Why should enterprises move data and applications into the cloud? The discussion on enterprise cloud strategy is still to this day focused on cost-reduction, primarily featuring economies achieved in infrastructure, platform and even applications. Certainly no one is going to argue that this is all worth thinking about; every business needs to be aware of cost reduction opportunities.
However a complete cloud strategy for an enterprise needs to be a whole lot more comprehensive than that. Enterprises, big and small, need to stretch their minds to take in the business opportunities that emerge from a cloud way of working, opportunities that are difficult or impossible to achieve in an environment of discrete platforms and applications.
The cloud starts to grow a broader silver lining as we move up from storage and simple application hosting to embrace business models and processes that have been re-engineered for a cloud environment, especially when those processes span the boundaries from one enterprise to another, providing the binding that links manufacturers, wholesalers, retailers and customers.
For example, a service provider can multiply its channels to market and expand its market reach by embracing – in the cloud – complementary service providers who can create new service mashups which will attract customers in new niches. Multiple partners collaborate via a coherent cloud-based infrastructure to combine and integrate those services, deliver them to customers and bill for them. Customers for these services use the same cloud collaboration infrastructure to compare offerings, place orders, analyze performance and usage, and manage their accounts.
This is quite a different concept from simply saving dollars on storage. The cloud, of course, enables both, and it’s not surprising that early adopters go for the type of gains that involve a simple cost-comparison and easy transition. But as the market matures, along with our understanding of all the good things cloud can deliver, we see more and more companies planning for more sophisticated business-oriented cloud projects, in addition to the simpler infrastructure based initiatives.
We’ve had discussions with several enterprise service providers about ways in which they can implement such business-transformational projects. Let’s be realistic: real effort is involved here. Consider the analysis needed to decide whether to buy one brand of server against another: this needs access to information, and undoubtedly some expertise. However re-engineering a department or a product line needs all of that expertise and more. Similarly, the decision to use cloud as an infrastructure cost-reduction tool is (relatively) straightforward; evaluating the use of the cloud for business transformation is much more complicated.
However, the pay-off from this effort will, in suitable cases, be substantial. Every company does the easy stuff. Initiatives that require thought and careful planning provide opportunities for differentiation only to those few enterprises that have the requisite expertise, talent and discipline.
We have always been aware that there are multiple perspectives on what cloud is for, and what it can do, and that all of those have some validity. We also believe that the true worth of cloud will not be realized until it is seen as providing a way of fundamentally changing how we do business. We provide service enablement and monetization software that knows how to ensure that such transformations are able to earn real money, so we would think that, wouldn’t we?
It’s therefore been reassuring for us to read a report from Gartner that supports this perspective. The Gartner analyst, Gregor Petri, reminds us that the way forward is through tactical business solutions rather than infrastructure replacements, and that it is essential to re-engineer business processes to reap the full potential of cloud. Exactly.
One of the ways to move in the direction suggested in the report, we suggest, is to work with application and platform vendors who have already worked out much of the detail of how to support a cloud-based business solution that is usable, flexible, secure and future-proof. That still leaves you with the non-trivial task of designing a customized environment to meet your exact business needs. So, there’s no need to re-invent the cloud, but you probably do need to think about re-inventing your business for the cloud.