'Cloud is about doing things better'

BANGALORE, INDIA: One thing the IT industry does very well is create ‘buzzwords’ and ‘hype’; the buzzword of the moment is ‘Cloud Computing’. The concepts hidden behind the cloud hype are classic business fundamentals – consider what you are doing today and find a way to do it faster, cheaper and/or better –using a technology supported base. Whether you’re ‘cloud-enabled’, ‘cloud-ready’ or ‘cloud-optimized’, the promises of cost savings and increased performance are boundless!

The various flavours of cloud computing – private, public, hybrid, and community – aim to drive business improvement by addressing much of the day-to-day data processing activities. These include the processing of customer databases, taking of orders, management of production lines or hosting of a communication and collaboration system.

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Rather than change these fundamental processes, the ‘cloud effect’ looks towards the method of creation, delivery, consumption and accounting of core data. Each of the changes, along with the cloud computing approach can have a startling effect on business.

Ignoring the usual tech-speak starting points for any cloud conversation – servers, networks, storage or the like –businesses are now recognizing the tectonic shift in the way services can be delivered through the cloud and are asking where the true business value can be found. Opportunities for improved time to market, higher quality of product, lower production costs, better customer service and improved customer retention are just some of the benefits.

Also read: How to create your own private cloud?

According to IDC estimates, the market for cloud computing in Asia, excluding Japan will continue to expand at a rate of about 40 percent a year until 2014. Gartner had predicted the global cloud computing market to generate around $68.3 billion in 2010.

Organizations in Japan and Australia lead in cloud adoption, with 36 percent, and 31 percent, respectively already running a cloud-related initiative. India and China lead the region in terms of adoption plans, with 43 percent, and 39 percent of organizations, respectively planning to implement cloud computing.

Although reducing cost remains the primary expected benefit of the Cloud, increased awareness and understanding are also driving greater expectations for longer-term, more strategic benefits because a correctly designed cloud offering can match the velocity demanded by almost any 21st century business environment.

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Beyond cost savings

The ability to create new compute services and capacity almost instantly through cloud computing is a dramatic change for most organizations. A typical enterprise will take anything from one to six months to introduce new compute capacity, depending on its ability to capacity plan, its appetite for advance capital expenditure, and its operational efficiency.

The impact of any cloud adoption (be it Infrastructure as a Service, Platform as a Service, Software as a Service, or any of the other ‘X-as a Service’ offerings) is its ability to deliver immediate results.

With the internet becoming all pervasive (within and across organizations), computing capabilities must be broadly available both within and outside the traditional sites and geographies. Such immediate access to computing power and core data by knowledge workers and mobile teams changes how they work and the value they can create in less time. The ability to deliver such ‘anywhere, anytime’ capabilities is a fundamental aspect of cloud offerings as they are built on a network that sits at the core of the business.

As the cloud market matures, businesses are beginning to see far more interoperability between cloud providers and cloud services because organizations can create an IT architecture that brings together all the key capabilities from various geographically diverse providers. The biggest shift that cloud computing has brought within organizations has to do not just with the technology – but rather the nature in which it is consumed– On demand, when needed and ONLY when needed.

When this new consumption model is available, users will consume more of a service that they do not have to commit to, and the “frictionless” nature of that consumption method will more readily leverage that service whenever it is of value.

For businesses this means that organisations can be far more responsive, operate more intelligently and with greater capability because it brings a larger amount of resource and capability for a focused and relevant amount of time – no more, no less.

Allied with the change in consumption model of cloud offerings is the way in which businesses account for its procurement, use and disposal. By purchasing compute capability ‘as a service’ through a cloud provider, the financial model shifts from Capital Expense (CAPEX) to Operational Expense (OPEX). This means that the need to invest massive amounts of capital ‘up front’ is eliminated — which also eliminates the need to amortize, write down and deduct various amounts from asset registers and the like.

By closely aligning the investment to the consumption, an organization can use exactly the amount of compute capability needed for the task on hand as it is needed – incurring only the cost for what is used – and then cease any further investment in or liability for that capability. This is a quantum leap in the efficient application of resources within business functions.

Even in their relative infancy, cloud services certainly have a lot to deliver. If we can cut through the hype and focus instead on addressing the challenges and opportunities in simple business terms, there is no reason why Asia cannot continue to lead in adopting this new world vernacular.

(The author works at Cisco as Sr. vice president — Data Center, India & SAARC.)

(The views expressed in this article are that of the author and do not necessarily reflect the views or policies of CIOL.)