Cloud disruption

Cloud computing is a disruptive business model innovation which is changing how computing is delivered and consumed. Cloud computing has dramatically accelerated in its impact over the previous ten years.

The initial complacency and denial displayed by incumbent IT suppliers and IT professionals has given way to a grudging acceptance that the world of IT has changed forever.

The speed of adoption of cloud computing by firms ranging from start-ups to large corporates and governments is testimony to the power of the key benefits of lower costs, stronger security and a platform for innovation.

An external provider of computing resources, namely, a cloud services provider, is able to deliver a higher quality of computing, at a lower cost, than almost any individual organization.

A typical internal IT department is no match for the single-minded business focus of a cloud provider, hewn into a lean and fit competitor by crushing market forces.

Cloud computing poses an existential threat to traditional IT. There is only a short-term salvation from creating a firm’s internal cloud. Once the firm’s leaders fully understand that internal cloud costs are still fixed and that most of the benefits of external cloud computing have eluded them, the consequences may be dire.

After all, putting lipstick, in terms of a “cloud” moniker, on the “pig” of internal IT, will not transform any economics.

The preoccupation of some King Canute IT professionals in fighting a rear guard action against an external cloud is understandable from a personal job preservation point of view. However, it is short-lived at best and will only hurt their employer by denying the business the benefits of an external cloud.

Many non-IT employees, in frustration, do an end-run around traditional IT by subscribing to cloud services that help their particular job function. This “shadow” IT presents many challenges with uncoordinated and uncontrolled expansion.

By turning away from their “keeping the lights on” roles, IT staff members have a last chance to reorient themselves into high added value contributors before traditional IT career opportunities atrophy completely.

Embracing cloud computing will, arguably, enable IT-related innovation to be accelerated well beyond what was ever possible with traditional IT.

Cloud computing offers the opportunity for organizations of all sizes to access unlimited sources of computing power to apply to almost any task, and turn it off when not needed.

This means, for example, that a single person start-up can orchestrate the equivalent of a supercomputer to solve a problem, and only pay for what is used.

Any software start-up is now able to access effectively infinite scalability to deliver their software.

Never before in the history of computing has such an opportunity existed.

Previously, the high capital expenditure and operating costs of supercomputers placed them beyond the reach of all but the largest corporates or government agencies. Now, supercomputing power is available on-line for anyone with a valid credit card.

Conversely, traditional on-premise “perpetual license” vendors are scrambling to adjust to the new world. Traditional hardware vendors from Intel to IBM, Dell and HP are struggling to cope in the new order.

Who would have believed in 2005 that Amazon would, by 2014, become one of the biggest IT businesses in the world?

All of these changes are symptoms of the “creative destruction” process, whereby the old way of doing things transforms into the new.

We all now have an exciting challenge and opportunity to leverage the unbounded computing capacity offered by cloud computing to enrich our lives and society.

Featured in NZTech Newsletter, March 21 2014