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Home > Blogs > Anthony Harrington > Cloud computing changes everything

Cloud computing changes everything

Finance IT| Cloud computing changes everything Anthony Harrington

If you were the CEO or the finance director of a major corporation, would you feel comfortable betting your business on a cloud? Probably not. Yet cloud computing is starting to transform IT in a way that finance directors are going to love. No more huge upfront capital costs for hardware and software. Instead, everything will be on a pay-as-you-use basis and with vendors competing to drive down user costs, IT could well end up being as much of a commodity as heat and light.

Why is cloud computing so different to the IT that has characterised the last two decades? What gives the cloud the power to transform IT is that it removes the point to point connection between the data center and the user, and does so far more drastically than, say, mere remote working. If a service can be delivered from anywhere to anywhere, then one large data center can deliver services to vast numbers of users. The only prerequisite is that there has to be sufficient capacity in the network for the end user performance to be good, and preferably, excellent. No one wants to hit a key or click a mouse and then have a serious lag before something happens.

Are networks good enough yet? Not quite, for the most part, but they are getting there. What does it take for cloud computing to work, besides the network (which of course, can be wireless as well as fixed wire)? Security and 24/7 availability are both huge issues. If you are trusting your data to the cloud, you want to be perfectly sure that it is going to be available whenever you need it. Same with your applications. And you want to be absolutely certain that no unauthorised access to that data is possible.

In a Sunday Times piece by my fellow QFINANCE blogger Ian Fraser back in September 2009, Ovum senior vice-president David Mitchell argued that there are interesting parallels between the attitude of business towards IT today, where companies feel impelled to own their own systems, with the attitude of businesses 100 years ago towards electricity generation. “At that time companies did not trust the national grid and so everybody wanted to have their own generator,” he pointed out.

Speaking at the Paul G. Allen Center for Computer Science & Engineering at the University of Washington, Seattle, Microsoft CEO Steve Ballmer argued that cloud computing is the inevitable “next step” coming out of the twin inventions of the microprocessor and the Internet. He pointed out to his audience that not only is Microsoft betting its business on the future of cloud computing, “pretty much everybody in the technology industry is betting their companies on (the cloud)”. Some $3.3 trillion dollars globally is being invested, he estimated, in driving cloud computing forward. That is very serious money, and business leaders need to start familiarising themselves with the kind of transformation that the IT industry is planning for them.

However, just getting the applications you already use in a cheaper, less capital-intensive way does not begin to describe what the cloud is about. It really is worth reading Bulmer’s speech in its entirety. What he wants is a “cloud that learns”. For example, he identified eight numbers that were important to him in his effort to understand the US healthcare system in the light of the new US healthcare reforms. They included how much in total is spent on healthcare annually, how much of that gets spent on older people, younger people and so on. He pointed out too that right now you can throw the problem to a search engine and get a million links back. He doesn’t want a million links, he wants eight numbers. That takes intelligence that the cloud doesn’t have yet. It will in three to five years, he suggests. That is worth thinking about for a bit.

He points out too that the cloud adds, or will add, massively to the ability of small inventors and designers to reach global markets. Catalogs are going to be ever huger and searches are going to be much, much smarter. This has implications for design teams, for how intellectual property is managed, for collaborative working that extends way outside the enterprise.

The internet, in that sense, is simply the plumbing, the cloud is the heart and soul of the next IT revolution and the somewhat scary and rather exciting thing is that it is already swirling around our feet. Game-changing transformations are likely to be the norm as it kicks off, which is something of a real threat if you are already number one or two in your market and want to say there. In that sense, the cloud demands careful vigilance from established players in every sector if they don’t want to be blindsided.

Further reading on finance IT and finance innovation




Tags: cloud computing , Finance IT , information technology , innovation , intellectual property , search engines
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