30/04/2012

By David Terrar, CEO Of D2C Limited, Co-founder Of Cloud Advocates

In March Microsoft published research findings it had commissioned from analyst firm IDC on the global impact of Cloud Computing. The report indicates that computing will create nearly 14 million new jobs globally by 2015. It goes on to predict that revenues from cloud innovation could reach $1.1 trillion per year by 2015, which, combined with cloud efficiencies, will drive significant organizational reinvestment and job growth.

Announcing the report finding, John F. Gantz, chief research officer and senior vice president at IDC said:

"For most organizations, cloud computing should be a no-brainer, given its ability to increase IT innovation and flexibility, lower capital costs, and help generate revenues that are multiples of spending. A common misperception is cloud computing is a job eliminator, but in truth it will be a job creator – a major one. And job growth will occur across continents and throughout organizations of all sizes because emerging markets, small cities and small businesses have the same access to cloud benefits as large enterprises or developed nations."

As he explains, initially people often think of cloud computing only in terms of cost savings, reducing the size of your own IT department and shifting the emphasis so those kinds of resources (including jobs) are being shared more efficiently by cloud providers across many customers. That's true but it's only part of the equation, and it highlights a current trend in the way Cloud Computing is being considered and deployed by organizations of all sizes. There are two types of Cloud approach.

The first is retrofitting existing IT solutions in to the Cloud, and so making use of infrastructure and sometimes platform as service offerings to bring benefits and savings. However, the business solutions being deployed are the still the same old software, but with some of the running costs reduced.

The second approach makes use of public Cloud offerings, new business models, new ways of connecting with customers and partners, and in particular, new ways of using the underlying data (by the customer or by the provider) - depending on the application this is where the real innovation and the biggest benefits can be found.

Often larger companies, with larger IT departments and a healthy portfolio of existing software consider the retrofitting option first and go for some easy cost savings. It's ironic that start-ups and smaller companies with less of a legacy approach can more easily exploit the new Cloud way of working and leapfrog their bigger competitors straight in to public cloud solutions and embrace the full range of benefits, innovation and new ways of working they provide. This is where the expansion in jobs and the new revenue streams highlighted in the report are to be found

The major IT players like Microsoft have a balancing act to perform as they embrace and try to manage the disruption that the new paradigm brings. They have to protect their existing software and maintenance revenues from their traditional operating systems and Office software at the same time as bringing on new Cloud services like Microsoft Office 365 to compete head to head with Google Apps. It isn't surprising that their Cloud message is so strong and that they are commissioning this kind of research. As Gantz says, for most organizations cloud computing should be a no-brainer.

David Terrar is a consultant and software developer who specialises in the use of Cloud applications and social media in business. He is a co founder of Cloud Advocates, an association of consultants who aim to demystify the Cloud and provide pragmatic help and advice for businesses, organizations and accounting practices. To find out more, visit http://cloudadvocates.com


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