Cloud Computing for Business – The Challenge


We have looked at why people are turning to cloud computing, at what it is, at how it is used, and how to establish a cloud computing vision. We have discussed the issues involved in buying cloud services. We have gained an understanding of the risks of cloud computing, and of how to build and measure its rewards.

Used in the right way, cloud computing can be a great accelerator of collaboration-oriented architecture. But what does that mean for the enterprise itself, and for its executives and decision-makers?

A common point of discussion pertaining to cloud is the scope and role of the enterprise. In fact some have proposed to consider changing the viewpoint of “cloud in the enterprise” to “enterprises in the cloud”. This is a subtle yet significant change that presents a transition in thinking and enterprise operations, from silo or boundary management to “boundaryless” services.

Cloud computing is a change brought about by the convergence of a number of new and existing technologies. It is an important stage in the development of IT systems, comparable with the emergence of the mainframe, the minicomputer, the microprocessor, and the Internet.

This is happening in the context of major transformations in business and society as a whole, with which cloud computing is inextricably linked. The trends are described in books such as Why Buy the Cow? from Subrah S. Iyar on how on-demand powers the economy [IYAR] and The Big Switch by Nicolas Carr that takes the analogy even further with distributed industrial IT services [SWITCH]. We are apparently headed for virtual businesses, serving a virtual society.

Economic, environmental, and global activities shape regional markets, products, and services in many industry sectors. Government legislation and investment priorities drive standards and commercial behaviors. The Internet, mass media, and collaboration create new access channels that enable market developments hitherto constrained by geography and performance limitations.

Cloud-based networking has become part of everyday social interaction. Its impact on business could be equally profound. Collaboration services are now just beginning to be used in commercial companies. They will become an essential part of our business fabric as the children of today, schooled in their use, become the business leaders of tomorrow.

The business fabric is changing in other ways. Business units are becoming more specialized, and therefore more efficient. Each unit operates within a set of ecosystems, performing particular services for the other participants, and using services that they provide. The enterprise is one of those ecosystems. The bonds that bind its constituent units together are becoming weaker, and their external bonds are becoming stronger.

Cloud computing is an enabling factor. The Internet enabled business units to communicate faster and more effectively. Cloud computing enables them to share software applications that embody business logic, transforming the speed and efficiency of ecosystem operation.

Cloud is an Internet phenomenon. The Internet way of doing business is very different from traditional enterprise models. Enterprises that try to base their cloud initiatives on models where everything (processes as well as IT) is internal, will never achieve real returns from the cloud. In short, the enterprise architecture has to change to embrace the new way of doing business. The change will not be overnight but a start needs to be made now.

The move to cloud has a particular impact on the IT department. Traditionally, it was wholly within the enterprise and served other enterprise business units. It met all of their IT needs, designing, procuring, and operating the IT infrastructure and the business applications that ran on it. With cloud computing, some or all of those services are performed outside the enterprise. Cloud computing is extending the trend to remove services from IT-department control that started with the introduction of the PC. The business of IT becomes that of leveraging the products and services through competing platforms and channels to defend, attack, and build customers and market share.

Most enterprises apply cloud using an incremental approach. They may start by incorporating external cloud services in their in-house solutions, and gradually move to buying whole solutions such as CRM as external services. Incremental adaptation is less risky than big-bang. Taking things one step at a time helps to ensure that the components of your architecture remain interoperable.

Cloud does not just affect the IT department. It impacts on the whole business:

  • It changes what the business does. This is not just a question of whether the enterprise does its own IT. It transforms the way that business units interwork with other participants in their ecosystems, and this may lead to the whole shape of the enterprise being redefined.
  • By transforming the way business units within the enterprise interwork, it can change the internal structure of the business too.
  • It changes what the people in the enterprise do. Internal business processes have already become significantly computerized. Collaborative business processes will become computerized in the same way.
  • It changes the way that people work. Social networking tools will change business, as well as social, interaction. One change will be to where people work – they will have less need to share an office, and more opportunity to work from home; cloud computing is an enabler for “the new way of working”, and the desire to work this way is a driver for cloud adoption. Other changes will be to improve the quality of what people do, and increase their productivity.

There are many implications of using cloud for business and IT stakeholders. The results can be very positive. But this is not guaranteed. Spending on cloud services could go out of control. Employees could refuse to cooperate in the transition process. The cloud services may not integrate with the business model, or transform it in the way that was intended or desired.

To take advantage of cloud computing, you must develop a vision for the future of your enterprise, and transform the enterprise to realize that vision.

The vision may start with new IT services and new ways in which they will be provided. It may go on to define a new shape for the enterprise, and a new internal structure. It may include new principles of operation and new processes. It may mean a changed way of working, and a new culture.

This will mean a major architectural transformation, affecting the business processes and the supporting information systems and technology. It should be a positive experience for the enterprise, the people that work in it, and yourself. It will require careful consideration of the factors, discussion with all the people concerned, and big, sometimes painful, decisions.

This is the challenge that cloud computing gives to the business executive.

Are you ready?