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BLOG: Cloud Computing and the Road to Disruption

Andrew Milroy | Oct. 22, 2012
Few executives truly believe their industries will be impacted in the same ways as businesses that involve the trading of digital content. This is a huge mistake.

When the subject of cloud computing is raised, there is often a healthy suspicion from IT buyers that cloud is a marketing term which is used as a new way of selling complex, unproven solutions to them. This is not surprising, considering the history of the IT business. There is an alarmingly high incidence of IT projects failing to meet expectations and running massively over budget.

Cloud commentators, myself included, tend to focus on the transformative and disruptive impact of cloud computing. We tend to talk a lot about Apple, Amazon and Google and how they have completely disrupted the media and music industries, using cloud technologies. This makes a lot of sense when engaging with executives from these industries. However, executives in other industries have yet to see a profound disruptive impact caused by cloud computing and few of them truly believe their industries will be impacted in the same ways as businesses that involve the trading of digital content. This is a huge mistake on their part.

Early stage

Within most enterprises in mature markets, cloud computing is still at an early stage of adoption. Technology infrastructures within these enterprises are characterised by the increasing use of virtualisation and ad hoc public cloud use. This public cloud use is usually driven by business units and not IT departments. For these enterprises, cloud services augment their existing non cloud-based technologies.

There is increasing evidence to suggest that this is the first stage of cloud computing adoption and that most of these organisations will soon shift sizeable workloads onto cloud platforms. In this phase, cloud use permeates throughout the organisation, supported and enabled by IT departments. IT departments may initially seek to block the ad hoc use of cloud services by business units.

But, over time, as senior executives become exposed to cloud services that offer them benefits, IT departments are usually forced to find ways of enabling the use of cloud services across the enterprise. As this happens, IT departments typically develop policies and procedures relating to the use of cloud services within the organisation. These policies and procedures enable the spread of cloud services more extensively. Extensive use of cloud-based technologies, in many cases, creates more complexity for enterprises as they need to find ways of integrating these technologies with their legacy investments.

Business agility

The third phase of cloud computing is characterised by cloud-based technology becoming the norm and business agility being realised. In this phase, cloud technology has worked its way through the organisation. It underpins innovation and is used to differentiate one organisation from another. It can be termed the innovation phase.

For example, in this stage, organisations discover that cloud technologies can automate more processes and engender more self service. A great example is the low cost airline business. Low cost airlines such as Jetstar are constrained by assets in small airports. They have limited space to manage the check-in process. Their business model also drives them to 'sweat their assets' as much as possible so they seek to maximise the use of their aircraft by limiting the amount of time that they are idle.

 

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