COMPASS MAGAZINE #11
COMPASS MAGAZINE #11

BUSINESS ON THE CLOUD Mobile, social and big data convergence on the cloud is a competitive game-changer

The technology landscape shifts constantly, but the changes happening today – supported by the cloud’s innovative technology and processes – are transforming the ways companies do business. As small companies grow skilled in harnessing the cloud’s advantages, large companies are discovering that each day they delay may be costing them competitive advantage.

Businesses have been quick to notice consumers’ love of mobile and social apps, racing to integrate both into their business models. Big data, too, especially in data-rich industries like retailing and healthcare, is making inroads. And the cloud is driving and enabling all of these technology trends. With mobile, social, big data and cloud converging to transform the way business gets done, at least two leading technology analyst firms – IDC and Gartner – have named the phenomenon. Focusing on the convergence itself, Gartner calls the trend “The Nexus of Forces.”

IDC, meanwhile, emphasizes the new computing model that enables the convergence, which it calls “The Third Platform” and predicts will give rise to a rich new layer of industry-specific solutions.Regardless of the name, both the Nexus of Forces and Third Platform concepts are driven by the same reality: the way computing – and, by extension, business – gets done in the 21st century is undergoing a radical transformation.

THE SMALL AND THE SWIFT

The cloud’s rising tide isn’t floating all boats equally. Small and medium businesses (SMBs), which for decades have lagged large enterprises in their access to technology, are outpacing their bigger cousins in the race to “go cloud.”

Unlike the First and Second platforms, cloud computing doesn’t require big IT budgets, staffs, or data centers. Consequently, the price of starting a technology-intensive business has dropped with a resounding thud. Hardware and software can be rented by the month, and providers offer as many support services as an organization can afford. Anyone with an idea, a credit card and an Internet connection can sign up for space on a server, rent an application or two (or build their own) and go into business.

With barriers to entry significantly lowered, the convergence of cloud, mobile, social and big data is spurring innovation, growth and a bumper crop of businesses. By 2018, IDC Chief Analyst Frank Gens predicts, a third of today’s Top 20 market-share-leading companies “in most industries, beyond the IT industry, will be disrupted by new competitors and reinvented incumbents that use the Third Platform to create new services and business models in their industry.”

Why are these upstarts a danger to today’s most successful companies? The answer may lie in a 2013 survey sponsored by cloud provider Rightscale (based in Santa Barbara, California, USA), which found marked differences in the rates at which large and small companies are adopting cloud technologies. Its “State of the Cloud 2013” report found that among small and medium businesses, 41% are already heavy users of cloud computing, with only 19% still in the experimental stage. In contrast, among large enterprises with 1,000 employees or more, only 27% reported heavy cloud use, with 32% still in the earliest, experimental phase.

While large enterprises study and watch, the report found early adopters are reaping the benefits that could be competitive game-changers. Among cloud-mature users, about 80% report faster access to infrastructure and improved scalability; less than 30% of cloud novices can claim the same. About 60% of cloud-mature users report improved IT staff efficiency and expanded geographic reach; less than 20% of cloud novices are getting these benefits.

"INSTEAD OF FITTING WORK INTO TOOLS, CHANGE THE TOOLS TO THE WAY PEOPLE WANT TO WORK TODAY.”

JOHN HERSTEIN Senior Vice Presidentfor Customer Service, Box

“It’s not just cloud internally or cloud externally, it’s cloud everywhere,” Gartner Vice President and Fellow David W. Cearley observed in a video announcing the company’s Top Ten strategic technology trends for 2014, led by the four Nexus of Forces technologies. “A hybrid cloud is the future, and IT’s role in being an adviser, broker, provider and integrator across that hybrid environment is a key trend. The Nexus of Forces is important because these trends drive a disruptive future in IT.”
 

WHY THE CLOUD?

John Herstein, senior vice president for customer service at cloud storage and collaboration vendor Box (based in Los Altos, California, USA), notes that IT departments traditionally bought software and hardware for a Second Platform reality: people working inside four walls. Today, Herstein said, mobile and social applications are the norm and big data is growing, yet many companies still try to support these new work patterns with legacy systems. “Instead of fitting work into tools, change the tools to the way people want to work today,” Herstein advised delegates at the 2013 CITE Conference.

Many IT experts, accustomed to a world of racking and stacking servers, implementing patches and updates and total control over the computing environment, are struggling to accept the move to cloud, said Stephane Maarek, North American vice president at France-based cloud infrastructure provider Outscale. But the advantages become obvious when you understand the technology that underpins cloud, Maarek said.

“The promise of a cloud infrastructure is to deliver new products and solutions faster and cheaper,” Maarek said. “Resource elasticity and infrastructure automation tools are unique to cloud deployments and are now leveraged by more advanced and dynamic teams, allowing them to reduce costs and time-to-market.”

A demonstration of the cloud model’s power can go a long way toward convincing even the most skeptical IT pro, Maarek said. “A picture may be worth a 1,000 words, but a demo is worth a million.” When Maarek demonstrates the cloud’s capabilities, he points out that a company will need days or weeks to add even a small cluster of servers to a Second Platform model. Outscale, however, can enable 1,000 Windows servers in less than five seconds. It’s an example, he said, that tends to convert cloud skeptics into believers.

STUMBLING BLOCKS

Still, many large enterprises struggle with their top concern about cloud computing: security (see related article on Page 52). The “State of the Cloud” study, however, found that security concerns decline as cloud experience grows. “Although security is the most-cited challenge, the percentage of organizations that report security is a significant challenge decreased from 38% of Cloud Beginners to 18% of Cloud Focused,” the report found.

Challenges with governance, compliance and integration to internal systems also were about 50% lower among cloud- experienced companies than among beginners. “The more organizations learn about how to work in the cloud, the more they understand how to address cloud-associated challenges and the easier cloud becomes.”

Sharon Wagner, CEO at Israel-based Cloudyn, which helps organizations better understand their spending on cloud resources, says that companies must begin to make the transition to cloud at some point. That transition will require IT professionals to reconcile themselves to trading some measure of control for the cloud’s many benefits.

“There will be a point [when] they will need to make a decision to invest in more hardware – to invest in something that is not core to their business – or give up a little on security and leverage advantages in the cloud,” Wagner said.

EXECUTIVE CHEERLEADERS

When the price of entry was higher, corporate IT departments could allow change to evolve slowly. In today’s instant-access world, however, many executives are pushing their IT departments to change faster.

Stephen Orban, CTO at financial markets information provider Dow Jones and Company, points out that, for the first time in computing history, an organization’s employees can easily provision software without support from corporate IT. “Everyone in every organization is a back-seat [driver],” Orban said at a recent conference. “Everybody who works understands technology well enough so that they should have influence over what we build.”

That change, Orban said, has forced him to be more innovative and inclusive. As a result, he is transitioning to more agile development processes and moving many of the company’s private-data-center operations to the cloud.

As executives like Orban are discovering, the advantages of cloud computing – and the risks of failing to exploit them – are just too great to ignore. While no one suggests that a business shut down its data center tomorrow, experts do recommend that they begin the transition. As indicated by IDC’s predictions about the disruptions awaiting a third of the Top 20 companies in most industries, organizations that are too slow, no matter how good their reasons, risk being undermined by the small and the swift. ◆

“RESOURCE ELASTICITY
AND INFRASTRUCTURE AUTOMATION TOOLS ARE UNIQUE TO CLOUD DEPLOYMENTS AND ARE NOW LEVERAGED BY
MORE ADVANCED AND DYNAMIC TEAMS.”

STEPHANE MAAREK North America Vice President, Outscale

Ron Miller is a freelance technology journalist, blogger (byronmiller.typepad.com), and editor for several tech publications. He is a co-founder of socmedianews.com and has been writing about cloud since 2008.

by Ron Miller Back to top
by Ron Miller

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