Cloud and business transformation: this time, it's different

The cloud may not be delivering everything being promised, but it is nonetheless a disruptive force to which enterprises, service providers and vendors alike ignore at their peril. 

That's one of the takeways from a panel I had the opportunity to join at the latest CompTIA Breakaway conference, addressing ways to cut through the fog of cloud computing, led by Bob Dirkes of TechImage.

As Bob roved the audience Oprah style, he put a question out there that surely is on the mind of every seasoned IT veteran with at least a decade or more experience: we hear about all this business transformation that's now going to take place thanks to cloud computing. But the phrase "business transformation" gets uttered every time vendors and analysts are pushing some new paradigm, be it PCs or client/server or Web computing or whatever.

Why is it different this time, or is it any different?

My colleagues on the panel all provided great and thoughtful responses. 2112 Group's Larry Walsh pointed out that cloud is destroying far more jobs and channel relationships than it creates. He also said that the process of transformation doesn't mean it comes to some sort of conclusion at some point -- it's a process that is ongoing, and will remain so without end. FierceCIO's Caron Carlson also sees new forces shaping the IT landscape because of cloud, taking note of the rise of "rogue IT" that needs to be reckoned with. Greg Gillespie of Health Data Management pointed out that there is potential to for cloud greatly reshape healthcare delivery once regulatory hurdles are addressed.

My response to Bob's question was that cloud is transformative, but for reasons beyond efficiency and cost-savings. Yes, cloud -- as has any and all forms of automation over the years -- means replacing manual tasks with machine-driven tasks, which means fewer jobs in a particular area. And, yes, cloud is a new way to cut costs and gain efficiencies.

But the real revolution is only just begun. Many of the points I mentioned I've raised previously at this site, and I'll raise them again: At the high end, private and hybrid clouds are shifting the business models of many non-IT corporations and organizations, turning them into technology or cloud providers themselves. At the lower end, we have a whole generation of startups and small businesses that are built entirely on the cloud.  In between, we have "loosely coupled" corporations that essentially serve as brokers of services they get from somewhere else and deliver to their customers.

Here's how cloud is changing the way we do business -- something unheard of previously in the technology space:

Every company now an IT company: Non-IT companies are becoming cloud providers, supporting processes -- many of them potentially revenue-generating -- for outside users. They may not call themselves "cloud companies," but that's what they're doing. In the IT world, cloud is blurring the lines between the vendors who provided technology products and services, and the customers that consumed them. Companies that have built and maintain their own private clouds are extending these services to partners and customers. Many already do -- consider the fact that Amazon was an online retailer that began to offer its excess capacity to outside companies.

“Loosely coupled corporations”:  The term “loosely coupled” came into vogue with service-oriented architecture a few years ago, meaning an entity or system stands fine on its own, but can be dynamically linked to other systems to complete new processes. Cloud computing is paving the way for the loosely coupled company – which may be an entity that exists purely as an aggregation of third-party services, provided on an on-demand basis to meet customer demands.

"Extremely lightweight businesses": Why invest tens of thousands of dollars in servers and software when everything you need is right in the cloud? The availability of cheap cloud computing may be laying the groundwork for a new generation of XLBs, or "extremely lightweight businesses." This applies to departments of larger organizations as well -- being able to design new products without waiting for approval from corporate finance and IT.