Trend Spotting - Cloud Computing

Moderated by: Anne Keefer, Vanguard Communications

In the last two years we’ve seem a shift in how IT can deliver Sales, Marketing and Customer Service applications.  It takes the old saying, “thinking outside the box” one giant step further and into the clouds --cloud computing. 

The defining characteristics of cloud computing are:

1. Applications provisioned outside the company data center location,
2. Applications accessible over the Internet, and
3. Variable Cost (based on application size, number of transactions, or number of simultaneous sessions).

Organizations have long struggled with the time it takes to build or buy new applications.  The cost of the hardware and software licenses to build the development environment and, if need be, increasing the size of the production environment can be expensive or reactive.  IT employee training and phasing a new solution into production are time consuming.  And once the application is in production, you’re faced with software upgrades, fixes, and maintenance issues.

Cloud computing delivers enterprise level applications and software solutions that give companies the benefit of a scalable solution.  It can maximize the value of a current investment and provide access to the latest and greatest software.  Smaller companies can take advantage of cloud based services to compete with larger enterprises, reducing up-front cost and getting a scalable solution that keeps pace with their growth.  And for companies that have encountered unplanned software failures, cloud computing may be just the right solution for business continuity.  It provides a level of insurance so customers can continue to do business with you.  A variety of cloud computing solutions allow companies to start small with solutions that are based on internal need and do not directly impact the customer (things like offsite video storage or applications for remote workers), before moving more profit sensitive, customer facing solutions.

What are the downsides to cloud computing?  Solutions may be subject to low availability, internet connections may be slow or servers may become infected (Google App Engine, a service for developers, was crippled for several hours last month, blaming the outage on a database server bug) .  Solutions may be through multitenant or shared services, not an ideal solution for regulated businesses or hyper secure applications.  In addition, application customization may be limited. Finally, if your data structure does not follow commonly accepted data practices, there may be compatibility issues between your data and the host data servers.

The number of players in the cloud is growing everyday with big names like Microsoft and IBM joining the ranks of upstarts like Salesforce.com and RightNow.  They offer applications and services that break through the traditional mindset and give IT a solution that helps meet the bottom line and “just in time” production requirements.

And with the right vendor, companies can take advantage of a’ la carte solutions, where you can outsource some portion (development or DR) without sending everything off site at one time, thereby managing risk and maintaining a level of control for mission critical or data sensitive applications.  Though it appears an attractive solution, think carefully about how this type of service fits with your corporate IT strategy, and how much control you’re willing to cede.

Does cloud computing fit into your company’s strategy?  Let me know.