Why you can't afford to resist the cloud

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.

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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

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

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38 comments
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  • RE: Why you can't afford to resist the cloud

    There are clear benefits, but the big drawback is trusting all these providers with your data and services. I know I absolutely hate the service providers I currently have (cell, phone, internet, cable TV) that the thought of adding more of these behemoths is not very appealing to me.
    lippidp
    • This co called "Move" to the cloud is more like a hard "Push"

      @lippidp

      Don't forget the Federal Governments participation either. Once the Feds decide to go after a business they will find a third party host provider far more cooperative about handing over and or granting access to a client's private data then if they had to deal with that client directly. Google and other internet based entities already comply with thousands of government requests for data, don't think for a second that these cloud providers will fight for your privacy as hard as you would yourself.

      The move to the cloud (more like push to the cloud) is the best thing that the Federal Government could have ever wished for.
      BlueCollarCritic
    • This co called "Move" to the cloud is more like a hard "Push"

      @lippidp

      Don't forget the Federal Governments participation either. Once the Feds decide to go after a business they will find a third party host provider far more cooperative about handing over and or granting access to a client's private data then if they had to deal with that client directly. Google and other internet based entities already comply with thousands of government requests for data, don't think for a second that these cloud providers will fight for your privacy as hard as you would yourself.

      The move to the cloud (more like push to the cloud) is the best thing that the Federal Government could have ever wished for.
      BlueCollarCritic
  • RE: Why you can't afford to resist the cloud

    I enjoyed reading the article ??? especially about the online applicant tracking system for enterprises. Your readers who run SMBs may want to check out a similar solution named Unrabble (http://www.unrabble.com) which helps busy hiring managers at SMBs make their next great hire.
    christophermharris
    • RE: Why you can't afford to resist the cloud

      @christophermharris The service you're promoting is 'similar' to just one part of the end-to-end service that Recruitment Genius offers, so personally I would not put it on the same level.
      philwainewright
      • That was just SPAM

        @philwainewright The poster is just faking the post as a way to promote his company. This is nothing but SPAM.
        wackoae
      • RE: Why you can't afford to resist the cloud

        @philwainewright Phil, correct, it is similar. But as the article mentions above, Recruitment Genius is focused on the enterprise, while Unrabble.com is focused on SMBs.
        christophermharris
  • RE: Why you can't afford to resist the cloud

    Gonna depend on the business. Some businesses are in the business of keeping secrets (think three letter intelligence organizations), and some businesses just have an unusual business model that doesn't fit.

    I honestly don't think it's right and proper to paint such wide brush strokes when the needs of businesses vary so much.
    CobraA1
    • RE: Why you can't afford to resist the cloud

      @CobraA1 are you saying you can't keep secrets in the cloud? What about encryption? There are ways of keeping data locked so that it's not viewable by the third party whose infrastructure it runs on. And by using the cloud, three-letter intelligence organizations can save money and get results faster.
      philwainewright
      • Encryption only works ....

        @philwainewright .... when the other side doesn't have the key.

        Admins for "the cloud" have full access to your data .... because they OWN the encryption keys.
        wackoae
      • RE: Why you can't afford to resist the cloud

        @wackoe Not necessarily. For instance, I use file backup/syncing service SpyderOak. All encryption happens on the local end before the data is transmitted. This means, unlike Dropbox, Spyderoak never sees your key and thus as they point out they couldn't view your data even if they wanted to. They give in to pressure and created web-based access to your files but ask users not to use it because they really don't ever want to see your password! Even logging into their forums involves the use of the client so that passwords aren't transferred to them.
        jgm@...
      • RE: Why you can't afford to resist the cloud

        @philwainewright ... Well, encryption could help but how do you know the servers operator doesn't have your key? It would only help if you did the encryption before doing the upload.
        Also, don't feel too complacement with encryption being a cure-all; it's NOT! With today's high end machines and speeds, encryption can be broken faster than you might think if the bad guy knows anything about it.
        If it's something you don't want read, don't puit it on the 'net where it goes through a dozen or so nodes between you and the cloud even, as any one of those nodes, especially your initiating server, can look at what is being sent (sniffing). Time to read some unbiased works on encryption/decryption.
        tom@...
    • I agree. alot of time the cloud works

      @CobraA1
      alot of time it fails you. It all depends on your business.

      Sure, cloud vendors will tell you "your business [b]needs[/b] the cloud to survive," but what they're really saying is that [i]their[/i] business needs you to move to the cloud in order for them to survive.
      William Farrel
      • RE: Why you can't afford to resist the cloud

        @William Farrel -

        Agreed. It is about the cloud providers.

        And when competition knocks them out of business, where does the data go...

        Get some popcorn because times are about to get interesting indeed...

        And I've not even mentioned security or intellectual property concerns yet!
        HypnoToad72
  • One gets a little tired of the threatening rhetoric

    "As the cloud matures, resistance isnt merely futile; ignore the cloud and you could find your business has bought a one-way ticket to the scrapheap."<br><br>The tone seems to be getting a wee bit desperate.<br><br>But what will win reason or marketing? Marketing obviously; it has better marketing.
    jorwell
  • Cloud is such a vague term

    Perhaps you can tell me if I am in the cloud?<br><br>Last year I wrote a generic interface that allows external users to access any view for which they are authorized in the database using an XML based query language and returning XML. <br><br>The database security is controlled in a manner similar to Oracle's virtual private database (as I believe is used by SalesForce) but we're not using Oracle.<br><br>Thus any authorized user can access any data in the part of the database that they can see. There are built in checks to prevent external programmers from attempting to write joins with nested loops in code - thus bringing the system to its knees.<br><br>The middleware consists of about 20 lines of code (still a little bit too bloated for my liking); all the logic is in the database. <br><br>Am I in the cloud?
    jorwell
    • Re: Cloud is such a vague term

      @jorwell 'Cloud' is just the generic name for the connected fabric of resources available via the public Internet.

      If your interface is accessed via the public Internet, then it's exposed to the cloud. But it's not *part* of the cloud unless it is made publicly visible in some way, for example by have a public Web page where anyone can sign up to apply for access. If it is open in that way, then other questions come up, such us does it have elasticity to be able to scale on demand to the variable load coming from a diverse userbase; and does it have a stable API and the ability to add new functionality without breaking the API.
      philwainewright
      • Yes and yes

        @philwainewright <br><br>It is available in the public internet, but you have to obtain permissions and these can be controlled down to any individual value (column and row) in the database.<br><br>There is no API; APIs are too tightly coupled and in any case I would see the whole idea of an application program as an outdated concept. <br><br>Instead of an API there is a query language which is of course inherently more flexible.<br><br>Adding new columns to the database views exposed by the web service will have no effect on existing applications (as is the case for all RDBMS based approaches). Changing the logic in the queries behind the views does not change the interface. <br><br>Defaults ensure that new columns don't break updates from programs. <br><br>RDBMSs have been "loosely coupled" right from the start, it's just programmers who keep writing tightly coupled applications on top of them (hello ORMers).<br><br>Basically you just use the RDBMS but allow it to be accessed via XML (or whatever web data transfer method is currently fashionable this year). The rest of the functionality you get free with the RDBMS.<br><br>So I don't think you need all this complicated stuff with people showing page after page of PowerPoint slides full of boxes with arrows between them and a huge fog of marketing gobbledygook to do cloud. Better to go for the architecture free approach.
        jorwell
  • RE: Why you can't afford to resist the cloud

    The problem with using the 'cloud' at work is it opens up a GIANT hole for data and information to escape. In secure environments or places where information must be secure (hospitals for example) this is a big issue.

    That said, if you want to try Dropbox you can use this referral link:

    https://www.dropbox.com/referrals/NTEwNjAwNTA5

    if you use that link to sign up you'll get 250MB BONUS on top of the free 2GB. I'll also get 250MB free.
    thinker_z
  • RE: Why you can't afford to resist the cloud

    Considering the potential for competitive advantage, strategic IT realignment and long term costs savings, going to the cloud should be a no-brainer. However, the key to success is having a solid plan and partners who make sense for your organization. Seek out partners who are stable, understand security issue and have the knowledge/experience to help guide your strategy development (jm.p/CTcloud). About me: j.mp/rLBg1R
    pfretty@...