Podcasts
1st December 2010
Episode 7 - Episode 7 - Is the future cloudy?
Hi and welcome to The Business Plan, brought to you by LeasePlan. I’m Jackie Allender. This week our topic is cloud computing.
Have you heard that term? Or maybe you’ve heard about software-as-a-service or virtualisation?
Here’s how IBM described cloud computing in a whitepaper it produced early last year. It’s “an emerging computing model by which users can gain access to their applications from anywhere, through any connected device.” That means, instead of installing software or applications on servers residing in your business, the applications your business needs to use reside in very large data centres, managed offsite.
In this model, software vendors sell you applications which you can access via the web – which you pay for according to the number of users and probably on a yearly basis. This is software-as-a-service. Typically it is done on a subscription basis; you can add and delete applications as the business need arises, without having to invest heavily for the privilege.
The other aspect of cloud computing is that not only can your applications reside elsewhere, you data can also live in the cloud of the internet. Virtualisation describes the phenomenon of having your servers elsewhere.
Cloud computing is still relatively new. But many businesses are beginning to embrace the opportunities it provides.
The promise of cloud computing – in particular for small and medium sized enterprises – is this:
- Low start-up costs
- Low cost for sporadic use
- Ease of management, with faster deployment than traditional software applications
- Scalability – you can access computing resources when you need them, and downsize when they’re no longer required
- Device and location independence
- Rapid innovation
Thomas E. Hogan, senior Vice President for Hewlett Packard software, explained the attraction of cloud computing to a conference a couple of years ago. For too many companies, he said, IT costs were 80 per cent maintenance and 20 per cent added value. Cloud computing could reverse those proportions, he suggested.
A recent report by CSC’s Leading Edge Forum Executive Program looked at the business value of the cloud. Co-author Doug Neal says the most important value of the cloud is not lower costs but improved agility – for the business as a whole, not just for IT. The agility comes from being able to offload any aspect of your organisation’s IT infrastructure to an outside provider and pay only for services as you need them.
As an example, he says the pharmaceutical company Eli Lilly used Amazon’s EC2 cloud services to add 50 servers in just a few days to assist in the development of a new drug. Normally deploying that number of servers in house would take weeks, and with any delay in a pharmaceutical project costing an estimated $150 a second, the cloud computing option saved a massive amount.
But Neal points out, cloud computing is still in its infancy and there remain issues to be ironed out. Many organisations are worried about the security and privacy risks from outsourcing operations in this way. Of course for small and medium enterprises it’s likely that the large cloud service providers such as Google and Amazon are far better at security than they are.
Doug Neal suggests that smart companies will carefully evaluate what can and can’t go up to the cloud and push certain applications up while keeping applications that need unique distinguishing characteristic down into a traditional in-house data centre.
However, one thing he is very clear about: cloud computing is as significant for IT as the iPod has been for the music industry, with business as a whole having an entirely new way of viewing, using and paying for technology. Organisations need to start coming to grips with that change.
Well, that’s it for this week. I hope you’ve enjoyed this edition of The Business Plan. Don’t forget, if you have something you want to say about this issue, go to the LeasePlan website at leaseplan dot com dot au and follow the links to ‘The Business Plan’, where you’ll find a transcript of this podcast, as well as a section where you can make a comment. Next week our focus is innovation. I’m Jackie Allender, thanks for listening.
LINKS RELATED TO THIS STORY
http://www.internet.com/IT/NetworkingAndCommunications/VirtualInfrastructure/Article/41683
http://www.informationweek.com/news/services/saas/showArticle.jhtml?articleID=211200504
http://lef.csc.com/research/projects/Default.aspx?id=9522
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agigiolmerm
31st Jan 2011
Nice site ....)