Thursday, October 23, 2008

Dynamic IT

CIO Magazine just surveyed 173 IT business leaders to gauge what the common attitudes are towards cloud computing in the enterprise. 58 percent indicated that cloud computing will dramatically change the IT business, and 47 percent said they are already using it. On the other side, 18 percent think that cloud computing is a fad. survey

CIO used the broad definition of cloud computing: "a style of computing where massively scalable IT-related capabilities are provided 'as a service' using Internet technologies to multiple external customers". Other terms used are "on-demand services", "cloud services", "Software-as-a-Service".

The survey confirmed that cloud computing is a solution to the need for flexibility in IT resource management. IT needs flexibility and cost savings, but is unwilling to jump in with both feet until some lingering concerns are addressed: the top concern being security.

Cloud computing will be used in many pilot/proof-of-concept projects by the incumbents, and it will be experimented with as full blown business models by a growing cadre of start-ups. We have described this many times in this blog that the cloud computing model will be driven by the small and medium business segment because they value cost savings over security or SLAs. And typically with technologies that offer dramatic cost savings, when successful, there will be carnage among the companies that are holding on too tightly to old fashioned business models.


Patrick said...

I enjoyed your comment "Cloud computing will be used in many pilot/proof-of-concept projects by the incumbents.."

Particularly in light of Microsoft's recent news that they will offer a web services platform. I'm curious to get your take on these developments.

Best regards

Theodore Omtzigt said...

We had been expecting this from Microsoft: Since they are slowly losing their grip on the office software space they had to make a move. With this move they basically are taking the lead again and others will have to catch up. I think this is a very good move by Microsoft and one that can protect their office product brand. If you look at the functionality of Office compared to Open Office, the Microsoft suite is more capable but with a steep sophistication curve. Most people just want a simple editor and spreadsheet and never come close to use the functionality in Office. With the cloud progression you can layer this sophistication more easily since you have a more powerful revenue model. All in all, kudos to Microsoft for having taken the lead.