The disruptive nature of cloud computing

The disruptive nature of cloud computing

Summary: Cloud computing not a disruptive technology in and of itself, but a disruptive IT delivery model which leverages key technology ideas to deliver IT in a much more efficient model.


Over the past decade, numerous shifts in business have been described and hyped – for better or for worse – as “disruptive.” Playing off the term coined by author and Harvard Business School professor Clayton Christensen in 1995, true disruption occurs when an innovation in technology or business model unexpectedly displaces an established one. Examples include: the light bulb vs. the gas lantern, the mini steel mill vs. the vertically integrated steel mill, iTunes vs. purchasing CDs, and digital cameras vs. film.

In the IT industry, we have a history of self-proclaiming a “disruption” with the advent of new technologies and solutions, but only a select few have withstood the test of time and proven to be genuinely disruptive. For example, the introduction of Internet standards such as HTML and HTTP forever changed the face of computing, both inside and outside the enterprise. Linux and open source changed the way technology giants like IBM, Microsoft, Sun Microsystems and others operated their businesses. Now it’s becoming clear that another entry can be added to the pantheon of truly disruptive innovations: cloud computing.

The rise of cloud computing could radically change the way companies manage their technology assets and computing needs. With the continued exponential growth of electronic data, the information infrastructure that exists throughout the world today will not be able to keep up with ongoing demand. It simply doesn’t make sense – from both an economic and environmental perspective – for organizations to build more expensive, energy-hogging data centers to handle computing requirements of today and beyond. This is why cloud computing is an attractive option for enterprises and why the concept has built up so much momentum in recent years.

Peering through the hype to see real value for the enterprise

The buzz around cloud computing has reached a fever pitch. Some believe it is only hype because it uses established computing technologies, which is true. But that is exactly what makes cloud computing work – it is not a disruptive technology in and of itself, but a disruptive IT delivery model which leverages key technology ideas (like grid computing, utility computing and Software as a Service) to deliver IT in a much more efficient model. Because of this, cloud computing has undeniable characteristics of a truly disruptive innovation.

First, cloud computing turns the economics of enterprise IT on its head. Delivery of IT services (including infrastructure, platform, and applications) from the cloud has both capital expense advantages and operation expense advantages. The ability to pool resources, virtualize them, and then dynamically provision from the resource pool yields a much higher utilization rate and thus better economics -- sometimes from 15 percent to 90 percent utilization, according to IBM research. The cloud aspects of standardization and automation greatly reduce the overhead required to deliver IT services. By focusing on a few common IT configurations (like software stacks, storage allocations and application options), and then automating the provisioning of these configurations, the amount of labor required to deliver that service is greatly reduced.

Second, the cloud model can yield better results for the consumer of an IT service. For example, at IBM, a compute cloud was built for researchers to develop and test applications. Before the cloud, if the researcher needed a small network of servers and storage to conduct research, it could take weeks to deliver on the requirements. The IBM Research Compute Cloud gives researchers access to systems in mere minutes. The more usable and approachable IT becomes, the more it can be leveraged for new ideas and innovations.

So, cloud computing provides enterprises with a two-fold solution: from an organizational perspective, the cloud delivers services for consumer and business needs in a simplified way, providing unbounded scale and high quality of service that drives the potential for growth and innovation. From a user’s perspective, it’s a means of acquiring computing services in a simpler, more responsive model and without having to fully grasp and understand the underlying technology. It’s an effective service acquisition and delivery model for IT resources, and if properly implemented within an overall technology strategy, cloud computing can help improve overall business performance while controlling the costs of distributing IT resources to the organization.

Leveraging the Internet to change the world

Furthering the argument around cloud computing as a disruptive force is the fact that it’s transforming the way individuals harness, access and utilize technology. And as cloud-based services are delivered via the Internet, it realizes many of the far-reaching promises and ideals that were associated with the World Wide Web as it began gaining widespread adoption nearly two decades ago.

Bridging the so-called “Digital Divide” has long been a goal in the Internet age, wherein technology becomes a conduit for leveling the world’s playing field between have’s and have not’s. With the rise of cloud computing, this goal becomes more attainable as a result of innovative cloud projects and applications. Examples can be found across multiple industries, most notably in the field of higher education.

Educators and technology experts at North Carolina State University (NC State) are currently embarking on an initiative to provide every student in the state – from kindergarten through college – with access to advanced educational resources. This is made possible by a cloud-based technology developed at NC State called the Virtual Computing Lab (VCL). Through the VCL, students in K-12 schools, along with colleges in the North Carolina University system and other institutions in the state, will be able to access valuable learning content, select software applications along with other computing and storage resources. This initiative is designed to apply cloud computing technology to the broader objective of democratizing education for students in North Carolina and around the world as similar projects modeling this approach emerge.

At a more basic level of responding to day-to-day business demands, cloud computing is delivering innovative solutions to organizations in numerous fields, from healthcare to telecommunications, to retail and others, spanning enterprises of all sizes. Those taking advantage of cloud computing recognize the tangible benefits of this unique technological approach. They’re not standing pat while the world around them changes. They’re boldly embracing the next generation of computing service and choosing not to shy away from the disruptive nature of the cloud.

Undoubtedly, cloud computing will continue to grow in the years ahead. And when industry observers of the future look back at these early days of adoption, they’ll recognize the tectonic shift caused by cloud computing, which has both transformed enterprise IT delivery and established the Internet as an effective enterprise computing platform.

Ric Telford is Vice President, Cloud Services, IBM.

Topics: Hardware, Cloud, Virtualization

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  • Maybe a little overstated don't you think?

    Let's really think about the amount of disruption from 1-10 on these examples: Gas Lamps to Light bulbs 10, nobody uses gas lamps anymore. Steel Mill example, maybe an 8 or 9. Open Source a 7 because even those that haven't used it benefitted from it. iTunes to buying CD's, that's more like a 4 or 5 tops...people still buy Cd's, or download illegally, or other options; many more then say buy DVD's instead of VHS tapes for example, which I would still only rate about a 5 or 6. But cloud computing? Maybe a 2 or 3 at best.

    It's a good idea, don't get me wrong. So were Beta tapes compared to VHS. But disruptive? No, it's a little early to say that. Like iTunes vs. CDs, people are not always using iTunes no matter how cheap and easy a song is to get.

    Look at it this way...I bought a really great can opener once that opened the cans from the side of the lid. No sharp edges and resealable. But it didn't fit all the cans and sometimes didn't work. So I bought another regular can opener and most of the time used it instead.

    Smaller companies don't really benefit as greatly as larger ones from cloud computing. Cloud computing causes managers to loose control of their own data and that also may stand in it's way. The most important is that it is still too juvenile to know whether companies like Microsoft will take over the whole industry and run the concept into the ground.

    Sometimes over time simple and cautious may be better and win out over something that seems conceptually better and more economical. Technology that is disruptive is huge, not just interesting, high tech, or the newest fad.
    • Small business doesn't benefit from cloud computing?

      I would argue that small businesses have
      benefited greatly from cloud computing.
      Amazon's services apparently save tons of money
      in startup costs for web businesses. Google
      Apps saves tons of money for businesses that
      want e-mail and portal services without the
      licensing and maintenance costs associated with
      in-house services. There are some great CRM
      resources online now that deliver services that
      used to be unattainable for small businesses. I
      would even suggest Monster for its online
      resources that offload recruiting and
      compliance costs.

      I don't know how cloud computing is formally
      defined, but I think that any service that is
      available in real time on the web could
      probably be considered a member of the cloud
      computing group.
  • RE: The disruptive nature of cloud computing

    Many activities are underway to shape/reshape Internet use as you all know it. Over the last year some of you have been made aware and/or have seen activities on throttling in the news or in your daily lives. Another CRTC proceeding relating to the Internet in Canada required Telecom providers (Bell/Telus/etc.) to provide ISPs with wholesale service speeds that match those that they offer to their own retail customers. Specifically, Bell has been directed by the CRTC to provide matching speeds which would allow us all to have more flexibility in our day to day online requirements. Instead of adhering to these directives, Bell decided to take this issue to the federal Cabinet and at the same time file a tariff application with the CRTC proposing to introduce Usage Based Billing (UBB) on its wholesale customer accounts.

    What does this mean for our consumers of geospatial data?

    Bell provides resellers with last mile, wholesale DSL access services, which resellers uses to provide you with your Internet access. If Bell were to be allowed to introduce UBB on this service, a cap of 60GB would be imposed on all of its users, with very heavy penalties per Gigabyte afterwards (multiple times more than our current per Gigabyte rate of $0.25/GB on overages). This would inherently all but remove Unlimited internet services in Ontario/Quebec and potentially cause large increases in internet costs from month to month.

    Impact on Cloud Computing ?

    Given that GIS data sets are GB in size and often TB in size, the cost to use cloud computing becomes expensive to use.

    The internet has become a main source of location based services, geospatial data, and sharing of data when it is needed to support critical infrastructure management services. Coupled with streaming of live video from the site 60 GB is quickly becoming a small amount of data. Capping, reducing, and throttling the consumers access to data, inhibits the growth of the cloud computing. Caps should be increases - not decreased to enable effective use of cloud computing capabilities. Capping data is essentially denying access to information to everyone except those who can pay. Read it and weep. Bell gets to charge resellers UBB.

    Cloud Computing is now a distractive technology - interesting in concept - probably the right way to go - but the new business model introduced by UBB now makes it cost prohibitive
  • RE: The disruptive nature of cloud computing

    Does it really matter if cloud computing ( a cousin of ASP and hosted computed from the "old" days)is considered disruptive? Based on our work with clients, there is a continuum of opportunity for business to adopt applications based in the cloud. A variety of situations exist that justify use of applications such as productivity/workflow tools, performance measurement applications or enhanced customer service processes.

    The real bottom line for users - can cloud based applications make my business more productive, reduce costs or enhance the customer experience?
  • The Risk of Cloud Computing

    As the previous posters have pointed out there are several issues associated with adoptation of cloud computing or even online storage.
    Cloud computing CAN be very usefull in the development stages of product implementation, by I for one would NOT put my daily operations, or critical data in the hands of an entity that may or may not meet my stringent security or availability standards, and this includes the internet, the ISPs, the ASPs and the Cloud vendors.

    As of now, Cloud computing can reduce the overhead associated with new product development and testing, but there is a long road ahead before I'd stake my business or my client's business on something that is named after one of natures most unstable formations.