I’ve been reading a bunch of articles on Cloud Computing and I think it’s something that you need to have on your radar screen.
If your the owner of a small to medium sized business or the CIO of a public or private sector organization, cloud computing will be knocking on your door sooner than you think. To get prepared you’ll need to understand what this newest innovation in a computing architecture is and how best to integrate it into your computing strategy.
In a way, cloud computing is a rebirth of the concept of time sharing but on steroids. For those of us old enough to remember, and I am, many towns had a company with a large mainframe computer that shared it’s services among many businesses in their community. I believe I’m correct that time sharing was the idea that Ross Perot first embraced when he started Electronic Data Systems (EDS). My initial experience with time sharing was when I worked for Penn Central Transportation Company shortly after the conveyance of the railroad to ConRail. Penn Central was still in bankruptcy and couldn’t afford it’s own mainframe, so we purchased computing services through a local time share company.
Setting up a time sharing operation, however, was no simple task. You needed to order and get installed a high speed line (in those days a T-1 circuit) between the time share company and your offices. You also needed to install your proprietary systems on their computer. It was a complex relationship and the quality of service was sometimes less than desirable.
Oh but I date myself with the timeshare comparison and a more current example of this concept is “Utility Computing (UC)”, a term used just a few years ago. The Cloud is really that concept matured. A major constraint in the deployment of UC was resource accounting. Hopefully this has matured to the point that makes the cloud a true utility in nature and not just the outsourcing of the data center.
The cloud is a wholly different experience and can be implemented in some instances by individuals with no technical expertize. Take for example Tien Tzuo who recently founded an on-line billing company called Zuora in Redwood City, California. In a lead story on Innovation in the Christian Science Monitor, Mr. Tzuo explained that his firm implemented Google Apps for a whole range of computing services including e-mail, document collaboration, shared calendars, chat and instant messaging. Although the article didn’t mention it, I assume that his on-line billing system, accounting and other business applications were also implement in the cloud.
Another extremely interesting use of cloud based computing was from the article by Bill Snyder of CIO entitled “Cloud Computing: Tales from the Front”. The article includes a description of a project where the New York Times used Amazon Web Services (EC2 and S3) to generate PDF files of 11 million articles for it’s archives in less than 24 hours using 100 EC2 instances. Can you imagine how long it would have taken and how expensive it would have been to do this in-house?
These two examples represent the two extremes of how I believe cloud based computing will evolve. For the small to medium sized organizations, they will find that they can obtain top quality computing services for little to no capital investment, at a much lower cost and have incredibly more flexibility in meeting their expanding or contracting needs.
For large public and private institutions, cloud computing will most likely lead to the demise of the central IT organization. The premise for centralized IT was based upon its economy of scale in computing. The cloud will eclipse this advantage of the central IT organization, with the result being the return of control of IT services to the organizations being served. The central IT organization will evolve to be the manager of the cloud computing relationship(s), the purchaser of IT assets such as desktops and laptops, and some of the IT customer service functions.
A key question for CIO’s is their role in this transformation. Will they throughly research this new option, develop a strategy to take advantage of it where appropriate and lead this transformation? If this will lead to the dissolution of the CIO’s empire, does he or she have any incentive to get engaged? Maybe it’s best to throw up road blocks, how about security or for that matter reliability? My own feeling is it’s better to be in the tent evaluating and leading the assessment than being viewed as an obstruction by my customers.
Moving to cloud for many organization with an embedded infrastructure will be akin to outsourcing and will not eliminate the CIO’s role, just continue the shift that been underway. More focus on the business and on ensuring the commodity providers of computing services are doing so in a fashion that is efficient and effective for the enterprise. Clearly, this requires real competence in being able to run IT like a business.
One final thought, before you sluff off cloud computing as simply a fad that will pass. Consider some of the players entering the field. They include: IBM, Apple, Google, Amazon and Microsoft for example. Also think about how this plays into the concept of software as a service and not a product. I’d be giving this innovation considerable thought and attention.
William A. Crowell, Principal
Magellan Associates, LLC