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Cloud Computing - A New Model?

Thursday, August 14, 2008

Cloud computing is one of those concepts that’s either very simple or very complex. Until you know which, it’s hard to understand the concept. I’ve been wrestling with that for several months and I’ve come up with a few nuggets of understanding that I’d like to share. Last week the AlwaysOn network posted a video from one of their conferences that’s helpful. The “chief geeks” of both NASDAQ and HP give their perspectives. Russ Daniels of HP points out that cloud computing can reduce operational costs, which his IT-manager customers obviously care deeply about. As a marketer I cared more about his follow-on statement that IT could then put more effort into creating value for customers. Think about that as you watch the video!

So cloud computing is a potentially valuable concept. What IS it? Irving Wladawsky-Berger is a retired IBMer who writes a tech blog that’s comprehensible to laypeople on the Always On Network. He’s a proponent of the cloud computing concept, seeming to see it as a logical extension of his work at IBM eservices. In a July 14 post he says:

I prefer to think of what is happening as the long-needed evolution of application software to something that is far more usable by humans. When virtualizing applications to be used by people who care nothing about computers or technology - as is mostly the case with Clouds - the key thing we want to virtualize or hide from the user is complexity.

In a more recent post he links to a page with 20 different—and all useful—definitions of the concept. That’s a strong indicator that the field is still evolving.

According to Gartner, the evolution is in its early stages. Actually, the interpretation of being near the top is their “hype cycle” is that sanity will soon return and the field will mature. Cloud computing is nearing the peak; note that Green IT is even closer. Translated, does that mean it’s a maturing, but not yet mature field? A field for IT managers to watch closely, but not necessarily ready for major investment.
Wladawsky-Berger likens cloud computing to other major management initiatives like Six Sigma and Lean Production. He says:

If cloud computing implies delivering high quality consumer and business services to your customers around the world over a variety of channels, as well as operating well engineered, efficient data centers - how can you stay in business and ignore this major marketplace strategy? It would be like an industrial company saying that all the advances in manufacturing and production over the last 25 years are not for them. It would be nearly impossible for a business to stay competitive with such an attitude. In fact, a number of enterprises have already been embracing cloud-like methodologies for delivering services to their customer, even if they don’t call it that.

The take-away? Cloud computing is a new model—an IT model, not a marketing one. Is it a new business model, allowing companies to outsource technical infrastructure (where have we heard that before?) and concentrate on their core business competencies? Maybe. It bears close tracking.

Applications like Amazon Web Services and Google Maps are examples of “computing in the clouds.” The Amazon cloud and the Google cloud, to be precise. They maintain the infrastructure, users take advantage of the functionality--as explained in yesterday’s post. Another example would be Facebook APIs. There are plenty of places to experiment without much risk or investment. Shouldn’t marketers be pushing those experiments—and doing so with the understanding there’s a greater implication than just a single application, important though it may be to their current marketing tactics?
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