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What are cloud services uniquely good for and why? After all, CIOs aren’t going to leverage online services offered on demand just because they’re available, but for compelling business reasons. There are helpful compilations of use cases (PDF) from a technical viewpoint; here I’ve identified key cloud rationales from a strategic perspective.
Different people have different definitions of the term “cloud,” but I’m referring to common and flexible services, applications, platforms, content and resources delivered from a public provider. The lion’s share of the reasons I list below apply to most of those definitions, as well as other online/web services.
Communication: Whether email, IM, tweets, plain old telephone service or video over IP, utilizing a cloud service for communication provides economic benefits over private solutions because it’s cheaper to connect to a hub or network once rather than have multiple point-to-point connections. Think about how the airline industry uses a hub-and-spoke model to optimize flying routes.
Collaboration, Community, and Commerce: Web-based networks and commerce platforms offer people the chance to share, conduct business and collaborate within a trusted third-party-provided environment. The cloud, therefore, allows communities and social networks to foster ongoing relationships around shared values, goals and interests.
Commons and Collections: Sharing partially or intermittently used resources provides more for less. Be it the public library, the Magritte Museum, or an online encyclopedia, providing collections of information or apps are a natural cloud function.
Continuous Cross-Device Access: Information that’s on an unshared or occasionally offline device may be inaccessible to anyone, including the owner. But information in the cloud can be securely accessible to any authorized user — or to a user’s multiple devices — over any network.
CapEx and Cash: Cloud services may be more cost-effective because consumers and even large enterprises may not have sufficient economies or statistics of scale compared to large service providers. But even if cloud services aren’t comparatively cheaper, they can help reduce capital expenditures. And while using cash for capital expenditures by itself isn’t bad, it’s a poor choice if the firm then doesn’t have sufficient cash on hand for daily operations, or if purchased assets are either insufficient to handle demand or underutilized — which is often the case. Like a broken watch that has the correct time only twice a day, fixed computing assets rarely have the right capacity.
Complementary Capacity: Hybrid clouds that augment owned resources with on-demand pay-per-use resources can achieve a sweet spot of minimal cost with maximal flexibility. Much in the way that retailers complement employees with temps prior to holiday shopping, enterprises can cloudburst their applications or leverage cloud storage across a variety of data networks into service provider clouds.
Continuity and Center Migration: As a special case of capacity augmentation, consider a smoking hole disaster at an enterprise data center. Just like staying in a hotel if your house burns down, cloud capacity can provide temporary capacity until full restoration has been achieved. Or, just as you might stay in a hotel after selling your old house while waiting to move into your new one, clouds can support data center migration, temporarily housing data, applications or services.
Checkpoints and Chokepoints for Congestion Control: Filtering out invalid transactions at the perimeter is a key function of security in the cloud. Network-based firewalls and anti-DDoS are like a coast guard or border patrol. They provide scale to repel attacks and reduce transport costs by dropping invalid traffic at the earliest point possible: ingress at a perimeter. Reducing congestion is also a cloud-based edge function; traffic management of IP packets helps to ensure that the system doesn’t experience a traffic jam.
Context and Capabilities: To better focus on core, mission-critical tasks — such as program trading platforms for brokers or drug discovery for pharmaceuticals — IT shops can benefit by outsourcing non-core functions such as HR and CRM.
Celerity: Cloud services can accelerate the speed of development via platform-as-a service and the speed of testing and production deployment via rapid provisioning of on-demand resources.
Consistency, Currency and Control: Information must be accurate, consistent, and timely. Applying corrections once to a master document or file in the cloud eliminates conflicting versions across multiple locations. Applying software updates once in the cloud beats distributing patches to 100,000 desktops.
Combinations: Of course, the options above are not mutually exclusive, but can be used in combination. For example, a microblogging site that provides a foundation for connection and communications also fosters a community and creates a collection of information. If that site also has access to on-demand computing capacity in the cloud, it can stay up through a popular event that would normally overwhelm its own servers.
Joe Weinman is Strategy and Business Development VP for AT&T Business Solutions.