that governs how the businesses run. IT consumers have started to question their IT spendings and they are tired of spending more on IT than on operations. At the end of the day the goal of every business is to make profit and continuous cost of IT infrastructure and services is something that never flies with CFOs. Does it mean that businesses are not going to spend on IT? Answer is obviously NO. Its just that businesses would consider other options. It does not mean that IT service providers are going to go out of business it just implies that they need to change to meet consumer expectations of spending less on IT and more on operations.

Lets pause for a second and look back to see how other industries evolved over time. Power industry went through the same evolution cycle. Factories used to own their power grids that supplied electricity for their needs. Subsequently power generation was centralized and now you have subscription based electricity model where you pay every month just for as much as you use. Similarly the mobile manufacturers changed their business model to subscription based model as it was not economical to sell their cell phones directly considering the manufacturing cost. IT industry is no different and the time has come to change. Businesses want to pay for the platform, infrastructure and services only when they use these services. According to one estimate we only use around 30% of the computational power we have although we spend alot on purchasing and maintaining the harware resources. There is enough evidence to suggest that Cloud is the future and i believe that we should prepare ourselves for this change.

Lets elaborate a little on what exactly do i mean when i say that we need to change to adapt to Cloud computing. It’s not that we only need to start training ourselves on Cloud platforms and start building applications for cloud but its also about understanding this change from the business perspective. It means that once our applications our up and running the returns our not going to be very high initially and its only the continuity with our customers that would reap us reward in the long term. It means that the cost for services has to be reduced to be profitable in IT. It means that the quality of applications we develop must improve to leverage the computational power of the Cloud. It means that IT companies must change the way they manage their clients so that they ensure client satisfaction over longer period of time. It means that IT companies need to streamline their processes to increase IRR per employee. It means the IT resources need to manage their time more efficiently. It is quite clear that the change is manifold and It would take sometime to devise methodologies for different business models that would work best with Cloud. However we need to start now to have an edge over our competitors. Every resource, irrespective of the role in industry need to start thinking  from the perspective of Cloud because it indeed offers lots of opportunities.  

In the end i just want to state that Cloud computing is nothing new atleaast for some of us (more on this in my next blog). It does not mean that we need to stop focusing on the on-premises  model. Its just that Cloud computing offers opportunities and only those that would recognize this would benefit from it.