Cloud computing is here to stay and it will change the way you do business forever.
The Cloud Computing Promise
It was just five years ago that Cloud Computing promised the potential to:
- Cut costs through being able to eliminate hardware investment and align costs to your operational model.
- Enable services to be delivered on demand, where and when we wanted it providing the speed to deploy quickly and efficiently and to dynamically deliver services to your customers
- Deliver Scale through services that were elastic in nature and provided IT resources when they were needed.
- Improve productivity as IT resources were to be managed by the data centre or infrastructure provider, no longer would organisations be held to ransom by Internal IT.
- Provide improved performance through secure data centres that used the latest operating systems and virus protection.
- Improve reliability through better systems for data backup, disaster recovery and business continuity.
Against this potential there were three issues that were continually raised by business owners and senior management which they believed would hinder their adoption of cloud based computing:
- Privacy obligations as to the storage of your data on a third party’s hardware which may not be physically in Australia.
- Data Sovereignty or the control of a company’s data and access to it by foreign governments and:
- Access to high speed internet.
While the issues of Privacy and data sovereignty still exist, there has been a concerted move by the major suppliers to establish data centres in Australia, thus ensuring the application of Australian law for Privacy and Data sovereignty.
Combined with the recognition by the market that cloud based providers either as private or public networks provide a higher level of data security than in house systems there has been an increasing acceptance of the cloud as a basis for housing systems and applications.
The rollout of the NBN provides a better platform and the necessary speed for cloud based systems and in turn the systems being deployed are not data intensive usually being deployed as web based applications.
The result shown by a recent survey of end users for mid-market ERP system indicate that new purchases are more than 70% in the cloud. The Not for Profit (NFP) sector has been leading the way.
There are five drivers that stand out
Reducing the capital required for Infrastructure:
- Cloud enabled businesses to outsource their infrastructure; the servers, storage and networks thereby reducing their need for capital and conserving funds within the business. While there are still operational costs these are less over a five-year investment horizon than on site purchase.
- Cloud based solutions have also automated the process of operating and application upgrades and allowed users to take advantage of the latest technology, applications and security tools.
Less need for internal IT Skills:
- Cloud computing removed the need for in house expertise to maintain and run the infrastructure and created a new class of IT specialist who were cloud savvy and who didn’t work for you and were part of your operational infrastructure cost.
Improved integration and interoperability:
- Became second nature as single purpose applications like finance, warehousing payments, POS through Application Protocol Interfaces (API) became connected and were further enhanced through their ability to become an integral part of platforms such as Google Apps and Office 365 and the soon to be released Dynamics 365.
Productivity through improved workflows:
- Organisations that moved to the cloud were forced to review their key processes and many have make significant productivity gains in capturing customer data, processing transactions, managing key resources and inventory and improving their ability to drill down and report dynamically as the result of the workflow integration.
- On platforms such as Microsoft’s Azure and Office 365 the level of integration has enabled the better use of the Office tools and Email to deliver real productivity gains.
Mobility improves the customer experience:
- Cloud based systems have facilitated the arrival of be anywhere, do anything mobile systems. From banking to invoicing to sharing data, documents and images the cloud delivers mobile access to customers.
What this means is that the Cloud has forced organisations to rethink the way they do business and who they partner with in this new environment.
Rethinking requires you to consider what applications and integrations need to be placed in the cloud. It doesn’t mean that every application and all your data resides in the cloud. Some applications are not cloud ready or you may have recently invested in on premise infrastructure and it doesn’t make financial sense to move to the cloud.
Finding the right vendor is critical. Independent advice that assists you to select vendors that have the experience and the expertise is critical. In some instances, you need an infrastructure partner while in others you will need to focus on your major operational and financial systems. If possible, a vendor that provides a blend of technical and application expertise rather than pure system integrators is preferred.
A final word, for many businesses the key driver for cloud computing was cost, the need to reduce capital spend and to avoid the lumpiness of a typical IT budget and staffing costs.
Decreased costs are now a given. The driver today is the need to integrate, be connected, drive efficiencies and leverage technology rather than have technology drive you.