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
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.