Weekly Update

Is the value of cloud computing more about information sharing than flexibility?

According to Visiongain, total revenue for the global cloud-computing services market will reach $35.6 billion by the end of 2013, driven by increasing adoption of cloud services from the enterprise side. While this is yet another indicator of the growth of the cloud computing market, perhaps it’s time to ask ourselves what the true benefit of cloud computing actually is. It could well be something different than what we originally thought.

We’ve all heard the party line: Companies are held back by an inflexible and complex IT infrastructure that cannot keep up with the evolving needs of business. This results in slow deployment of business-critical applications and services. So, cloud to the rescue?

Cloud computing is clearly able to solve some of these issues, which are that IT shops are bogged down by the inflexibility of legacy technology with the inability to expand and change. However, the larger value of cloud-computing technology could be something we’ve yet to understand or value: the ability to freely share information.

The use of cloud-based platforms typically means that we centralize information assets onto private or public clouds. Doing so provides a common platform for the information, along with much easier paths to share this information in ways that are much more effective for the business, as well as for the humans that run it.

Take, for instance, a larger manufacturing company. By moving to a mix of private and public clouds, a business with more flexibility and a more cost effective way to deliver core IT services is achieved. While the operational costs will be reduced by 15 percent over the next five years, which is good, the ability to quickly adapt the company’s IT assets around changes to the business actually provides more value. Again, the value of business agility.

However, as a byproduct of moving to cloud-based platforms, this manufacturing company has also moved a considerable amount of its business data to clouds. This data is now accessible using well-defined services that are easily leveraged from any number of platforms and devices. In that way, the centralization of the data along with the ease of access has a value that has yet to be defined.

All you have to do is to look at the growth of data placed on clouds to understand this opportunity. For instance, Figure 1, from a recent Seagate post, depicts the growth of storage in terms of exabytes shipped, and the allocation of those storage systems for cloud and non-cloud use. “To put this into perspective, in 2010, 62% of data storage was shipped into the client market. Seagate projects that by 2020, data storage will dramatically shift to the cloud, accounting for 61% of all data, and two-thirds of that data will be in personal clouds.”

Figure 1: As our storage requirements grow, much of our business data will shift to centralized cloud-based resources which also provide open mechanisms for consumption of that data. 

 hdd_capacity

Source: Seagate 

So, with the migration of the data to cloud-based platforms, we have a better ability and greater opportunity to share more information. However, for most enterprises, it’s a wasted opportunity. Perhaps the value is misunderstood, or lost in the hype around “the cloud” that is focused on efficiency and agility.

Back to our manufacturing company. During its migration to the cloud, the company made it easier to externalize core business information — inventory data, sales data, and productivity data. Information such as inventory and sales statistics was less available in the past. A side benefit of migrating that information to centralized cloud-based platforms is that it becomes more available to any application on any platform or device that can communicate with that interface, which most can.

This is an improvement in dealing with mostly proprietary and complex interfaces, which often had restrictions on the ways to reach the data. A core complaint of most who leverage business systems is the inability to access the right information at the right times.

Therefore, the end game in moving to cloud-based platforms is perhaps one where information, as an asset, is more widely understood and thus valued. We can get at most core business information, as needed, and in near real time.

Moreover, we can mash that information up with other external information assets. Perhaps we’ll learn if falling sales are dependent upon economic indicators, or other patterns of data that are available from other cloud-based services.

The objective? Once data is in the hands of those who most need it, they will figure out creative uses to provide even more value to the business. We’ve been freeing information within clouds for the last few years, and this trend will certainly continue. As the information becomes more accessible and pervasive, the clear value of cloud computing could indeed be something that was once undervalued or not even considered. The value of sharing information could be the most valuable byproduct of moving to cloud-based resources.