The first thing is, it came as the best way for larger enterprises to expand their data centres without having to worry about additional investments on hardware, power and associated maintenance costs.
Energy efficiency has been one of the major preoccupations for enterprises in 2009, as power costs were adding up to their already ballooning operational expenses. Also many started to realise that adopting green practices is more a financially sound idea than just a politically correct one. Forced to tighten their belt in a year when the recession had a widespread impact on several major economies, enterprises have been told that cloud computing is a panacea for all their troubles, be it energy, data centre expansion, investment on real-estate or the risk of missed market opportunities due to lack of enablement of IT. The second important area where cloud computing seems to have had its impact is making IT adoption cost-effective. 2009 is also been most noted for growth in small and medium businesses (SMBs) and their quest to ITize, though it still seems too much of an on-the-paper stuff for anyone to jump on top of the queue to add momentum.
Vendors and service providers are either mildly excited or cautious about SMBs, which may have anything from one to 500 employees. But again, the definition keeps changing when we ask them who they exactly refer when they use the term SMBs.
There is expectation that the segment would grow to fulfil its potential in 2010 and beyond, but no one seems to be doing anything more than making sure of their presence in the segment. Cloud computing may probably provide that momentum.
De-risking strategy
Looking at things from the SMB’s perspective, cloud computing seems the perfect idea for them to balance their quest to adopt IT while not risking too much precious cash on it. All that they would need is a few systems and the internet to connect to the cloud service provider. With that they should have access to things like CRM (even other ERP applications if they put aside concerns about operating entirely on a third-party platform), while paying just for the time or amount of usage.
Many say that if 2009 is the year when the industry discovered cloud computing, 2010 will be the year when the phenomenon would attain a definitive shape both in terms of evolving into a viable platform as well as shaping the service model into a reliable and trustworthy one. Simple as it may sound, cloud computing has to answer several important questions before being embraced by the industry wholeheartedly. Foremost of them surrounds security and reliability. True, cloud has a cost benefit for businesses of all shapes and sizes, but the fact that they have to trust their most important IT assets into the hands of a third-party service provider seems too big a risk for many. Many businesses —– or at least those who have learnt to use IT extensively —– understand the term ‘business critical’ applications, without which they run the risk of not meeting customer expectations and would fail to include vital value additions. Until now, they have no choice but to run them continuously and use their tech expertise to expand their market size.
Of course, it doesn’t require great business acumen to understand that this is a vicious cycle from which businesses cannot afford to extricate themselves. They invest in IT, get more business, expand IT and realise that the expansion has to simply keep happening if they were to maintain pace with the expectations of the increasingly tech savvy markets they are serving.
Conceptual barrier
Signing up to a cloud service would mean that businesses are either partially or fully relieved of the potential headache of procuring hardware, creating floor space, getting extra power/cooling facilities, recruiting more personnel to maintain it etc. Enterprises need not look at the potential cost of enlarging their already sprawling IT infrastructure and medium companies need not fret over the cost of embarking on a similar exercise. Given that cloud is a relatively new concept and is yet to win full endorsement of all market and industry segments, it has to prove beyond all doubts that companies can trust their vital IT installations to it. Many experts attribute this as the major test for public cloud services. Of course, it has to be said that some are already creating private clouds to enable better access to services for their business units, partners and associates. It goes without saying that they take additional care of applications and data they handle in such a set up not too impossible after all.
But the big appeal, the so-called killer-solution as far as companies are concerned is the public cloud and without doubt many would watch how it would evolve in 2010. A few days into the New Year, the signs look promising as Dell announced that it has been piloting a few of its cloud services in India.
With an emphasis on simplification and automation, the hardware brand has promised to push several so-called ‘modular-services’ into the cloud ranging from encrypting laptops to patch and asset management. And, the company has promised that this would enable both larger and mid-size enterprises to cut back on the most important area of their IT spend -manpower. They say that a string of solutions they offer through cloud would potentially replace a platoon of service engineers enterprises had to summon for those tasks.
No one at this stage may believe service providers words that the cloud is secured enough for them to trust all vital data into it, but services such as Dell’s may allow them to test the waters. Perhaps this is a good starting point from where the industry can see if public cloud is a workable idea or is simply acid rain of additional troubles.