"Cloud Computing is transforming everything we thought we knew about enterprise technology. At the most strategic levels of the modern enterprise, Cloud Computing is making a deep and inescapable impact.
Not convinced? Consider carefully these points.
1. Only Cloud Computing solutions are built on modern Internet technologies.
If your business is not running in the cloud, it is running on products designed before the commercial Internet existed. Think about that very carefully. Most businesses today are clawing for survival in a world of communication and commerce radically altered by instantaneous and ubiquitous worldwide access to data. Yet most are running on products rooted in primitive and defensive notions of synchronization, batch processing, small client/server networks, and slow, expensive, unreliable access to the outside world.
Cloud Computing applications have their roots in disruptive technologies such as Mosaic and ICQ. Conventional on-premise applications have their roots in old-world Token Ring and Banyan Vines. Considered that way, it is not surprising that many companies endured painful transitions to the new economy. Their business engines were simply not ready to take advantage of new advancements.
2. Cloud Computing's unassailable economics guarantee adoption.
Cloud Computing is not an ideology, but a path of least resistance and maximum advantage. The embrace of Cloud Computing by developers and end-user businesses alike is not an exercise in advocacy, but in economics. Corporate data centres keep growing—new, must-have enterprise applications, all demanding dedicated servers, are chewing up IT budgets and air conditioning units at an expanding rate. Whether a corporate data centre fits in a closet, or takes up a city block, the problems of complexity are the same because most companies employ the same gaggle of unrelated applications to run their businesses. Only the names and the price tags are different.
Cloud Computing centers are dramatically more efficient than a heterogeneous corporate data centre because their focus enables them to specialize and optimize. A single application, built for and delivered over the cloud, is many orders of magnitude more cost-effective. Consider Yahoo! Mail, one of the first truly successful Cloud applications. If that service had the same cost profile as a typical business running an Exchange server, Yahoo! Mail's 50 million users would cost the company $7 billion. Instead, the service costs pennies per user and can be leveraged anytime, anywhere. Cloud vendors will only get better at widening the gap.
3. Embracing the Cloud gives customers greater power.
In the conventional world, a customer's power ends the moment the cheque is signed. In the past, large, up-front payments and big-bang deployments gave vendors the upper hand in the long-term relationship. Annual maintenance contracts were equal parts assurance and extortion: 'Pay us 22% of the deal price again on January 1, or your next outage may be permanent'. High implementation costs and the relative easy money of maintenance deals gave developers little incentive to innovate.
The Cloud model, on the other hand, demands constant advances and improvements from providers. The technology cycle is no longer governed by three-to-five year maintenance contracts, but a subscription term measured in just months, coupled with significant and rigid service level agreements. This keeps customers' options open at all times, and as a result strongly motivates Cloud providers to continuously innovate. Management and maintenance is the domain of the developer—which, incidentally, is better positioned to maintain its own software on its own servers than a harried IT staffer is to massage someone else's code in a general-purpose data centre. And the power of the pocketbook dictates the terms of the ongoing relationship.
4. The disruptive power of the Cloud is already here.
If your business cannot find a way to leverage the power of the Cloud, rest assured that your competitors will. Need additional processing power in your data centre? You can take on the up-front and ongoing costs of a new server rack, but your rival will simply rent time as needed in Amazon's service cloud. Need to establish a new subsidiary? You can invest in VPNs and data centres, but your competitors will simply open a new subsidiary instance in their Cloud ERP solution and activate new licenses for the users. Cloud Computing is good business for all involved. And its strategic importance cannot be ignored."
NetSuite is a platinum sponsor of the BusinessCloud Summit in London on 2nd December. Delegate registration is now open. Full details can be found here.
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