Business Driven Cloud Strategy

Convergence of Cloud, SOA and BPM

Today we are in the early stages of a transformation in the way business is conducted triggered by Cloud Computing, which will have profound impacts on economics, organizations and business models. The Cloud is rapidly gaining acceptance in the provisioning of utility IT resources, but we must look beyond the purely technology considerations to understand the broader implications and opportunities for business. In this report we outline a roadmap planning approach that integrates Cloud Computing, SOA and BPM in delivering new business models.  By David Sprott

Introduction

We see electricity as a simple utility, a standardized current that comes safely and predictably through outlets in our walls. The innumerable applications of electric power from televisions to machine tools and assembly lines have become commonplace.
But electricity and computing share a special trait that makes them unique . . . they can both be delivered efficiently from a great distance over a network. Because they don’t have to be produced locally they can achieve the scale economies of central supply.
In the early stages of both technologies where there are few technical standards and no broad distribution network the technology is impossible to furnish centrally. In the early days of electrification factories had to build their own generators if they wanted to use the power of electricity – just as today’s companies had to set up their own information systems  to use the power of computing.
It may take decades for companies to abandon their proprietary supply operations and all the investments they represent. But in the end the savings offered by utilities become too compelling to resist, even for the largest enterprises. The grid wins.      Nicholas Carr, Norton Paperback, 2009

In his best selling book, The Big Switch, Nicholas Carr describes how turning computing into a utility will ultimately change society as completely as the advent of cheap electricity. Carr admits that historical models and analogies have their limits, but he has convincing arguments that information technology and electricity share deep similarities.
 
In the case of electricity Carr goes on to describe how society was profoundly changed as electricity powered railroads, boats, moving walkways and filled cities with a blaze of light. Tabulating machines dramatically changed the cost and timing of the 1880 census and spawned a new world of computing and commerce. But more generally the electric grid accelerated the concentration of wealth in large businesses, a trend that had been forming since the Industrial Revolution.

Cloud Computing embodies utility computing. It’s more than a name change, as we discuss in a sister CBDI Journal report this month; Cloud raises the level of encapsulation, abstraction and interface. The result has the potential to have similarly profound consequences on society and business. Like electrification, the change in economics is only one outcome; we must expect widespread change in work practices, skills, business models and business organization.

Today Cloud Computing is “top of the hype curve” and whilst vendors and many enterprises are convinced this is the shape of the future, there remains considerable confusion over how the concept will eventually stabilize and mature. Whilst the economics of Cloud are compelling, any deeper comparison with simpler forms of utility are less useful because we must expect a range of solution patterns that span private, hybrid and public Clouds.

Today Cloud has two primary domains:

  • The successor to Utility Computing – rationalization and automation of technology infrastructure provisioning and operation. Prime movers include Amazon, Microsoft, IBM, HP and Oracle
  • Software as a Service (SaaS) providing multi-tenancy Web hosted applications. Prime movers include Google, Cisco, Salesforce.com but all application vendors are moving rapidly to embrace this delivery approach.

At the center of the Cloud computing universe we have the extraordinary example of Amazon – a company that has recognized the opportunity and acted to introduce a Cloud computing business model that represents a major step out from its core business, yet is highly complementary and revenue earning in an extremely short period.

The global Cloud computing market is expected to grow from $37.8 billion in 2010 to $121.1 billion in 2015 at a CAGR of 26.2% from 2010 to 2015. SaaS is the largest contributor in the Cloud computing services market, accounting for 73% of the market's revenues 2010. M&M Market Research October 11, 2010

We also note IBM, HP and Microsoft are investing massively in global Cloud utilities, which are clearly expected to be a core component of their future business models.  Many software vendors are converting their application products to software as a service.

So the questions for all enterprises are:

  • Is the impact of Cloud on the future business understood?
  • Is there a Cloud enabled business plan in place?

If the answer is no, then it is likely that your Cloud efforts are driven by technologists and accountants, and your business is probably digging a deep hole that is the wrong size, shape and in the wrong place!
In this report we provide an outline for developing a plan and roadmap that integrates the business and technology perspectives.  We show how Cloud is one dimension of a change program that needs to be coordinated with SOA and BPM and we describe maturity models that can drive roadmap development that enables business AND technology objectives and goals.

Amazon wasn’t only thinking about making it’s customers’ lives easier when it went in to the utility computing business. Like every sizable company today, it had been forced to purchase far more computing and storage capacity than it would ever use . . . to accommodate the burst of shopping during the week after Thanksgiving – even though that week only comes once per year.  Nicholas Carr, Norton Paperback, 2009

Continued in PDF

Document Download: Business Driven Cloud Strategy (pdf)

Description:

Cloud is rapidly gaining acceptance in the provisioning of utility IT resources, but we must look beyond the purely technology considerations to understand the broader implications and opportunities for business. In this report we outline a roadmap planning approach that integrates Cloud Computing, SOA and BPM in delivering new business models.

Type: pdf

File Size: 814KB

Published: 15 Dec 2016 12:19

 

You must confirm your screen name on your profile in order to comment.

Please sign in if you wish to comment.