Cost reduction alone cannot be the only economic justification for cloud adoption. To change the economic model, it is critical to look at what cloud adoption creates in the way of new business models and transactions.
The hybrid cloud concept is an important step toward this new paradigm. In a hybrid cloud environment, some resources are managed and provisioned in-house or in hosted private cloud environments, while others are delivered by public cloud services. This could be Web 2.0 or business-critical applications hosted and supplied by the service provider, for example, which integrate with customer data that is kept internally within the customers' own data center. The idea is to use virtualization, application programming interfaces (APIs) and specialized cloud server platforms to create the hybrid environment and provision and monitor the applications and services running in it. One obvious benefit of this approach is that private cloud service provision can be augmented by public cloud computing and storage resources to handle spikes in demand.
However, cloud-based business models, especially for enterprises and SMB, come with their own sets of challenges. Heavy Reading's primary research clearly shows that performance remains the biggest concern for large enterprises to run specific applications in a virtual environment, followed by stability and manageability. Cloud computing providers have their work cut out to convince many organizations to move away from the traditional client/server architecture to the new virtual computing environment.
From managing internal business processes to interacting with business partners and customers, enterprises increasingly realize that in order to run their businesses economically they need to fundamentally change ways in which they operate their businesses in the connected IP world. We believe the following business imperatives challenge traditional enterprise IT and cause them to evaluate the applicability of various cloud-based infrastructure services and applications:
Optimizing network resource and capacity management: As a company grows, the scalability of the its network can become a daunting challenge for enterprise IT when addressing issues associated with capacity management and planning. In most cases, enterprise IT tends to over-provision systems and provide more network resources than is required. Leveraging cloud-based computing resources can help enterprise IT prepare for the unpredictable growth without over-provisioning resources. Cloud providers can also utilize variability of demand and workload to use excess capacity effectively. With effective software infrastructure cloud providers can reduce time-of-day variability to the extent that they are diversified amongst geographies and workload types.
Catalyzing collaborative culture: The connectivity revolution enables corporate businesses to take advantage of increasingly dispersed networks as corporations continue to grow in size and geographical coverage. For distributed enterprises, competitive advantage is no longer about a single core capability. It is the collective knowledge of the company to induce service innovation and create new business opportunities. Collaborative tools such as application-sharing and video conferencing are increasingly becoming an integral part of enterprise communications, weaving into the fabric of the organization.
Control of IT environments: IT organizations are faced with a dissolving power base as line-of-business executives are gaining control of their IT decisions and budgets. This is evidenced in the areas of SaaS implementation. From testing and deploying SaaS, a majority of company-wide SaaS deployments are spearheaded by individual initiatives at the department levels. The power shift in corporate IT will open windows of opportunity for cloud service providers to gain momentum among line-of-business managers within corporations.
Time to market is a critical business priority: With growing competition, companies of all kinds are racing to keep pace with ever-changing business requirements. Although speed to market can help companies mount their competitive edge, it often requires a major overhaul of the existing deployment tools and network re-engineering to shorten the deployment and delivery cycle. The deployment of cloud-based services can significantly reduce the time required for service deployment. Companies can scale their applications or deploy multiple servers within minutes by simply clicking a few buttons.
Collaboration "The connectivity revolution enables corporate businesses to take advantage of increasingly dispersed networks as corporations continue to grow in size and geographical coverage. For distributed enterprises, competitive advantage is no longer about a single core capability. It is the collective knowledge of the company to induce service innovation and create new business opportunities. Collaborative tools such as application-sharing and video conferencing are increasingly becoming an integral part of enterprise communications, weaving into the fabric of the organization."
The collaborating power over hybrid clouds is the one that moves me the most. Most offshore companies have difficulty in sharing data (because some of them are real time data and if not supplied in real time, the data loses value) with the parent company, and uploading them into one proper cloud system would ensure that the real time data is delivered in real time. However, a cloud system has its problems of internal security. What kinds of accesses will employees have and what kind of information would leak out as a result of whistle blowing (since anybody can take in the data)?