>It’s Time to Invest in The Cloud

>Cloud computing is “shorthand for centralized computing services that are delivered over the Internet (a.k.a. the ‘cloud’).”

Cloud computing is to traditional computing as electricity is to rubbing two twigs together to make a fire. Ok. That’s a little bit of an exaggeration, but not by much.

Years ago, people made a fire in their home or workspace which they continually fed to get warmth, lighting, and cooking; now they get these from centralized utilities that distribute it to them on an as needed basis. It’s a lot more efficient that way!

With cloud computing—it’s very similar. Currently, we have our own computing resources (like a hearth and firewood) that we must purchase and regularly maintain to do basic information technology processes for transaction and analytical processing, information sharing and collaboration. Now, we can get these functions from centralized computing facilities or data centers that distribute them, as needed on a subscription or metered basis. This gives us a predictable, stable source of computing at reduced prices, delivered via the Internet, when we want and need it, and without the hassle of having to purchase and maintain the hardware and software infrastructure. It’s a user-centric model!

Most of us with very busy and already complex lives inherently understand and are drawn to a model that is convenient and cost-effective. Flip on the switch and voila—lights/heat in one case or email, e-Commerce, and online entertainment in another.

To me, if its not a mission-specific or highly sensitive application, the question is why shouldn’t it be in the cloud?

Fortune Magazine, 2 March 2009, on the rise of cloud computing juggernauts like Salesforce “a public company with a market capitalization of $3.5 billion, generates revenue of more than $1 billion a year—a 60% five-year annual growth rate—all from providing software subscriptions to business.”

Marc Benioff, their CEO says “We’ve always believe everything’s going into the cloud.”

Even detractors, like Larry Ellison, the CEO of Oracle, has helped fund Saleforce and another major cloud computing vendor, NetSuite. Moreover, “Oracle at the end of January lauched a new version of its online sales-management product…CRM on Demand” —so you see where Mr. Ellison is strategically placing some of his chips.

What about the other major application vendors?

“SAP said it would be releasing a software-as-a-service product in May…and Microsoft also has customer-management software available. IBM just named a cloud computing czar, and Google and Amazon are launching ambitions initiatives.”

So what’s holding up the transition?

Generally, the biggest cited obstacle to moving to cloud computing is security. Yet, “Salesforce has recorded only one security breach, a phishing attack in November 2007.” Moreover, because of the scope, scale, resources, and expertise that these vendors have, they can actually deploy and maintain a level of security that other organizations may only dream of.

Never-the-less, “companies remain committed to owning and hosting their own software and despite the tough economic times, they are loath to try something new, especially if it means making additional investments, however meager.”

But in the end “cost cutting and convenience are expected to prompt more firms to rent software that will be delivered over the Internet cloud.” IDC projects that by the end of 2009, “76% of U.S. organizations will use at least one web-delivered application for business use.”

Further, according to research firm, Gartner, “of the approximately $64 billion spent on business applications in 2008, about 10% or $6.4 billion, was spent on applications housed remotely and delivered via the Net.”

The writing is on the wall or should I say in the cloud!

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