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Archive for the ‘cloud computing’ Category

NewImageFor those that have questions around cloud computing-baed security, taxonomies, and frameworks, please make sure you read “Security Guidance for Critical Areas of Focus in Cloud Computing, V2.1.” It contains a wealth of information beyond security issues, covering the NIST cloud computing model and OpenCrowd cloud taxonomy.

 

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NewImageMost studies underestimate the impact that cloud computing can have on revenue generations, overplaying the principle contribution to cost savings. As in the case of a study (part 1 and part 2) by U.K. Department for Business, Innovation and Skills, which concluded cloud computing would not materially contribute to the productivity of small and medium size enterprises (U.K.-based enterprises). They also noted that the cloud computing-based productivity of SMEs is approximately 5% less than large enterprises. However, a detailed review of their methodology show a fatal flaw in their analysis.

Most analysts can’t see beyond the obvious potential cost savings associated with provisioning on demand services, whether being infrastructure, services, and/or software. It is clear that under the right set of economic, operational, and business conditions, cloud computing can lead to significant savings in both infrastructure and human capital. But the benefits don’t end there.

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The real narrative that CEOs/CFOs/CIOs want to focus on is how the cloud computing phenomenon can lead to top line revenue growth. But, in and of itself, the cloud does not. That’s right, cloud computing is not a DIRECT contributor to top line growth, unless you are one of the cloud providers. So, as in most cases, analysts conclude, incorrectly, that there are NO revenue contribution benefits whatsoever in having a cloud-centric business philosophy.

NewImageNow let’s jump over to those analysts assessing the benefits of systematic innovation programs. As in most cases, studies have show that companies who have vibrant andrepeatable innovation program (SEI level 3 or 4), can show predictable top line revenue results (Apple, Google, etc.). But what is the relationship between cloud computing and innovation?

Cloud computing is more about agility (ability to systematically change), that cost control. The ability have access to global networked set of computing assets, ranging from enterprise to high performance computing, as well as petabytes of storage and analytical services, all on demand, it key to ANY modernday enterprise innovation program. Being able to envision,conceptualize, and implement customer/client facing disruptive ideas within hours and have then vetted in the market in days is THE competitive advantage.

NewImageAt some point the analyst will eventual look deeper into the cross organization implementation of cloud computing and report on system wide cause and effects benefits of provisioning on demand. But until then, we will, as a business community, need to rely on commonsense to help us in those business decisions impacting the top, as well as the bottom line.

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The eBiz question of the day is, “Does the private cloud lack business sense?”

What does and does not make business sense it contextual and highly dependent on the meaning of “business.” Traditionally, viable cloud computing business models were predicated on some form of cost take out or risk transfer. IT departments transfer capital investment for operational expenses. If the longterm TCO for a cloud-based implementation was less than a private version; well, it made business sense. This kind of cost take down, Business Sense 1.0, was the primary cloud funding model for 2008-2010.

However, with the decline of the economy, most companies have taken out just about all the cost they can over the last few years. Companies are now looking to the definition of Business Sense 2.0, thinking about business growth in terms of revenue, margin, and market share. The new funding question becomes, “How will a private, or public, cloud help our company grow?” In essence, there is a strong desire to determine the business impact from moving to the cloud.

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Unfortunately, the answer to this version of the business sense question is no. No, most companies are not finding additionally significant business value (revenue, margin, market share, or customer satisfaction) through the adoption of private clouds. Yes, there are marginal cost improvements through increase productivity for highly cyclical operations, but little to no impact on top line goals.

The private cloud appears to be a business enigma that is best understood through yesterday’s lens. A view that has probably seen its better days. Let’s move on to the real work at hand – finding ways to seed the cloud in order to rain top line revenue.

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Introduction to Cloud Computing, by Archie Reed and Stephen G. Bennett, is arguably one of the better basic discussions about the cloud.

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While is an except from their book (Silver Clouds, Dark Linings: A Concise Guide to Cloud Computing), this discussion of cloud services market, benefits, what is and isn’t the cloud, and the value proposition is valuable knowledge in and of itself.

 

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The eBiz question of the day is, “Is the Cloud Right for My Business?”

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When making these decisions, we should reframe this kinds of question into the form of, “Is the Cloud Necessary for My Business?”  I have written about necessary (without these things you fail) and sufficient (with them you might succeed) characteristics for a long time. The “Is It Right for Me…” form is a Sufficiency form in that you can always for reasons for say “No.” That is, all you need is one No response in all the rationale to make the final answer No.

The “Is it Necessary for Me…” response, on the other hand, requires just one Yes in order for an actionable decision to be made. If the cloud is a necessary element, that is, some element is required for your business to be successful, then you need to cloud in order not to fail. It is quicker to work through this multi-dimensional decision process with necessarily-based questions than trying for justify all the reasons needed to prove if will make you successful.

With that as a background, for most companies working to connect their value chain into the value chain of their partners and clients, then the cloud IS A necessary component of the value creation process. Think about how Walmart has used the cloud to flatten their 30,000 member supply chain into just 4 layers. Without the cloud, being a necessary component, they would fail to deliver on the low cost promises to people like you and I.

So, when looking at the cloud, ask yourself this: “Can I find just one area where the cloud is necessary for me to do business?” If the answer is yes for that one area, then the answer is yes for the company.

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The eBiz question of the day is, “Do you agree with what Brain Stevens, CTO of Red Hat, said recently, that the adoption of cloud isn’t going to be in 2010, but that it will be several decades before we see the kind of evolution and maturation necessary to sway the big business to the cloud?”

Evolution, more specifically, sustaining evolution [Clayton Christensen, Innovator Dilemma] is natural progress seen in all technologies. Most users can always find things they don’t like about technology they are using, which leads to a wealth of incremental improvements. Some of which are more beneficial than others.

A more interesting insight, however, comes from addressing the question, “What is the next disruptive technology after the cloud?” Think about it for a second. What is the technology, that does not exist today, that will replace cloud computing tomorrow? Answer this riddle and you might be the next Amazon.

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eBiz’s newest question, “Are the Jobs Lost from HP a Harbinger of thing to come?” has an answer that most of us do not want to hear.

Yes, the transformation of manual to automated work is one of the many impacts that increased productivity brings to a business. Human beings, by our nature, are highly none repetitive, despite our daily rituals. We do not perform well when it comes to doing the same thing over, and over, and over again.

Computing systems, and by it extension the Cloud, represent all the things that we humans are not. They designed to be task-oriented, highly-structured, time-sensitive, and overtly-repetitive. Translated – the are highly efficient work machines capable of doing the things it does more efficient, not necessarily more effectively, than humans.

In the end, this means that less effort will be needed for those activities in the cloud space than in a human sphere. It is a simple law of productivity, one that we should understand and get use to. If you are concern about the loss of jobs to the cloud, as most of us are, then we can get some solace in knowing that there will always be activities more suited to humans than computers. Thus, most likely they will not elevate into the ether none as Cloud Computing.

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