Why you can't afford to resist the cloud

Summary:Large and small enterprises are creating new business opportunities through their use of the cloud, at the expense of those who are slower to adapt.

While many are still digging in their heels against moving to the cloud, they're finding it harder and harder to do so. Not only because the business case becomes stronger every day, but also because cloud platform providers are acting to address the objections that used to slow or stymie adoption. This week saw Amazon provide another hook between its AWS cloud and enterprise data centers with the launch of its Storage Gateway appliance, which makes S3 storage look like just another iSCSI interface in the data center. Yesterday VMWare announced multi-cloud capability for its Cloud Foundry platform, eliminating provider lock-in for organisations that run their apps on the platform. Of course there are bad ways as well as good ways to use these hybrid tools, but that's a topic for another post. The key takeaway is that cloud providers are taking steps to allay many of the concerns that have been raised in the past by enterprise IT buyers.

Meanwhile, it's the business case that provides the compelling argument for going cloud. Yesterday, I heard two fascinating accounts from opposite ends of the enterprise spectrum about the transformative effect of cloud in their businesses. Both were speakers at Cloud Expo Europe in London, providing more grist for the mill of my forthcoming book about the emergence of frictionless enterprise. I was attending as a speaker on behalf of cloud platform distributor Boston [see disclosure].

Banking multinational HSBC was at one end of the spectrum, demonstrating that transformation isn't just for small, green-field enterprises. It was a delight to hear the enthusiasm and confidence of Barry Childe, head of research, innovation and delivery for the bank's global banking and markets division. His presentation talked about how cloud allows an organisation to reduce complexity, dramatically lower costs, and provide the best IT solutions to its business units — not just in theory but based on the bank's proven experience. "This is not vapourware, this is about delivery of end solutions," he insisted.

While he's not allowed to publicly cite metrics, Childe did say that the bank's cloud projects had more than lived up to expectations, stating: "I would consider our performance as exceptional." I wondered whether those cloud-powered IT solutions were simply a matter of helping the bank do better what it had always done, or were some of them going beyond the bank's traditional activities? His reply to my question was emphatic: "We're doing things we could never have dreamed about a few years ago."

At the opposite end of the scale, startup CEO Geoff Newman described how the cloud has helped his company grow from an investment of less than £10k to become a multi-million-pound business in just two years. Recruitment Genius is what I would call a classic frictionless enterprise story, finding its niche by using the cloud to take friction out of the recruitment process — its service posts a company's job ads to a tailored selection of online job boards, filters the responses and provides an online applicant tracking system where recruiters can sort the CVs and arrange interviews.

Behind the scenes, its use of the cloud to drive its infrastructure is equally game-changing. All staff work virtually, using Gmail, Basecamp, Dropbox and Voipfone to collaborate. The company stores its applicant CVs on AWS, saves its Java code libraries on Google Code and runs its SQL database on Azure, with all files backed up to JungleDisk. It hosts its other servers on UK cloud hoster ElasticHosts, its videos on Vimeo and achieves a distinctive web presence with online fonts from Monotype Imaging's fonts.com. Even the programmers that develop the company's online functionality are hired on-demand using the cloud and are paid by the hour. "We're able to scale our workforce and our cloud computing as necessary," said Newman.

With its lean infrastructure and operating costs, and its direct connection into online job boards and social media, Recruitment Genius is hollowing out the business model of traditional recruitment agencies — as the company says on its website, "In 2009 we realised we had smashed our own recruitment agency model, but in its place was something far more exciting and effective."

There's a warning there for everyone that attempts to dismiss the cloud as a fad or as just another means of delivering IT. Those who really seize its potential are creating entirely new business opportunities — not only start-ups like Recruitment Genius but also big established firms like HSBC. And those initiatives are stealing business away from others that are slower to react to what's going on. As the cloud matures, resistance isn't merely futile; ignore the cloud and you could find your business has bought a one-way ticket to the scrapheap.

Topics: CXO, Banking, Cloud, IT Employment

About

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant. He founded pioneering website ASPnews.com, and later Loosely Coupled, which covered enterprise adoption of web services and SOA. As CEO of strategic consulting group Procullux Ventures, he has developed an evaluation framework t... Full Bio

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