Increasingly, cloud is seen as playing a disruptive role in outsourcing -- with on-demand cloud services enabling the rapid acquisition of functions that companies turned to traditional outsourcing arrangements to cover. That cloud is essentially digital outsourcing.
However, one analyst argues that despite such discussions, cloud is not well-suited to outsourcing at all. Bruce Guptill, analyst with Saugatuck Technology, says "we need to stop thinking about cloud as a source of scalable services, or as outsourcing of IT and business." Success in developing, using, and selling cloud, he states, "will be in positioning and using it to optimize workloads. Any other approach minimizes cloud’s fundamental value to the enterprise."
Workload optimization -- in the form of reducing acquisition and usage costs, while increasing speed to implementation -- continues to be the driving value proposition behind cloud. Guptill points out. Lower on the list of priorities and benefits is acquiring access to new services -- a la the outsourcing aspect. He bases his observations on recent Saugatuck surveys, as well as discussions with large-enterprise CIOs, CTOs, and cloud providers at the research firm's latest Cloud Business Summit in New York. (I also had the opportunity to participate in a panel discussion at the event.)
Positioning cloud to handle workloads with greater agility and elasticity typically is part of a carefully managed strategy, he adds. However, on the other side of cloud, service engagements are creating an unregulated chaos within many organizations. "Adaptation and adoption of these solutions into broader enterprise business workloads, operations and processes mostly occurs over time, unplanned and uncoordinated," Guptill observes:
"So on one hand, we have a clear need and demand to improve the ability of the enterprise to do business and build profitability. On the other hand, we have point solutions popping up as fast as credit cards can be presented and cleared, quickly building a jumble of function-specific capabilities that may eventually be brought to bear in a strategic manner on core enterprise business goals. The consensus among the 120+ participants in our 2012 Cloud Business Summit is that this is an untenable dichotomy that is increasing the costs of managing and doing business overall."
The continuing acquisition of cloud services outside the domain of IT is only creating "marginal or incremental improvements" in business operations, Guptill adds. The ease of cloud service acqusition by business units is creating a new spaghetti architecture repleat with duplication and underutilized accounts. The cost advantages of cloud are getting lost without an enterprise focus on what fits within business plans.