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Analyzing “The Cloud: Battle of the Tech Titans”

CV on ‎03-15-2011 06:52 AM

Last week I read BusinessWeek’s cover story “The Cloud: Battle of the Tech Titans.” This reminded me when I joined Hewlett Packard 30 years ago. The first minicomputer had been released a couple years earlier and we all went around explaining that “the mainframe was dead” as companies now had a low-cost and easy-to-manage alternative. We were completely wrong. Thirty years later, the mainframe is still around and well.

The Cloud (in the Amazon, Google and Microsoft Azure sense of the term) is taking a position in the market, but to complement the existing world rather than to replace it. In medium to large enterprises business people will not pay for their critical IT services with credit cards any time soon. Start-ups are and will until they reach a certain critical mass when they will want to have more control over their own destiny.

Let me first square a couple things away. Is “Private Cloud” not cloud? It’s the evolution of the data centre; it uses virtualization, standardization and automation. Actually, whether you use the NiST or Gartner cloud definition, nothing excludes the private cloud from being considered cloud. It’s true, it’s more an evolution than a revolution, and so may seem less appealing. But regardless of what it is being called, private clouds will be out there for a long period of time.

Public clouds are way cheaper than private ones. Does that statement really hold true? Every calculation we did demonstrated the contrary when we included all costs on the public side, not just the advertised cost. Because public cloud is like the budget airlines, what you end up paying does not bear resemblance with the advertised numbers. Actually McKinsey came to a similar conclusion a couple years ago.

Security and compliance are barriers to moving to the public cloud highlighted in the article, as the latest survey demonstrates once again. The discussion is not whether the Amazons and Googles of this world are secure or not, but it is the lack of transparency about the security measures that are in place, that make CIOs hesitate.

Now, with all of that being said, is there a place for the cloud? Definitely, but the cloud will allow us to do new things, not replace most of the existing IT environment. Information Technology increasingly becomes a key component of how the business is run. And that is where cloud will most probably play a role. Let me give you some examples:

  • In their latest release of the 2020 Future Value Chain Project, Cap Gemini highlights the need for renewed collaboration in the supply chain and the engagement with technology-enabled consumers. These are two ideal areas for cloud computing. A simple example they give: by leveraging supply-driven shopper insights based on near real-time transaction and inventory data at store level, DANONE Dairy and Carrefour have improved on-shelf availability by 6%. Cloud as a platform for collaboration, whether in supply chains, in healthcare, in product development, is a definite go. The cloud allows multiple companies to interact while each pays for its use of the platform. Sounds too good to be true.
  • As business and IT increasingly intermingle, developing new offerings to customers, building on the power of the cloud, changes perception. Let me give you a simple and personal example. I use a Palm Pre 2 in my daily work and had to reset the device a couple weeks ago. To my utmost surprise nearly all my settings were re-established as soon as I logged into my Palm profile. The device actually backs up the phone automatically in the cloud and uses the backup to re-establish your mail settings, your applications, etc. I didn’t know about that feature, it just appeared as a nice surprise. Many such examples are possible, as the cloud becomes an inherent part of our user experience.
  • Over the course of five to 10 years, we moved from not having enough information to data overload. Massive amounts of data are available on the Internet. Analysing it is of the essence to understand the direction business is going, where markets are moving and how to build lasting competitive advantage. Increasingly you will see cloud-based analysis services helping you transform these zettabytes of data in meaningful information.

And I could go on like this. Having demonstrated there is place for both cloud and traditional environments, let me now address the public and private cloud differences. Public cloud is a consumption model. Credit cards are used by the “titans” highlighted in the article. They make it the perfect “shadow IT” as I highlighted in a previous blog post.

Actually there are two ways to look at cloud:

  • It’s an environment where users can consume services that are available upon request. Whether those users are employees or consumers doesn’t matter.
  • It’s an environment that provides users with services in an agile but secure manner.

The first view is the one of the consumer who does not care about how the services are provided, where they come from, what level of security is provided, whether they are compliant with regional legislation etc. The second one is the view of the CIO, who has to care about security, compliance, service level agreements, etc.

In their enthusiasm of presenting the cloud as a paradigm shift, many people over simplify things and forget a number of the responsibilities of IT that the “titans” do not provide.

So, will there be a battle of the tech titans? I’m not sure. The “co-opetition” model will definitely be tested to its limits, but ultimately all will find their place.


Related links:

HP Cloud Computing

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