How is cloud changing the landscape of modern business?

Everywhere you turn today in the modern world of the IT professional everyone seems to be taking about cloud computing. In light of this I have decided to throw my hat in the ring and give my opinion on how I see the business sphere changing.

What is every business interested in? I am sure a number of interesting and diverse reasons have gone through the minds of people reading this, but simply put it is ensuring the business stays in profit and costs are kept to a minimum. For a long time now IT has had the stigma of being a leech on business funds. By this I mean the return on investment received by IT investment is never fully realised by the business due to ongoing support and constant maintenance that comes with these of projects. Finally cloud computing has given us a means to change this. If we consider the substantial costs that come with the purchase of software licenses that a huge percentage of business need to function on a daily bases often the value created by these purchases is often unbalanced. However cloud computing has given us a means to revolutionise this, the traditional means of  purchasing software has been almost disbanded in favour of an open source approach.

However it is not only open source projects that are changing their approach to how their software is purchased. Even well established companies have seen the need for change, they have identified that the organisations that use their software are either huge ever changing organisms that will grow when times are good and shrink when the economy demands it or small start-ups that cannot meet the costs associated with the traditional software license system offered. On this basis companies like Microsoft and Adobe have started to offer their products on a per monthly / per user bases that allows start-ups access to the same technology as huge enterprises for as long as required. Therefore we are seeing that cloud computing is changing the competitiveness of the business environment for start-ups, but we are also seeing how cloud computing is allowing larger organisations a great deal more flexibility and allowing them rapid elasticity which gives them the ability to scale up and down when required a defining requirement of cloud computing.

When you consider the budget conscious world we currently inhabit, the cost of maintaining these software solutions is often four times the cost of software. With cloud hosted solutions this maintenance cost is absorbed by the provider thereby reducing the ongoing operational cost to the business – yet another example of cloud computing making IT more cost effective.

We also have to acknowledge that cloud computing is not simply a means of replacing Opex with Capex, an argument often used to emphasise the benefits of cloud computing. It is in fact lowering Opex versus Capex. How is this done I hear you say? Well with the current method of providing IT service you are required to purchase the equipment (servers, routers, etc), you then have the added Opex of monitoring networking equipment, your systems administrators, hardware vendors and so on. This I believe is the hidden treasure behind cloud computing, if you adopt cloud computing your are moving this substantial Opex costs to the cloud service provider, you also need to factor in how this now simplifies your infrastructure. You are now only having to deal with one vendor instead of a host of vendors spread out across network, servers, data centres and so on. It is a firm belief of mine that simplification of any problem will allow for the greatest innovation and cost saving which I have gathered from years of business analysis work.

I mentioned Openstack earlier on in this article and now seems as good a time as any to bring to light another factor I feel we will change the current business world we inhabit. This is going to be the rise of new industry leaders and IT vendors. Now do not misinterpret what I am saying, the likes of VMware and Microsoft are not going anywhere. However I do feel that we will see the rapid adoption of new technologies like Openstack that will perhaps knock these established vendors off their pedestals. There is already evidence of this happening with a reported number of larger organisations already looking to Openstack for private cloud needs. I believe there is a very simple reason for this, Openstack was developed for the sole purpose of delivering private clouds which means that these organisations can stillip expo abide by the compliance requirements (PCI, ISO) whilst being given the cost savings that come from adopting cloud computing and open source software. On the back of this, another point to note for these organisation is that any acquisition and mergers these companies take part in will be a far simpler process in terms of bring the IT infrastructure together.

Perhaps the biggest shake up we are going to see is an increased awareness and leveraging of the Internet and web 2.0. This can already be seen by a number of retailers giving up their high street presence in favour of a digital platform. We are even seeing the likes of banks who, for a number of years, have relied on their high street presence for continued profits choose a digital first approach, We are even seeing the formation of digital banks such as Atom Bank formed in early 2015, the first UK bank to be completely digital with no presence of a bank on the high street. Why is it we are seeing this new business approach?  Simply put, it is down to cloud computing and its ability to automate and rapidly expand infrastructure to deal with increased traffic to sites or applications.

Finally and I feel they most important change we are going to see within the business world is an acceptance of experimentation and innovation. Prior to cloud computing there would have been a lot of hesitation by the C-suite of any organisation to try to innovate or experiment using IT. The only clear reason I can see for this is that the cost of providing the resources for a project that could potential fall flat on its face was too much of risk to any organisation despite its size. So how does cloud computing help this? Well with the clouds ability to pay for only what is used for as long as it used nullifies any risk. If it is identified that that a new project is not generating the expect outcome all resources currently being utilised in the cloud are stopped the expenditure is only up to the point at when the resources where stopped. This means that there is no ongoing costs to the company, but there is also no upfront costs. The often overlooked benefit to cloud computing its ability to rapidly copy reason process that seem to be working. So if a project is generating greater than expected outcomes using cloud computing this process could be duplicated almost instantly allowing the company to capitalise and generate as much income from it as long as there is a need / market for them to do so.

In conclusion cloud computing certainly brings with it an immense amount of change and uncertainty. It also brings with it the chance to change the very environment in which we currently work in, allowing us to march on into the future innovating for the better.

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