Leveraging cloud computing for new business enablement

Leveraging cloud computing for new business enablement

Summary: In yesterday’s Forbes.com HP VP and CTO Russ Daniels wrote a short commentary on how cloud computing can help reignite the global economy and his focus is what makes the difference.

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In yesterday’s Forbes.com HP VP and CTO Russ Daniels wrote a short commentary on how cloud computing can help reignite the global economy and his focus is what makes the difference. Where Russ differs from many others on cloud computing in that he is talking about the vision from a higher, business level than most others, who are down in the IT weeds most of the time. Where Nick Carr talks about cloud computing sending corporate data centers to the trash heap, Russ is looking at what new business opportunities can be enabled by the cloud.

It’s important to be careful, though, in articulating new business enablement that truly is leveraging the key differentiators of cloud computing (pay per use and elasticity) from the normal outgrowth of the Internet. MagCloud is a good example, Snapfish is not (but Animoto is). The key difference is that cloud computing is logic processing on the Internet that is paid for only when it is activated and can scale as large or small as needed at the time it is needed. And this logic processing is your applications – not mashups, SaaS or leveraging others’ work. Sure you can use SOA to string together other people’s logic but it’s the business process you design in SOA that is cloud computing.

The key to building the ideal business model for cloud computing is the tight correlation to revenue generation. If you have to do a lot of logic up front – before you get paid for it – cloud computing may not be the best fit. This is especially true if your business model results in a heavy persistent logic footprint. Pay per use models are never cost effective if constantly consumed. Variability is what makes them attractive.

What new business models are you bringing to the cloud? Forrester is actively researching enterprise case studies of cloud computing and wants to hear your story. Contact me if you have a good story to tell or come meet with me at Forrester’s IT Forum in Las Vegas, May 19-22.

Topics: Virtualization, Cloud, Hardware

James Staten

About James Staten

James Staten is a Vice President and Principal Analyst at Forrester Research, serving Infrastructure and Operations professionals.

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3 comments
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  • Variability?

    Variability... how much is enough to justify moving into the cloud?

    EVERY business application system out there has some level of
    variability. How much is "enough"? Is a nightly batch job that
    consumes CPU for 2 hours enough? Is month end activity enough?
    What about year end or 1-2 seasonal jumps in usage?

    The way I see it this is really a function of the time it takes and cost to
    spin up and down resources. Ideally, the "grid" could throw another 8
    cores at that nightly job with the only cost being usage, but all the
    current offerings I see out there are really just pushing out chunks of
    processing power similar to renting a new server.

    It seems to me that cloud computing [u]today[/u] is a way to flatten
    the costs of spinning up and down a server and take managing
    depreciation out of the equation. Not only that, but now you have less
    influence over reactions to service disruptions and drops in levels of
    service. Each organization needs to weigh all these factors and more
    when investigating the cloud choice. They really need a calculus to
    identify the threshold where owning/outsourcing makes more sense
    then renting.
    Marcopolio
  • RE: Leveraging cloud computing for new business enablement

    Reginite global economy??? well, I will be attending the Azure track at TechEd09 to gain udnerstanding of more realistic advantages with Azure and hope to share my initial thoughts.
    Imagen137
  • RE: Leveraging cloud computing for new business enablement

    There are many ways to use "cloud" technology. The main thing is where to use it and how to use it to take the best advantage of the solution. Give some of the solutions a try and see which ones meet you requirements. Design a strategy to move some DR or Staging or Dev/QA needs to a cloud solution. I have tried Amazon and RackSpace Cloud, but really found more of what i needed from the OpSource Cloud product. Use Promo code DMC01 (they don't seem to expire their promo codes) and check it out. Compare and find the cloud that best fits your needs.
    TechMac87