Get Your Head in the Clouds

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By John Spencer

There’s a really big game changer happening in information technology these days that’s going to have tremendous impact on you and your company. How big? Some say as big as the Internet. What is it? The cloud.

You may have heard rumblings about this “cloud thing” from some of your peers. Or, you may have caught a wisp of the idea in conversations overheard at a business or social function. It’s getting a lot of buzz, and it’s coming very fast. Let’s take a look at what all the fuss is about and how it’s going to impact you and your organization.

I like to think of cloud computing as simply storing some of your files, and using some of your applications, on a computer that another company rents out for this purpose. You can then access your files or applications online when you need them. Okay… some IT folks want to make it more complicated than that, but if you think of it in this way you’ll be on the right track.

Or, if you prefer to get a little more technical, you can impress your colleagues and use a current Wikipedia definition of cloud architecture as follows: “It is difficult to pin down a canonical definition of cloud storage architecture, but object storage is reasonably analogous.” Honest. Look it up. You might also have to look up (as I did) canonical!

If you want to use a simpler analogy you might be better off thinking of the copy shop across the street. That’s where a number of different companies all share the use of the printers, they pay for only the services they need, and the cost of the machines and services are spread amongst all the companies.

Companies have offloaded their printing needs for certain jobs to the print shop. In order to remain competitive the print shop has to keep buying the latest and greatest printers.

In a similar fashion, in order to remain competitive, your organization has probably had to keep upgrading its computers and has trashed older, slower computers. With the advent of cloud computing, you don’t need to do that. The cloud providers will need to upgrade their computers in order to keep you as a customer and stay competitive. They spread the costs amongst all the companies that use their services. And, they also have to keep their prices low to stay in the game.

Michelle Obama/FBI Problem

Is your corporate data going to be secure in the cloud i.e. with a third party company? This is usually the elephant in the room when people start talking about using a cloud computing model. Is your data really secure if you turn it over (offsite) to be managed and protected by another organization? Yes and no.

Turning over your files to a third party does come with some inherent risks. You rely on their security features to protect your data from getting into the wrong hands. Information is vulnerable to either intentional or unintentional breaches of security. One example is the breach of security that led to the posting on the Web of credit information about prominent U.S. figures including Michelle Obama and the head of the FBI Robert Mueller. Oh, and ok, Paris Hilton. Hmmm… if their credit reports and personal information isn’t safe with a third party, whose is? We are in fact all vulnerable.

However, let’s also consider how vulnerable your current, in-house IT environment is to security breaches. For example, what if you had a rogue programmer or disgruntled employee – as happened in a recent case I was privy to – who was determined to inflict damage on your organization? And, let’s not forget about the Wikileaks case which was also “an inside job”.

One IT security expert told me recently that he was in a meeting where a cloud provider was being challenged on their product’s security features by an organization’s CIO. Unfortunately, when the vendor’s security features were compared to the ones currently in place in the customer’s organization the vendor’s security features proved (embarrassingly) to be far superior and less vulnerable to malicious attacks.

Bottom line? When cloud computing is provided by a reputable vendor the data is often as safe as or safer than many in-house systems currently in place. This doesn’t mean that there won’t be security breaches. It will happen. However, remember, it’s in the vendor’s best interest to have the most current security features in place to protect both their clients’ data and their reputation.

The Tsunami Cloud

In a recent conversation with an IT executive he told me that the cloud is going to be “like a great tsunami hitting the Canadian IT landscape.”

He said there’s a huge tidal wave coming that’s going to sweep across Canada and change forever the way we use and interact with IT. There have been early adopters, but now the cloud is being embraced at an amazing rate. What’s happening to cause this phenomenon? In a word …benefits. Here’s a sampling of benefits and why organizations are taking a closer look at cloud computing:

Reduced Capital Expenses – all organizations (including government agencies) are trying to minimize capital expenditures. When they’re forced to buy new servers or add storage capacity this impacts the bottom line. The cloud shifts this paradigm into a pay-as-you play model and the costs come out of an organization’s operating expenses.

Less Hassles – companies can scale as their business grows without buying new infrastructure (see point above). Also, many of the headaches typically associated with software license renewals, buying new hardware, negotiating new contracts etc. goes away.

SMB’s Can Ramp Up Fast – small and medium sized businesses can grow and leverage the power of the cloud without having to worry about the usual expenses associated with H/W, S/W and IT personnel. In fact, the cloud means that many smaller firms can scale and grow as fast as they want and not have IT expenses hinder their growth plans.

Enhanced Capabilities – pre-built apps and the ability to handle mass amounts of data (called “big data”) provides unprecedented opportunities to mine and analyze data and gather business intelligence. For example, healthcare providers and pharmaceutical manufacturers can use mass amounts of data generated by government and private agencies to help them research cures and improve the overall well-being of Canadians.

These benefits and others are contributing to the explosive growth in the cloud marketplace. For example, Gartner reports that worldwide cloud application revenue reached $22.9B in 2011 and is projected to reach $67.3B by 2016.

The Resistance

It’s inevitable that more and more corporations will look at these benefits and start to explore cloud computing. What will be the reaction to all of this by their in-house IT departments? As you can imagine, there will often be resistance. After all, these folks have a vested interest in keeping a tight grip on the IT ship, and the cloud tsunami wave is going to rock that ship very, very hard. It’s a perfect storm, and it will be perceived as a threat in many ways.

That’s not to say that many of these professionals have not done a fantastic job in the past, it simply means that their role is changing and people naturally resist change. Most organizations will need to maintain an IT department, but the cloud will change forever the way they’re used.

And, for some, the cloud will be welcomed. For example, one CIO I talked to said the cloud was “liberating.” He said that it freed him up to focus on the real value he could bring to his organization. He felt he was now positioned to help move the vision of his colleagues in the Boardroom forward without constantly being concerned with the cost of new technology and being the naysayer in the room e.g. “we’ll we need more servers to do what you want to do and we can’t afford them.”

The New Frontier

In some ways cloud computing is the new frontier. In other ways it’s not that new. Chances are you’ve already been using the cloud with emails, online banking, or any other of the myriad of Web 2.0 apps that are available. Until now we’ve simply said that were using the web, or an online system. Now the term “cloud” has been introduced into our vocabulary and embraces many of these activities and so much more.

If you want to get a better sense of what it’s all about I’d suggest exploring Microsoft’s cloud offering called SkyDrive – there are similar offerings by other vendors but this is the one that I use. I use SkyDrive to share files such as PowerPoint and Word documents, build apps, and as backup for the most important files that I have on my laptop. In many ways it’s a smaller model of what all businesses will be using the cloud for in the future i.e. sharing files, using applications, and collaborating with colleagues and customers in the cloud. Give it a try.

Game on! 

John Spencer is an entrepreneur and management consultant offering a unique, cloud-based approach to strategic selling. His website can be found at www.strategicpursuit.com. His most recent corporate position was as Executive Director with Oracle Canada, responsible for creating sales strategies that would position them to grow their business on a national level.

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