Earlier this month the Times ran its regular “Cloud for Business” insert, in which I was asked to write a column on “Cloud for Digital Business” (see full text here). For reference I included below the piece on “The future of Cloud Computing” that it ran in an earlier edition. An item called:
Cloud Spotting is the Shape of Things to Come.When asked to write a column with an ambitious title like “The future of the cloud”, it is a good idea to look first at where cloud is at the moment and to realise that it is still very early days. Today, of the $2.7 trillion that global business spends annually on IT, just 4.8 per cent is spent on cloud computing.
The cloud’s penetration of the world of business is considerably less than its penetration of our daily lives. As consumers we get most of our news, information and increasingly entertainment through cloud services. In fact, the consumer industry has become the major driver of IT innovation. Many years ago, IT innovation was largely driven by defence spending, later by space exploration and then, for many years, the best place to see new innovative products in action, such as colour laptops, projectors and colour printers, was inside the offices of large enterprises.
How different things are now. The largest screens with the highest resolutions, the fastest network connections, “premium” tablets and the best connected mobiles are probably the ones you use at home. Even in large data centres, innovation is now largely driven by consumer-oriented organisations, such as Facebook, with its open computer server design initiative or Google with its MapReduce approach to making sense of very large sets of information. Many enterprises are still getting used to the idea that they are no longer in the driving seat. Where in the past they typically expected vendors to come running to deliver exactly what they asked for, they now need to figure out how standard offerings based on consumer-facing innovations can be used inside their business.
The cloud is not the only consumer-driven innovation businesses need to make sense of. It is joined by a nexus of new digital forces, including the social, mobile and information, or big data, forces. These offer truly new capabilities when combined. For example, businesses can now connect more directly with their customers using social and mobile technology. This provides huge amounts of customer information that can be analysed to enable businesses to communicate in a more relevant and useful way – a change facilitated by the use of software and IT infrastructure in the cloud.
However, by saying that the cloud is especially valuable for doing things that were not possible before, or at least not practicable or affordable, we make predicting the future of the cloud a lot harder. Ironically, uncertainty about the future is also one of the main reasons for using the cloud. When a business is uncertain whether one thousand or one million customers will watch its latest webcast or play its latest game, the elasticity of the cloud makes it an ideal platform because a business can rapidly scale up its IT capacity to meet its needs at the time and then scale it back when it is no longer required.
Similarly, when organisations are uncertain whether a new software implementation will be a tremendous success (leading to all divisions in all countries using the whole platform on a daily basis) or a modest failure (leading to a few divisions using some parts of the software in a couple of countries), it is better not to invest up-front but to “pay as you go”. An example of a company using this is game provider Zynga, which uses cloud computing extensively when launching new games, but then brings established games back in-house when many of the uncertainties about usage and capacity requirements have been resolved. It is this agility, the ability to “turn on a sixpence”, not cost-savings, that is the main driver for the cloud’s use by businesses today and it is likely to remain an important driver in future.
Conversely, if benefits are high and risks low, as for example in big data modelling and analytics where tens of thousands of processors run for short periods to simulate or predict customer behaviour, using the cloud may be a “no-brainer”, allowing a business to pay only for what it needs, and to avoid overheads and maintenance during times when this capability is not required.
Risk, however, is not a constant. Just as Japanese manufacturers pursuing just-in-time and Lean manufacturing concepts refused to accept that the changeover time between products on a production line was a constant and so actively worked to reduce them, consumers and cloud providers should work on reducing the risks, both real and perceived, associated with cloud computing. There are many ways to do this.
Trust increased as the industry learned from initial disasters and actively improved service – you can also expect to see both disasters and subsequent improvements with the cloud. Not all the cloud will be as regulated as the airline business, but some cloud services could well be more regulated than they are today, for example in privacy-sensitive areas like healthcare.
Author: G. Petri Source: Racontuer – Times instert