CLOUD COMPUTING STRATEGIC BUSINESS AND FINANCIAL IMPLICATIONS

The challenging economy made the cloud computing conversation especially relevant. The business and financial potential of cloud makes it a special trend for us to embrace. We will delve deeper into the full range of business and financial benefits later. The strategic business and financial implications of cloud are the focus of this article.

First and foremost,  with cloud computing, we have another avenue for realizing business agility, the Holy Grail of all business strategies. As with all technology trends, business agility is probably the most frequently mentioned goal of business and technology executives when they describe their strategies, and yet it remains the least realized in terms of execution.

We could even go so far as to say that a clearly articulated business or technology strategy that can deliver on that promise, that is clearly articulated, and has been incorporated into daily operations can seem as elusive as any mythological beast. Fortunately, this opportunity truly is different.

Cloud computing offers business agility in a simple, clearly understandable model: For a new startup or for emergent business requirements of established enterprises, cloud computing allows an organization to implement a rapid time-to-market model by securely accessing a ready-to-use IT infrastructure environment, hosted and managed by a trusted third party, with right-sized, scalable computing, network and storage capability, that we pay for only as we use it and based on how much of it we use. Hmmm, let me think about this a while . . . NOT!!!

We do not have to build or expand our data center (no construction of buildings, raised floor, energy and cooling equipment, building automation and monitoring equipment, and no staff); we do not have to buy any hardware, software, or network infrastructure (no dealing with the procurement hassles we are so accustomed to, especially with the inevitable delays in IT acquisition); we can rapidly implement a new business model or start a new company to address a new market need far faster than we normally could have; and we do not have to continue to pay for the cloud infrastructure and resources if we discontinue the project or if the company fails.

From a business and IT executive’s perspective, what is not to like about this business vignette?

There are countless new startup firms that have leveraged cloud computing models to obtain their IT infrastructure as a service, therefore enabling them to focus their limited funds and resource bandwidth on their unique technology and business model innovation.

Resource constraints are liberating in this sense, since they force new startups to leverage ready-to-use cloud resources as opposed to building a data center. These types of scenarios, of course, raise a number of business and financial implications that must be explored further.