Nick's Notes

Real World Cloud Benefits

Discussion about cloud services tend to be about IT benefits – CAPEX to OPEX, capacity flexing and rapid deployment. Those things are real benefits, and as our news feed this week shows, CIOs are more focused on cloud than they are on running in-house data centres.

I have long argued that readily available public infrastructure and cloud computing services will reduce IT from being a competitive advantage for the major corporations and level the playing field for new, nimble start-up companies – who will therefore be able to compete much more aggressively.

Small start-ups have another advantage from cloud too. They can move offices at the drop of a hat, as they grow. It’s relatively cheap to move physically – certainly not a barrier – although there are business continuity issues to deal with. With the complete computing suite in the cloud there is no IT disruption involved in a move, no configuration changes nor additional risks to any such move.

There is a big difference between relocating a few tens of people in a start-up from moving thousands of people in a plc. It’s more than just a scale problem. But a start-up will move frequently as it grows, and a plc tends to open up a new office if it needs it and thereby creates more network complexity.

I’ve never been much taken with the idea of a private cloud. After all cloud computing services are just a data centre and a network. If you’re running your own then call it what it is. However, thinking differently, and thinking appropriately about your business, may lead you to conclude that private cloud can have some benefits. I recall a major retailer implementing SAP in multiple instances – at a time when that was more expensive and not particularly popular. The explanation was compelling – the Board were buying and selling businesses, and although more expensive initially, in the longer term this was a cheaper way to detach IT in companies that were sold. It was also easy to open up a new instance and implement it in an acquired business.

As a CIO you need to look at the growth patterns of your businesses, to look at the propensity to add new offices, or move to bigger premises, and ensure your team designs the IT solutions around them. You might just be negating one of the advantages that a start-up competitor will have over your organisation – and so you can concentrate more on the real business of ensuring that your customer service, in all respects, is such that you build brand loyalty and deny the start-up a toehold.

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