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Everyone's having cloudy thoughts!



The economic turmoil, globalization and the changes in the New World Order means that organizations cannot afford to waste time, human and financial resources on processes that can rapidly and easily be automated and managed. Businesses need to transform themselves into agile operations capable of turning a constantly changing business environment into opportunities. Process innovation and speed of change are the key opportunities for competitive differentiation moving forward. Traditional IT solutions are finding themselves under stress as they struggle to meet the demands of the business leaders and customers they serve.

Business leaders are looking for new ways to use computing power to meet their needs. Fortuitously, two trends are beginning to coalesce to provide a new way of delivering applications as services. They are:

1. The cloud
2. Process centric situational applications

The entire field of computing is fast becoming a "cloud" -- a collection of disembodied services accessible from anywhere and detached from the underlying hardware.
There will be many ways in which the cloud will change businesses and the economy, most of them hard to predict, but one theme is already emerging. Businesses are becoming more like the technology itself: more adaptable, more interwoven and more specialized. These developments may not be new, but the advent of cloud computing will speed them up.

A recent analysis of cloud computing in the Economist stated that there were a plethora of data centers worldwide and estimated that 7,000 data centers existed in America alone. Most of these data centers were one-off designs that had grown over the years. Many surveys show that these data centers are highly inefficient. According to a study by McKinsey, a consultancy, and the Uptime Institute, a think tank, on average only 6 percent of server capacity is used. Nearly 30 percent are no longer in use at all and many organizations are unaware of which application is running on which server. What a waste -- and think of the impact on the environment!

This "cloud" of computing resources will not only effect the number of data centers and the number of people employed in them -- it will have profound implications for the organization. On one level, the cloud will be a huge collection of electronic services based on standards. Many web-based services are built to be integrated into existing business processes. IT systems will permit organizations to become more modular and flexible and this will lead to further specialization. In the cloud it will become even easier to outsource business processes, or at least those parts of them where firms do not enjoy a competitive advantage. This also means that companies will rely more on services provided by others.

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