Online computing: The crowded cloud
By Richard Waters, Andrew Edgecliffe-Johnson and Joseph Menn
Published: June 3 2011 22:30 | Last updated: June 3 2011 22:30
You want to send the photograph you’ve just taken to a relative but find you don’t know how to get it off your phone. You have work to finish at home this weekend – but the file you need is inaccessible, stuck on the hard drive in the office. That track you want to play in the car? It’s on the iPod, which you’ve left at home.
Such frustrations are increasingly a feature of everyday life. As the devices on which to view, work on or listen to digital data proliferate, a chasm has opened up between their liberating possibilities and the practical realities. Organising a growing mountain of personal information and media has become, in many instances, a chore.
Much personal information already lives online, whether on social networks such as Facebook, or on e-mail services such as Gmail and Hotmail. But the full potential of an online existence – a life spent in “the cloud”, to use the technology industry’s latest terminology – remains unfulfilled.
It is into this half-formed world that Steve Jobs, the consumer tech industry’s most closely watched taste maker, is about to step. On Monday, the Apple chief executive will appear at the US company’s annual developer conference to show off the latest software advances. Among them: the iCloud.
The details, as with all Apple announcements, are subject to intense speculation in the tech and media industries. The iPod, iPhone and iPad have transformed the company’s fortunes in the past decade. Expectations are now high that Mr Jobs will apply his knack for creating highly intuitive consumer technology to the problems of managing digital information across multiple devices.
Even before Mr Jobs takes the stage in San Francisco, at least one important element is clear. All four major music labels have signed up to iCloud, to allow customers of Apple’s iTunes store to listen to digital music they already own directly over the internet rather than downloading it to each of their devices separately.
The iCloud brand, however, has already stirred up bigger expectations than this. Many in the industry hope Mr Jobs will confer Apple’s seal of approval on an approach to online computing that other tech companies have pushed far more aggressively, though with mixed success.
“Apple adopting the word ‘cloud’ as central to what they are doing is very helpful to us,” says Steve Perlman, a former Apple executive and now head of an online gaming company.
The move will also sharpen growing competition between a handful of internet companies racing to stake out the medium. Eric Schmidt, Google chairman, said this week that a “Gang of Four” was setting the pace, with Apple, Amazon and Facebook joining the search company in redefining how consumers use digital technology.
Yet despite Mr Jobs’ outsized influence in consumer technology, he is anything but a leader when it comes to the cloud. Services such as Spotify in Europe and Pandora in the US have set the pace by enabling listeners to stream music, listening over the internet without downloading.
Apple has also fallen behind in bringing video to the web. US-based services such as Netflix and Hulu have proved more successful in getting movies and television shows to a large online audience.
In other services, too, Apple is lagging behind. From Facebook’s dominance of social networking to Google’s online document, photo-sharing and Gmail services, consumers have learnt to entrust large amounts of personal data to other online companies.
According to advocates, the next phase of the consumer cloud has an overpowering appeal: the convenience that comes from making all types of digital content available on any device. This attraction has so far outweighed concerns about the potential risks to privacy and security arising from letting personal data flow far beyond the user’s own hard drive.
“No one wakes up in the morning and says, ‘I wish I had more stuff in the cloud,’ ” says Brian Hall, general manager of Microsoft’s Windows Live and Internet Explorer businesses. “But if you tell them they can [gain access to] it on all their PCs and phones, then they get it.”
The concept may be simple but it is proving hard to make user-friendly. The crucial thing, says Mr Hall, is to make it easy to “synch” or move data from personal devices into the cloud; connect it with other services a consumer uses; and to make it all accessible from any device. “No one has done that well yet,” says Mr Hall.
Apple has struggled to find a big market for MobileMe, its attempt at synching data between devices. But there is hope in tech circles that Mr Jobs, who has succeeded before in making consumer tech intuitive and easy to use, will again show the way.
The impact is likely to be seen first in media, where content owners feel iTunes accounts that number in excess of 200m give Apple more influence over digital consumers than any rival.
The media industry is poised between hope and anxiety about the cloud, which could herald the latest sweeping change to their customers’ behaviour. On the one hand, executives see it as one of the first products of the digital age with the power to enhance their revenues rather than disrupt them.
“There are only so many movies you can store on your laptop,” said Bob Iger, Disney’s chief executive, this week. “If we give people the ability to buy a lot more because they can store a lot more ... I think that’s fantastic.”
Sir Howard Stringer, his counterpart at Japanese consumer electronics group Sony, displayed similar optimism last month, telling reporters: “All the big American companies, whether it be Amazon or Apple or Microsoft, recognise that that’s the delivery system that the customer wants.”
More media content companies see the cloud as an opportunity rather than a threat, says Chris Vollmer of the management consultancy Booz & Company. The large cheques Netflix has written for content, the prospect of new distribution markets, and signs cloud services limit piracy have all raised the industry’s hopes, he says.
. . .
The risks of the cloud cast a shadow on industry optimism, however. Sony and users of the network attached to its PlayStation console discovered the threats to security in April, when a hacking attack forced the company to suspend the service.
Furthermore, the full impact of this approach to computing on how consumers will gain access to media, and crucially how they will want to pay – if at all – is as yet only fuzzily understood. One risk, some in the industry say, is that it will accelerate the trend for consumers to rent rather than buy media and entertainment products and services. This has hurt sellers of CDs, DVDs and other physical media. Another big question facing media companies is the influence of a handful of online platform companies over their ability to reach – and charge – their customers.
For now, the scramble by these platforms for content has handed power to the media companies, though. The land grab under way in cloud computing “bodes well” for content owners’ pricing power, says Anthony DiClemente, an analyst at Barclays Capital.
One indication is the music industry’s warm reaction to Apple’s pending cloud music service, which has already prompted Amazon and Google to rush out similar services of their own, though they have yet to gain approval from the music industry. Labels and publishers hope to use Apple’s terms, which will give them 70 per cent of iCloud’s music revenues, as a template in negotiations with Amazon and Google.
Shahid Khan of MediaMorph, an industry consultancy, predicts content owners will preserve the upper hand in the cloud, and that platform owners face the bigger problem in making money. Google’s record of alienating content owners would harm its prospects, while the sums Amazon and Netflix must pay for content would make their ambitions “challenging”, he said. Only Apple, with its powerful ecosystem of iPhones, iPads and other devices, was likely to retain its bargaining power.
“Near term, especially in music, Apple sits in a Walmart-like position in terms of its digital retail market leadership,” says Mr Vollmer.
Yet even if this proves correct, Apple still faces a profound challenge to its way of doing business: the desire of consumers to access their media and personal data on any device – whether or not it bears an Apple logo.
And media companies show little willingness to let technology companies use their products to lock consumers into their services. Interoperability between online services is important, said Disney’s Mr Iger, so that consumers will be able to move their libraries from one cloud to another without difficulty.
“If someone wanted to corner a market, and a connected platform, in the long term I think it would be impractical,” says Mr Perlman, whose OnLive games service is one of many upstarts that are gambling on being able to get unrestricted access to consumers on all manner of devices.
As in other areas of consumer technology, however, it would not do to underestimate Apple.
Additional reporting by David Gelles
Copyright The Financial Times Limited 2011. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
Showing posts with label cloud services. Show all posts
Showing posts with label cloud services. Show all posts
Saturday, June 04, 2011
Friday, April 15, 2011
‘It is a service, not a technology’
‘It is a service, not a technology’
By Charles Batchelor
Published: March 15 2011 16:22 | Last updated: March 15 2011 16:22
Chief executives and finance directors are understandably cautious when the IT industry waxes enthusiastic about the next “breakthrough”.
What are they to make of cloud computing, the latest big technology idea to come to mainstream business attention?
Simply put, cloud computing is the use of off-site servers, routers and databases that are not “owned” by the business, to handle all, or large parts, of a company’s computing needs.
Instead of managing requirements in-house, with all the costs and hassle involved, a company will outsource operations such as e-mails, enterprise resource planning and data storage.
Factories used to generate their own power on-site, but now routinely buy in electricity and gas.
Cloud enthusiasts believe that, in future, companies will buy computer capacity in the same way.
Executives may be unfamiliar with the cloud but many will have been using it for years without realising it.
E-mail providers such as Google, social networking sites including Facebook, and Flickr, an online photo and video-sharing service, are all run from global data centres, many of which are owned by companies such as Amazon and Microsoft.
The e-mails or photographs that appear to be stored on your desk- or laptop are actually held remotely.
The term “cloud” comes from the technical diagrams used to represent telecommunications and computer systems, which traditionally enclosed networks within cloud shapes.
Cloud computing represents a development of previous arrangements such as “managed services”, where a company handed the operation of its IT network to an outside supplier.
It also piggybacks on “virtualisation” technology, which allows users to get more out of their network by squeezing several applications on to a single server.
“Research has shown that [in-house] data centres do not use more than 20 per cent of their capacity,” says Michael Kogeler, director of cloud strategy at Microsoft International.
It was the idea of putting all that unused capacity to work and the growth of the internet that led to the birth of cloud computing.
“The cloud is a service, not a technology,” explains Rupert Chapman, a cloud specialist at PA Consulting. “You only pay for what you use” and access the computer power over the internet.
Cloud computing is sometimes seen as of particular benefit to small and medium-sized businesses that lack the resources to set up their own IT departments but it is also used by large companies.
It allows businesses of all sizes to acquire computer capacity to launch products and services quickly.
There is little or no capital expenditure involved and costs are based on transactions completed or volume of data stored and should be lower than if managed in-house.
Because the capacity of the cloud is, in theory, unlimited, companies can store far more data and handle far more transactions than might be possible on their in-house system.
They can also back up data on a remote site for security. Because data are not kept in house, they can be accessed from anywhere with an internet connection, so are available to executives on the move.
Going to the cloud for capacity also means the IT department is not constantly updating servers and software to keep up with technology.
A large cloud provider can also devote more resources to maintaining the security of the network.
“From customers’ perspective there are three ways to use the cloud,” says Mr Chapman.
“They can use it to dip their toe in the water to test an application. If it meets their needs, they can bring it in-house and run it on their own machines. The test environment has traditionally been expensive but one client achieved an 80 per cent cost saving.
“Alternatively, customers can use the cloud on a selective basis for particular services. A market information organisation used a customer relationship management system to suck in just the customer information they needed.”
Finally, companies can take a “transformational” approach, opting to use the cloud for most of their applications, retaining direct control only of those that make a real difference to their organisation. Relatively few companies do this as yet, says Mr Chapman, because they often have a big investment in their legacy systems or are tied into managed service contracts.
Problems companies should watch out for include legal ownership of data, security and the risk of getting locked in to a service provider.
An appropriate contract should resolve ownership issues. Security should be better at a dedicated cloud provider, but hackers have attacked networks and sensitive data should be encrypted in transit and storage. The contract should also allow a customer to change providers easily.
Copyright The Financial Times Limited 2011. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
..
By Charles Batchelor
Published: March 15 2011 16:22 | Last updated: March 15 2011 16:22
Chief executives and finance directors are understandably cautious when the IT industry waxes enthusiastic about the next “breakthrough”.
What are they to make of cloud computing, the latest big technology idea to come to mainstream business attention?
Simply put, cloud computing is the use of off-site servers, routers and databases that are not “owned” by the business, to handle all, or large parts, of a company’s computing needs.
Instead of managing requirements in-house, with all the costs and hassle involved, a company will outsource operations such as e-mails, enterprise resource planning and data storage.
Factories used to generate their own power on-site, but now routinely buy in electricity and gas.
Cloud enthusiasts believe that, in future, companies will buy computer capacity in the same way.
Executives may be unfamiliar with the cloud but many will have been using it for years without realising it.
E-mail providers such as Google, social networking sites including Facebook, and Flickr, an online photo and video-sharing service, are all run from global data centres, many of which are owned by companies such as Amazon and Microsoft.
The e-mails or photographs that appear to be stored on your desk- or laptop are actually held remotely.
The term “cloud” comes from the technical diagrams used to represent telecommunications and computer systems, which traditionally enclosed networks within cloud shapes.
Cloud computing represents a development of previous arrangements such as “managed services”, where a company handed the operation of its IT network to an outside supplier.
It also piggybacks on “virtualisation” technology, which allows users to get more out of their network by squeezing several applications on to a single server.
“Research has shown that [in-house] data centres do not use more than 20 per cent of their capacity,” says Michael Kogeler, director of cloud strategy at Microsoft International.
It was the idea of putting all that unused capacity to work and the growth of the internet that led to the birth of cloud computing.
“The cloud is a service, not a technology,” explains Rupert Chapman, a cloud specialist at PA Consulting. “You only pay for what you use” and access the computer power over the internet.
Cloud computing is sometimes seen as of particular benefit to small and medium-sized businesses that lack the resources to set up their own IT departments but it is also used by large companies.
It allows businesses of all sizes to acquire computer capacity to launch products and services quickly.
There is little or no capital expenditure involved and costs are based on transactions completed or volume of data stored and should be lower than if managed in-house.
Because the capacity of the cloud is, in theory, unlimited, companies can store far more data and handle far more transactions than might be possible on their in-house system.
They can also back up data on a remote site for security. Because data are not kept in house, they can be accessed from anywhere with an internet connection, so are available to executives on the move.
Going to the cloud for capacity also means the IT department is not constantly updating servers and software to keep up with technology.
A large cloud provider can also devote more resources to maintaining the security of the network.
“From customers’ perspective there are three ways to use the cloud,” says Mr Chapman.
“They can use it to dip their toe in the water to test an application. If it meets their needs, they can bring it in-house and run it on their own machines. The test environment has traditionally been expensive but one client achieved an 80 per cent cost saving.
“Alternatively, customers can use the cloud on a selective basis for particular services. A market information organisation used a customer relationship management system to suck in just the customer information they needed.”
Finally, companies can take a “transformational” approach, opting to use the cloud for most of their applications, retaining direct control only of those that make a real difference to their organisation. Relatively few companies do this as yet, says Mr Chapman, because they often have a big investment in their legacy systems or are tied into managed service contracts.
Problems companies should watch out for include legal ownership of data, security and the risk of getting locked in to a service provider.
An appropriate contract should resolve ownership issues. Security should be better at a dedicated cloud provider, but hackers have attacked networks and sensitive data should be encrypted in transit and storage. The contract should also allow a customer to change providers easily.
Copyright The Financial Times Limited 2011. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
..
Tuesday, December 07, 2010
What is your IT organisation doing to fuel workers’ passion?
By John Hagel and John Seely Brown
Published: December 7 2010 23:23 | Last updated: December 7 2010 23:23
Passion drives performance. What is your IT organisation doing to fuel passion at every level?
In our opening column, we talked about the decades-long decline in financial performance. Return on assets across all companies have fallen 75 per cent for all public companies in the US since 1965. A profoundly destabilising technology infrastructure is a big part of this transformation.
Another key metric in decline is passion. According to the just-released 2010 Shift Index, four of five workers surveyed are not passionate about their jobs.
Sure, they are working longer hours during the downturn, but that doesn’t mean they are engaged or that they will stick with you when the economy improves. Without truly passionate workers, companies will find it difficult to turn round the steady deterioration in financial performance.
Passionate workers are more likely to take challenges and transform them into opportunities.
But passionate workers are easily frustrated by institutional, technical, and cultural barriers that make it difficult to learn and connect with others.
With the right technology infrastructure, however, organisations can fuel rather than frustrate passion. Here’s how.
Disposition for passion
Passionate workers possess two valuable dispositions.
Questing: when asked how they react to challenges, passionate employees we surveyed most often responded that they see an opportunity to learn something or solve problems rather than viewing the unusual as a nuisance or a distraction.
Passionate workers seek out challenges to test their abilities, rather than waiting for them to surface. The passionate are twice as likely as disengaged workers to display this questing disposition.
As a leader, you want people with questing dispositions to move to the next level of performance improvement.
Connecting: Passionate workers have a strong desire to reach out and connect with others who can help them get better faster. We found passionate workers are twice as likely as disengaged workers to have a connecting disposition. They exchange knowledge outside the firm through conferences and social media much more often than workers who lack passion.
Our research suggests that effective knowledge exchange will be crucial to performance improvement.
These dispositions of questing and connecting reinforce each other – both positively and negatively. If you have a questing disposition, but you lack the ability to connect, you can’t learn new things as easily from others. If you have a connecting disposition, but can’t focus your attention on interesting challenges, you’re not as likely to use connections you establish to improve performance.
Implications for technology
Since these dispositions are increasingly central to sustained performance improvement, the question for IT organisations becomes how to create the conditions that support passionate workers.
Most IT organisations have a hard time facilitating people with connecting and questing dispositions. Many people inside big corporations, in particular, view enabling tools such as social media or cloud computing as toys, distractions, or security breaches. In fact, from our experience in discussions with a range of IT executives, most IT departments are ambivalent about, if not actively resisting, the next generation of technologies.
But to help workers pursue their passion, leaders must:
Change the mindset
Most executives are deeply suspicious of workers’ passions, unless they define passion simply as working longer hours to get the usual rote tasks done. Instead, passion is the quest for unexpected challenges. Questing and connecting are huge opportunities to drive performance improvement, if you can encourage and support these traits.
Identify relevant edges
The edges of your firm and your industry – whether geographic, demographic, or between companies – offer the environments where questing and connecting dispositions flourish.
Edges are fertile ground for innovation, attracting risk takers who can drive knowledge creation and economic growth. They are where the questing and the connecting dispositions have the most freedom. Find the edges with the most opportunity and the least resistance, and mobilise passionate people to these edges so they can attack performance challenges emerging there.
Deploy the right platforms and tools
New technology can significantly enhance the impact of passionate employees. Cloud computing, and the sophisticated analytic tools that can be accessed in the cloud, provide individuals with the resources they need to experiment and improvise in addressing performance challenges.
Rather than waiting in a long line to receive resources from a central IT organisation, employees can use the emerging cloud infrastructure and access everything from raw server capacity to sophisticated research tools. They can rapidly scale up and back IT resources and take promising approaches to market.
But it’s not just cloud computing. Passionate workers can now use social networks to stay in touch with a much larger group of individuals. Shared workspaces provide an increasingly rich environment for these individuals to connect with each other and others outside the firm jointly to develop promising approaches to difficult performance challenges.
In fact, these two categories of IT, cloud computing and social software, weave together in powerful ways to integrate both the questing and connecting dispositions of passionate workers. Employees begin to see the compounding effects of connecting with relevant and diverse expertise wherever it resides and combining that expertise with a rich array of IT resources to pursue challenging performance quests.
As passionate workers on the edge of the enterprise demonstrate the kind of impact they can achieve, less engaged workers start to see how much they can accomplish through their initiatives, and passion begins to build in them, as well. As the less engaged connect with more passionate workers, they manifest more of the questing and connecting dispositions. Passion starts to spread.
Emerging technologies play a central role in breaking down many of the institutional barriers that frustrate passionate workers. Rather than feeling blocked, these workers begin to feel more empowered. As passionate employees thrive, companies in turn will find themselves in a better position to deal with performance pressures. Instead of becoming a source of increasing stress, challenges become an opportunity for passionate workers to attain levels of performance never before possible.
John Hagel III, and John Seely Brown are co-chairman and independent co-chairman, respectively, of the Deloitte Center for the Edgew
Their books include The Power of Pull, The Only Sustainable Edge, Out of the Box, The Social Life of Information, Net Worth, and Net Gain.
Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
..
Published: December 7 2010 23:23 | Last updated: December 7 2010 23:23
Passion drives performance. What is your IT organisation doing to fuel passion at every level?
In our opening column, we talked about the decades-long decline in financial performance. Return on assets across all companies have fallen 75 per cent for all public companies in the US since 1965. A profoundly destabilising technology infrastructure is a big part of this transformation.
Another key metric in decline is passion. According to the just-released 2010 Shift Index, four of five workers surveyed are not passionate about their jobs.
Sure, they are working longer hours during the downturn, but that doesn’t mean they are engaged or that they will stick with you when the economy improves. Without truly passionate workers, companies will find it difficult to turn round the steady deterioration in financial performance.
Passionate workers are more likely to take challenges and transform them into opportunities.
But passionate workers are easily frustrated by institutional, technical, and cultural barriers that make it difficult to learn and connect with others.
With the right technology infrastructure, however, organisations can fuel rather than frustrate passion. Here’s how.
Disposition for passion
Passionate workers possess two valuable dispositions.
Questing: when asked how they react to challenges, passionate employees we surveyed most often responded that they see an opportunity to learn something or solve problems rather than viewing the unusual as a nuisance or a distraction.
Passionate workers seek out challenges to test their abilities, rather than waiting for them to surface. The passionate are twice as likely as disengaged workers to display this questing disposition.
As a leader, you want people with questing dispositions to move to the next level of performance improvement.
Connecting: Passionate workers have a strong desire to reach out and connect with others who can help them get better faster. We found passionate workers are twice as likely as disengaged workers to have a connecting disposition. They exchange knowledge outside the firm through conferences and social media much more often than workers who lack passion.
Our research suggests that effective knowledge exchange will be crucial to performance improvement.
These dispositions of questing and connecting reinforce each other – both positively and negatively. If you have a questing disposition, but you lack the ability to connect, you can’t learn new things as easily from others. If you have a connecting disposition, but can’t focus your attention on interesting challenges, you’re not as likely to use connections you establish to improve performance.
Implications for technology
Since these dispositions are increasingly central to sustained performance improvement, the question for IT organisations becomes how to create the conditions that support passionate workers.
Most IT organisations have a hard time facilitating people with connecting and questing dispositions. Many people inside big corporations, in particular, view enabling tools such as social media or cloud computing as toys, distractions, or security breaches. In fact, from our experience in discussions with a range of IT executives, most IT departments are ambivalent about, if not actively resisting, the next generation of technologies.
But to help workers pursue their passion, leaders must:
Change the mindset
Most executives are deeply suspicious of workers’ passions, unless they define passion simply as working longer hours to get the usual rote tasks done. Instead, passion is the quest for unexpected challenges. Questing and connecting are huge opportunities to drive performance improvement, if you can encourage and support these traits.
Identify relevant edges
The edges of your firm and your industry – whether geographic, demographic, or between companies – offer the environments where questing and connecting dispositions flourish.
Edges are fertile ground for innovation, attracting risk takers who can drive knowledge creation and economic growth. They are where the questing and the connecting dispositions have the most freedom. Find the edges with the most opportunity and the least resistance, and mobilise passionate people to these edges so they can attack performance challenges emerging there.
Deploy the right platforms and tools
New technology can significantly enhance the impact of passionate employees. Cloud computing, and the sophisticated analytic tools that can be accessed in the cloud, provide individuals with the resources they need to experiment and improvise in addressing performance challenges.
Rather than waiting in a long line to receive resources from a central IT organisation, employees can use the emerging cloud infrastructure and access everything from raw server capacity to sophisticated research tools. They can rapidly scale up and back IT resources and take promising approaches to market.
But it’s not just cloud computing. Passionate workers can now use social networks to stay in touch with a much larger group of individuals. Shared workspaces provide an increasingly rich environment for these individuals to connect with each other and others outside the firm jointly to develop promising approaches to difficult performance challenges.
In fact, these two categories of IT, cloud computing and social software, weave together in powerful ways to integrate both the questing and connecting dispositions of passionate workers. Employees begin to see the compounding effects of connecting with relevant and diverse expertise wherever it resides and combining that expertise with a rich array of IT resources to pursue challenging performance quests.
As passionate workers on the edge of the enterprise demonstrate the kind of impact they can achieve, less engaged workers start to see how much they can accomplish through their initiatives, and passion begins to build in them, as well. As the less engaged connect with more passionate workers, they manifest more of the questing and connecting dispositions. Passion starts to spread.
Emerging technologies play a central role in breaking down many of the institutional barriers that frustrate passionate workers. Rather than feeling blocked, these workers begin to feel more empowered. As passionate employees thrive, companies in turn will find themselves in a better position to deal with performance pressures. Instead of becoming a source of increasing stress, challenges become an opportunity for passionate workers to attain levels of performance never before possible.
John Hagel III, and John Seely Brown are co-chairman and independent co-chairman, respectively, of the Deloitte Center for the Edgew
Their books include The Power of Pull, The Only Sustainable Edge, Out of the Box, The Social Life of Information, Net Worth, and Net Gain.
Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
..
Thursday, November 11, 2010
Cloud computing in businesses
By Richard Waters in San Francisco
Published: November 1 2010 00:15 | Last updated: November 1 2010 00:15
Cloud computing may be one on the most talked-about IT trends of recent years, but it has yet to make much of a mark inside big business. Like many new tech trends, the hype has far outweighed the business realities.
If that is to change, then it could well be projects such as recently undertaken by the tax division of ADP, the big US payroll processing company, that explain why.
Extracting data from its customers’ individual systems to prepare employee tax returns has been an expensive proposition, requiring separate engineering in the case of each customer to create the interface with ADP’s own systems.
As a result, it has only been economic to sell the tax filing service to large companies, typically with more than 1,000 employees, says Lori Schreiber, general manager of ADPs tax services division. But inserting a computing service delivered from the "cloud" into the middle of this process has now changed the economics of the business.
In ADP's case, the cloud service in question, from IBM, is a standardised way of "mapping" information from client systems so that it can be "read" by ADP's own systems.
As a result, says Ms Schreiber, ADP can now sell the tax filing service to medium-sized companies it could not profitably reach before. It has also been able to change the way it prices its service, potentially making it more attractive.
"It allowed us to promote it as more of a standard model, rather than charging for it as a professional service where we bill by the hour," Ms Schreiber says.
If cloud computing is to become more than an empty promise, it is this type of new business potential that will account for the shift.
IBM, which has just revamped its cloud computing strategy to base it around services like the one sold to ADP, says this highlights the way the new technology is likely to be felt in the day-to-day business world.
"Taking the operating cost out of service delivery" is one of the big opportunities for companies in many industries, says Mike Daniels, head of IBM's services division. The key, adds Erich Clementi, head of strategy for the company's cloud business, is the "extreme standardisation" made possible by the central delivery of a service. By streamlining Individual processes like this, businesses will be able to create more flexible services, and at a lower standard cost, he says.
As the ADP case suggests, this could open up new business opportunities. For companies in industries like telecommunications, financial services and media and entertainment, pushing some parts of their processes into the cloud will make it possible to "reach markets that weren't reachable before," says Frank Gens, an analyst at IDC. "It will become a fundamental part of the model for all companies trying to reach emerging markets."
Until now, most of the attention in cloud computing has been on the so-called "public clouds" run by companies like Amazon.com and Salesforce.com - centralised services where companies can buy computing resources in much the way they buy electricity.
Services like these have mainly appealed to start-up companies or those looking to create new businesses from scratch. Starting with a blank sheet of paper, designing a company's processes with no "on-premise" systems can be highly appealing.
But for most companies - with large sunk investments in IT systems and an understandable aversion to handing over control of their most important corporate data - this is too big a step to take.
Much of the focus of the big tech companies is now on refining these services to make them appeal to established companies. Mr Daniels compares it to the emergence of e-business in the early days of the internet: after a brief flurry of excitement over the potential of pure-play dotcoms to topple business leaders in many industries, the new technology was applied to enhance the operations of established businesses. It was Walmart, not Pets.com, that won the day, he says.
"The belief is, the money will really be in the enterprise loads, and no one has really untapped that yet," adds Paul Maritz, chief executive officer of VMware, which makes some of the key software for data centres that deliver cloud services.
The key to unlocking this potential are what the tech industry calls "hybrid clouds" - combinations of on-premise and remote, third-party systems that can be combined to create a service, much as ADP found with its tax-filing service.
To make this work, companies need to isolate individual processes that they can outsource, and accept a much higher level of standardisation in these areas, Mr Daniels says. He compares it to the standardisation that has already been imposed on many service functions inside companies, like human resources.
The same constraints are now being placed on the IT departments’ application programmers, he says. They will lose some choice in the platforms they build on and will have to choose from a narrower "catalogue" of IT services, but with significant benefits to their companies in terms of operating flexibility and cost.
These standardised services, in turn, will evolve to suit the needs of particular industries, bringing what IBM says will be a new addition to the IT lexicon: "industry clouds."
This is all a long way from the model of fully-outsourced, "public clouds that first drove interest of the new technology architecture. To the tech purists, it will smack of compromise, surrendering some of the scale benefits promised by fully centralised computing.
There's no question, you lose a lot of the economies of the public cloud," says Mr Gens. "As soon as you say ‘private', you're talking a higher price point."
Long term, that makes the full cloud computing model an appealing one. But for the foreseeable future, the gains seen by most businesses will come from more modest and achievable goals.
Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
Published: November 1 2010 00:15 | Last updated: November 1 2010 00:15
Cloud computing may be one on the most talked-about IT trends of recent years, but it has yet to make much of a mark inside big business. Like many new tech trends, the hype has far outweighed the business realities.
If that is to change, then it could well be projects such as recently undertaken by the tax division of ADP, the big US payroll processing company, that explain why.
Extracting data from its customers’ individual systems to prepare employee tax returns has been an expensive proposition, requiring separate engineering in the case of each customer to create the interface with ADP’s own systems.
As a result, it has only been economic to sell the tax filing service to large companies, typically with more than 1,000 employees, says Lori Schreiber, general manager of ADPs tax services division. But inserting a computing service delivered from the "cloud" into the middle of this process has now changed the economics of the business.
In ADP's case, the cloud service in question, from IBM, is a standardised way of "mapping" information from client systems so that it can be "read" by ADP's own systems.
As a result, says Ms Schreiber, ADP can now sell the tax filing service to medium-sized companies it could not profitably reach before. It has also been able to change the way it prices its service, potentially making it more attractive.
"It allowed us to promote it as more of a standard model, rather than charging for it as a professional service where we bill by the hour," Ms Schreiber says.
If cloud computing is to become more than an empty promise, it is this type of new business potential that will account for the shift.
IBM, which has just revamped its cloud computing strategy to base it around services like the one sold to ADP, says this highlights the way the new technology is likely to be felt in the day-to-day business world.
"Taking the operating cost out of service delivery" is one of the big opportunities for companies in many industries, says Mike Daniels, head of IBM's services division. The key, adds Erich Clementi, head of strategy for the company's cloud business, is the "extreme standardisation" made possible by the central delivery of a service. By streamlining Individual processes like this, businesses will be able to create more flexible services, and at a lower standard cost, he says.
As the ADP case suggests, this could open up new business opportunities. For companies in industries like telecommunications, financial services and media and entertainment, pushing some parts of their processes into the cloud will make it possible to "reach markets that weren't reachable before," says Frank Gens, an analyst at IDC. "It will become a fundamental part of the model for all companies trying to reach emerging markets."
Until now, most of the attention in cloud computing has been on the so-called "public clouds" run by companies like Amazon.com and Salesforce.com - centralised services where companies can buy computing resources in much the way they buy electricity.
Services like these have mainly appealed to start-up companies or those looking to create new businesses from scratch. Starting with a blank sheet of paper, designing a company's processes with no "on-premise" systems can be highly appealing.
But for most companies - with large sunk investments in IT systems and an understandable aversion to handing over control of their most important corporate data - this is too big a step to take.
Much of the focus of the big tech companies is now on refining these services to make them appeal to established companies. Mr Daniels compares it to the emergence of e-business in the early days of the internet: after a brief flurry of excitement over the potential of pure-play dotcoms to topple business leaders in many industries, the new technology was applied to enhance the operations of established businesses. It was Walmart, not Pets.com, that won the day, he says.
"The belief is, the money will really be in the enterprise loads, and no one has really untapped that yet," adds Paul Maritz, chief executive officer of VMware, which makes some of the key software for data centres that deliver cloud services.
The key to unlocking this potential are what the tech industry calls "hybrid clouds" - combinations of on-premise and remote, third-party systems that can be combined to create a service, much as ADP found with its tax-filing service.
To make this work, companies need to isolate individual processes that they can outsource, and accept a much higher level of standardisation in these areas, Mr Daniels says. He compares it to the standardisation that has already been imposed on many service functions inside companies, like human resources.
The same constraints are now being placed on the IT departments’ application programmers, he says. They will lose some choice in the platforms they build on and will have to choose from a narrower "catalogue" of IT services, but with significant benefits to their companies in terms of operating flexibility and cost.
These standardised services, in turn, will evolve to suit the needs of particular industries, bringing what IBM says will be a new addition to the IT lexicon: "industry clouds."
This is all a long way from the model of fully-outsourced, "public clouds that first drove interest of the new technology architecture. To the tech purists, it will smack of compromise, surrendering some of the scale benefits promised by fully centralised computing.
There's no question, you lose a lot of the economies of the public cloud," says Mr Gens. "As soon as you say ‘private', you're talking a higher price point."
Long term, that makes the full cloud computing model an appealing one. But for the foreseeable future, the gains seen by most businesses will come from more modest and achievable goals.
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Tuesday, April 13, 2010
The dawning of the IT automation era
The dawning of the IT automation era
By Alan Smith, senior vice president in the UK and Ireland for UC4
Published: March 23 2010 13:06 | Last updated: March 23 2010 13:06
Over the next five years, IT automation will overtake offshoring as the big IT efficiency trend.
For many companies, offshoring has reduced IT budgets by lowering the cost of labour and facilities but increasing complexity in IT infrastructure and more demanding service levels mean returns are diminishing.
According to the BDO Seidman 2009 Technology Outlook Survey, an annual survey of US chief financial officers conducted in January of 2009, only 42 per cent of the 100 surveyed said they had operations outside the country, compared to 79 per cent last year.
Despite this, companies will still seek cost savings in IT operations – and the answer will be IT automation.
Automation technology will drive further optimisation and lower the cost of IT operations, with several factors contributing to its coming of age – including cost reduction pressures and the need to align all business processes in a complex IT environment.
Cost Reduction
The first and most obvious reasons for IT automation are the opposing demands for cost reduction and improved service levels and capability.
The recession has forced IT professionals to squeeze costs out of their budgets, leaving them with a bare bones operating plan. At the same time, IT organisations are asked to deliver more with less and to deliver business innovation with cost avoidance strategies.
These pressures place severe time constraints on existing IT staff who are burdened by manual tasks, leaving little time to engage in strategic delivery of services and capability.
In a survey that UC4 conducted in April 2009, we found that one day of each working week was dedicated solely to IT administrative tasks – an indication of how much valuable staff time is wasted on well-defined, programmatic, repeatable tasks that could be handled by workload automation technology readily available today.
According to a 2007 report by Enterprise Management Associates, without data centre automation, the average company would have required eight additional staff, at a cost of £344,280. The survey also found that 77 per cent of respondents reported that automation improved data centre profitability.
IT staff and managers already recognise the benefit of IT automation software but lack the long-term perspective to carry it out. In a recent survey of Oracle Applications User Group members, UC4 found that the majority of respondents see IT process automation as a cost-saving measure, but budget restrictions in the tightening economy remain the biggest obstacle to wider adoption.
More than 60 per cent of respondents indicated they simply did not have the budget for automated solutions or tools.
Complex IT environments
The most compelling reason for the rise in automation is that IT environments are becoming more complex. Enterprise systems are becoming increasingly diverse, with companies employing a range of financial, enterprise resource planning, customer relationship management and sales force automation solutions from a range of vendors.
On top of that, IT environments are changing, with consolidation toward virtualised platforms and utilisation of external cloud-based technologies to deliver a business service.
Not only are infrastructures becoming more complex, but also the IT processes, as they typically span more than one application.
In the Oracle user group survey, we also found that 75 per cent of respondents reported difficulties monitoring and managing processes that span more than one application, with 57 per cent reporting that these struggles resulted in delays for the business, either in time-to-market or ability to integrate applications and processes.
Traditional job scheduling automation technology can’t address this level of complexity. The days of rigid, highly structured scheduling are gone. We are operating in a world where thousands of streaming, interdependent events must be understood in the context of how they impact the ability of IT infrastructure to meet business requirements.
What is required today in automation technology is real-time intelligence and just-in-time execution. This enables real-time monitoring and analysis of IT processes and allows companies to automate and connect between hybrid environments for a seamless integration, bringing visibility across processes and improved management and control over the success of transactions.
Without this real-time integration, existing staff are blind to the business process impact across the greater organisation.
The call to action is clear – as IT departments continue to do more with less and IT environments become more complex, the need to automate will be paramount. We are already seeing many vendors start to market automation software and company adoption is increasing. The IT automation era is upon us.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
By Alan Smith, senior vice president in the UK and Ireland for UC4
Published: March 23 2010 13:06 | Last updated: March 23 2010 13:06
Over the next five years, IT automation will overtake offshoring as the big IT efficiency trend.
For many companies, offshoring has reduced IT budgets by lowering the cost of labour and facilities but increasing complexity in IT infrastructure and more demanding service levels mean returns are diminishing.
According to the BDO Seidman 2009 Technology Outlook Survey, an annual survey of US chief financial officers conducted in January of 2009, only 42 per cent of the 100 surveyed said they had operations outside the country, compared to 79 per cent last year.
Despite this, companies will still seek cost savings in IT operations – and the answer will be IT automation.
Automation technology will drive further optimisation and lower the cost of IT operations, with several factors contributing to its coming of age – including cost reduction pressures and the need to align all business processes in a complex IT environment.
Cost Reduction
The first and most obvious reasons for IT automation are the opposing demands for cost reduction and improved service levels and capability.
The recession has forced IT professionals to squeeze costs out of their budgets, leaving them with a bare bones operating plan. At the same time, IT organisations are asked to deliver more with less and to deliver business innovation with cost avoidance strategies.
These pressures place severe time constraints on existing IT staff who are burdened by manual tasks, leaving little time to engage in strategic delivery of services and capability.
In a survey that UC4 conducted in April 2009, we found that one day of each working week was dedicated solely to IT administrative tasks – an indication of how much valuable staff time is wasted on well-defined, programmatic, repeatable tasks that could be handled by workload automation technology readily available today.
According to a 2007 report by Enterprise Management Associates, without data centre automation, the average company would have required eight additional staff, at a cost of £344,280. The survey also found that 77 per cent of respondents reported that automation improved data centre profitability.
IT staff and managers already recognise the benefit of IT automation software but lack the long-term perspective to carry it out. In a recent survey of Oracle Applications User Group members, UC4 found that the majority of respondents see IT process automation as a cost-saving measure, but budget restrictions in the tightening economy remain the biggest obstacle to wider adoption.
More than 60 per cent of respondents indicated they simply did not have the budget for automated solutions or tools.
Complex IT environments
The most compelling reason for the rise in automation is that IT environments are becoming more complex. Enterprise systems are becoming increasingly diverse, with companies employing a range of financial, enterprise resource planning, customer relationship management and sales force automation solutions from a range of vendors.
On top of that, IT environments are changing, with consolidation toward virtualised platforms and utilisation of external cloud-based technologies to deliver a business service.
Not only are infrastructures becoming more complex, but also the IT processes, as they typically span more than one application.
In the Oracle user group survey, we also found that 75 per cent of respondents reported difficulties monitoring and managing processes that span more than one application, with 57 per cent reporting that these struggles resulted in delays for the business, either in time-to-market or ability to integrate applications and processes.
Traditional job scheduling automation technology can’t address this level of complexity. The days of rigid, highly structured scheduling are gone. We are operating in a world where thousands of streaming, interdependent events must be understood in the context of how they impact the ability of IT infrastructure to meet business requirements.
What is required today in automation technology is real-time intelligence and just-in-time execution. This enables real-time monitoring and analysis of IT processes and allows companies to automate and connect between hybrid environments for a seamless integration, bringing visibility across processes and improved management and control over the success of transactions.
Without this real-time integration, existing staff are blind to the business process impact across the greater organisation.
The call to action is clear – as IT departments continue to do more with less and IT environments become more complex, the need to automate will be paramount. We are already seeing many vendors start to market automation software and company adoption is increasing. The IT automation era is upon us.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Cloud services: small businesses become big business
Cloud services: small businesses become big business
By Serguei Beloussov, chief executive of Parallels
Published: April 13 2010 17:21 | Last updated: April 13 2010 17:21
A buzz around the “cloud” has been created by some IT industry analysts and commentators who predict a dramatic shift towards it satisfying more and more IT needs.
The response of technology giants such as Google, Microsoft and Amazon show how they value the opportunity the trend of delivering IT services via the internet represents.
However, while these giants and much of the hype focuses on either clouds for the mass market consumer or large scale enterprise, less is said of the opportunity represented by small businesses. Yet it is this market – currently worth more than $500bn in annual IT spend – which is leading the way in adopting cloud services.
The range and scale of small businesses (essentially any business with fewer than 1,000 employees but more closely represented by businesses with fewer than 10) make them a vague entity. Leading industry sources conservatively estimate there are around 73m registered small businesses globally – but you could easily add an extra 100m unofficial small and home offices and a further 60m estimated small businesses in China alone.
For most of these small businesses, IT distracts them from their core business. Most do not have the resources to employ IT professionals and are not interested in how the technology is delivered so long as it does what they need, is affordable and easy to manage.
In reality, web hosters have been providing cloud services that address small business needs for simple IT since the late 1990s. Today it is this sector that is the fastest growing market in the cloud and where we see the real opportunity for growth.
Buying from the cloud enables small businesses to get sophisticated, enterprise-quality IT services easily, which would otherwise be too complex and costly for them. The model offers flexibility, enabling small businesses to scale up and down quickly, based on business need.
The services are managed by experts and decision-making is simplified as small businesses can get a range of business IT services bundled together from a single provider for a monthly subscription rate. The capital expenditure of buying in-house IT is transformed into an operational expense.
The resulting efficiencies make it understandable that small businesses are leading the way in adopting this model.
Web hosters currently host more than 150m small business domains and 50m websites, with bigger players such as 1&1 and Go Daddy providing millions of small business with services such as web hosting, web applications, virtual infrastructure services, hosted e-mail and collaboration, among others.
Further growth will come about as cloud services providers deploy more sophisticated technology, enabling them to add new services and increase the capabilities of their offerings.
For example, cloud services providers currently leading the way are those that use technology to differentiate their offerings, such as providing a wide range of services that can be self-managed by non-technical people.
Similarly, those deploying automation systems are able to serve hundreds of thousands of customers at very low cost and pass these savings on to their small business customers.
As cloud services providers continue to broaden their offerings in the future, their appeal to small businesses will increase, accelerating the adoption of IT through the cloud.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
By Serguei Beloussov, chief executive of Parallels
Published: April 13 2010 17:21 | Last updated: April 13 2010 17:21
A buzz around the “cloud” has been created by some IT industry analysts and commentators who predict a dramatic shift towards it satisfying more and more IT needs.
The response of technology giants such as Google, Microsoft and Amazon show how they value the opportunity the trend of delivering IT services via the internet represents.
However, while these giants and much of the hype focuses on either clouds for the mass market consumer or large scale enterprise, less is said of the opportunity represented by small businesses. Yet it is this market – currently worth more than $500bn in annual IT spend – which is leading the way in adopting cloud services.
The range and scale of small businesses (essentially any business with fewer than 1,000 employees but more closely represented by businesses with fewer than 10) make them a vague entity. Leading industry sources conservatively estimate there are around 73m registered small businesses globally – but you could easily add an extra 100m unofficial small and home offices and a further 60m estimated small businesses in China alone.
For most of these small businesses, IT distracts them from their core business. Most do not have the resources to employ IT professionals and are not interested in how the technology is delivered so long as it does what they need, is affordable and easy to manage.
In reality, web hosters have been providing cloud services that address small business needs for simple IT since the late 1990s. Today it is this sector that is the fastest growing market in the cloud and where we see the real opportunity for growth.
Buying from the cloud enables small businesses to get sophisticated, enterprise-quality IT services easily, which would otherwise be too complex and costly for them. The model offers flexibility, enabling small businesses to scale up and down quickly, based on business need.
The services are managed by experts and decision-making is simplified as small businesses can get a range of business IT services bundled together from a single provider for a monthly subscription rate. The capital expenditure of buying in-house IT is transformed into an operational expense.
The resulting efficiencies make it understandable that small businesses are leading the way in adopting this model.
Web hosters currently host more than 150m small business domains and 50m websites, with bigger players such as 1&1 and Go Daddy providing millions of small business with services such as web hosting, web applications, virtual infrastructure services, hosted e-mail and collaboration, among others.
Further growth will come about as cloud services providers deploy more sophisticated technology, enabling them to add new services and increase the capabilities of their offerings.
For example, cloud services providers currently leading the way are those that use technology to differentiate their offerings, such as providing a wide range of services that can be self-managed by non-technical people.
Similarly, those deploying automation systems are able to serve hundreds of thousands of customers at very low cost and pass these savings on to their small business customers.
As cloud services providers continue to broaden their offerings in the future, their appeal to small businesses will increase, accelerating the adoption of IT through the cloud.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Monday, March 17, 2008
FT.com / Technology - A bright future in the cloud
FT.com / Technology - A bright future in the cloud
A bright future in the cloud
By Shane Robison
Published: March 4 2008 17:36 | Last updated: March 4 2008 17:36
Nicholas Carr is right – the future of computing lies in the internet cloud. The technology industry is shifting to a new model in which people and businesses no longer install packaged software applications on their computers. Instead, they use their web browsers to access a wide range of “cloud services”, available on demand over the internet.
Without question, this marks an exciting new era in computing.
But there is a risk of over-simplifying this picture. The “cloud” itself – a vast data-processing infrastructure – represents a critical foundational piece. But on its own, it cannot deliver the rich experience that people and companies want as they look for a better way to access information, enjoy content, and communicate.
To realise the full potential of this new model, the IT industry needs to think about the cloud as a platform for creating new services and experiences that we have yet to imagine.
For example, cloud services could eveolve that are intelligent enough to anticipate people’s needs. In this next phase, searching will be done for users, not by them. This would be accompanied by a seamless, consistent experience across all of the different devices users own, and all the on-demand services they care about.
This leaves the IT industry with a lot of hard work to do. It requires a new set of core building blocks to deliver this new category of services; it needs smarter devices and more intelligent networks; and software will be the “secret sauce” that powers these new services and shapes the quality of the user experience.
The power of the cloud happens when there is continuous interaction between a device – smartphone, laptop, TV – and the network. A simple example: it is 2pm and your calendar shows you are booked on a flight to Toronto at 6pm. Your device should anticipate this trip and gather relevant information – weather forecast for the Toronto area, status update on the flight, recommended route to the airport based on latest traffic conditions, and so on. In this scenario, the step forward is the pervasive, proactive and personalised nature of cloud services.
Some may say they heard this during the 1990s internet bubble but at that time it was not possible to use the internet as a platform for anything more than static pages. Broadband changes all that but brings us to the need for a higher level of intelligence built into devices and networks, and the software that ties everything together.
Nicholas Carr correctly points out that the shift to cloud computing will dramatically reduce the cost of IT. But this shift goes far beyond cost savings; it marks a quantum-leap in the user experience.
Much attention so far has focused on software as a service, a proven model for making software applications available on demand over the internet – it frees customers from the expense and hassle of having to install and maintain applications locally.
But Saas is the tip of the iceberg. In the future, everything will be delivered as a service, from work life to entertainment to communities. In an “Everything as a service” world individuals and businesses will customise their computing environments and shape their experiences – from individual consumers to the largest global enterprises, which will increasingly turn to dynamic cloud-based offerings to meet their most demanding computing requirements.
As we approach the tipping point where computing moves into the cloud, there are five trends I believe worthy of close attention:
1. The digital world will converge with the physical world: Starting in about 1995, the mantra was, “Everything is virtual. Geography is irrelevant”. But from 2008, factors such as your physical location will mean a lot. Cloud services will be increasingly aware of context, down to details such as time, weather, where a user is headed, and which friends or business colleagues are nearby.
2. The era of device-centric computing is over. Connectivity-centric computing will take centre stage. The question “When am I going to get that one device that does everything I can imagine?” will be flipped on its head as any number of devices will provide easy access to all services and content. Devices become interchangeable, with cloud services becoming the focal point.
3. Publishing will be democratised. A global internet population of 1.2bn people now has the tools to produce everything from books and magazines to music and videos. This represents a massive disruption of old publishing models. People will soon be able to print on demand any book ever published; warehouses of physical inventory in the publishing world will no longer be necessary.
4. Crowd-sourcing is going mainstream. Fortune 50 companies will access top talent on a global basis via the internet, saving millions of dollars in professional areas as diverse as accountants, advertising professionals, attorneys, engineers, etc. Reputation systems will lower the risks involved by exposing poor performers.
5. Enterprises will use radically different tools to make key business decisions, including systems to predict the future. A merger is taking place between the structured data that fuels business intelligence and the unstructured data of the web. This combination will advance business intelligence. At the same time, market-based systems enabling accurate predictions of the future will become common practice in the enterprise.
By moving from the desktop to the cloud, we have an opportunity to reshape the computing industry and, more importantly, create more dynamic services that enrich lives and improve how we do business.
To realise this potential, we must innovate by building a higher level of intelligence into the next generation of devices, networks and software. When we are successful in providing a dramatically better user experience, we will be poised for the next wave of growth.
Shane Robison is executive vice president, chief strategy and technology officer, HP
Copyright The Financial Times Limited 2008
A bright future in the cloud
By Shane Robison
Published: March 4 2008 17:36 | Last updated: March 4 2008 17:36
Nicholas Carr is right – the future of computing lies in the internet cloud. The technology industry is shifting to a new model in which people and businesses no longer install packaged software applications on their computers. Instead, they use their web browsers to access a wide range of “cloud services”, available on demand over the internet.
Without question, this marks an exciting new era in computing.
But there is a risk of over-simplifying this picture. The “cloud” itself – a vast data-processing infrastructure – represents a critical foundational piece. But on its own, it cannot deliver the rich experience that people and companies want as they look for a better way to access information, enjoy content, and communicate.
To realise the full potential of this new model, the IT industry needs to think about the cloud as a platform for creating new services and experiences that we have yet to imagine.
For example, cloud services could eveolve that are intelligent enough to anticipate people’s needs. In this next phase, searching will be done for users, not by them. This would be accompanied by a seamless, consistent experience across all of the different devices users own, and all the on-demand services they care about.
This leaves the IT industry with a lot of hard work to do. It requires a new set of core building blocks to deliver this new category of services; it needs smarter devices and more intelligent networks; and software will be the “secret sauce” that powers these new services and shapes the quality of the user experience.
The power of the cloud happens when there is continuous interaction between a device – smartphone, laptop, TV – and the network. A simple example: it is 2pm and your calendar shows you are booked on a flight to Toronto at 6pm. Your device should anticipate this trip and gather relevant information – weather forecast for the Toronto area, status update on the flight, recommended route to the airport based on latest traffic conditions, and so on. In this scenario, the step forward is the pervasive, proactive and personalised nature of cloud services.
Some may say they heard this during the 1990s internet bubble but at that time it was not possible to use the internet as a platform for anything more than static pages. Broadband changes all that but brings us to the need for a higher level of intelligence built into devices and networks, and the software that ties everything together.
Nicholas Carr correctly points out that the shift to cloud computing will dramatically reduce the cost of IT. But this shift goes far beyond cost savings; it marks a quantum-leap in the user experience.
Much attention so far has focused on software as a service, a proven model for making software applications available on demand over the internet – it frees customers from the expense and hassle of having to install and maintain applications locally.
But Saas is the tip of the iceberg. In the future, everything will be delivered as a service, from work life to entertainment to communities. In an “Everything as a service” world individuals and businesses will customise their computing environments and shape their experiences – from individual consumers to the largest global enterprises, which will increasingly turn to dynamic cloud-based offerings to meet their most demanding computing requirements.
As we approach the tipping point where computing moves into the cloud, there are five trends I believe worthy of close attention:
1. The digital world will converge with the physical world: Starting in about 1995, the mantra was, “Everything is virtual. Geography is irrelevant”. But from 2008, factors such as your physical location will mean a lot. Cloud services will be increasingly aware of context, down to details such as time, weather, where a user is headed, and which friends or business colleagues are nearby.
2. The era of device-centric computing is over. Connectivity-centric computing will take centre stage. The question “When am I going to get that one device that does everything I can imagine?” will be flipped on its head as any number of devices will provide easy access to all services and content. Devices become interchangeable, with cloud services becoming the focal point.
3. Publishing will be democratised. A global internet population of 1.2bn people now has the tools to produce everything from books and magazines to music and videos. This represents a massive disruption of old publishing models. People will soon be able to print on demand any book ever published; warehouses of physical inventory in the publishing world will no longer be necessary.
4. Crowd-sourcing is going mainstream. Fortune 50 companies will access top talent on a global basis via the internet, saving millions of dollars in professional areas as diverse as accountants, advertising professionals, attorneys, engineers, etc. Reputation systems will lower the risks involved by exposing poor performers.
5. Enterprises will use radically different tools to make key business decisions, including systems to predict the future. A merger is taking place between the structured data that fuels business intelligence and the unstructured data of the web. This combination will advance business intelligence. At the same time, market-based systems enabling accurate predictions of the future will become common practice in the enterprise.
By moving from the desktop to the cloud, we have an opportunity to reshape the computing industry and, more importantly, create more dynamic services that enrich lives and improve how we do business.
To realise this potential, we must innovate by building a higher level of intelligence into the next generation of devices, networks and software. When we are successful in providing a dramatically better user experience, we will be poised for the next wave of growth.
Shane Robison is executive vice president, chief strategy and technology officer, HP
Copyright The Financial Times Limited 2008
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