Saturday, June 15, 2024

Up In The Air: Enterprise On The Cloud

Integrating mobile, social and big data on the cloud is essential for companies to remain competitive.

The IT sector transforms at a rapid pace. The biggest change of this decade is the advent of cloud and its enormous potential. Companies are replacing decades old systems of doing business and migrating to new and better methods powered by the cloud. Small and new companies are adopting this strategy faster and in a better manner than large corporations who are losing their competitive edge on a daily basis.

In this second decade of the 21st century millennials who are tech literate love to use mobile and social apps. Noticing this businesses are racing to integrate both into their business models. Big data, is making inroads too, especially in data-rich industries like retailing and healthcare. And the cloud is driving and enabling all of these technology shifts. With mobile, social, big data and cloud coalescing to change the business processes, 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 calls it “The Third Platform”, emphasizing the new computing model that enables the coalescence and predicts that it will give stimulus to the development 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 revolution.

What’s surprising is that small and medium businesses (SMBs), which for decades have lagged large enterprises in their access to technology, are outpacing their bigger counterparts in the race to “go cloud.” Cloud computing doesn’t require big IT budgets, staffs, or data centres, unlike the First and Second platforms.  As a result the price of starting a technology-intensive business has dropped drastically. 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 start a business.

Since the obstacles to create an online based business has reduced significantly, the convergence of cloud, mobile, social and big data is spurring innovation, growth and a bevy of businesses. According to IDC Chief Analyst Frank Gens, by 2018 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.”

How do these small companies pose such a significant threat to the world’s most successful multinational companies? The answer may lie in a 2013 survey sponsored by cloud provider Rightscale (based in Santa Barbara, California, USA), which discovered 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.

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

Gartner Vice President and Fellow David W. Cearley , in a video announcing the company’s Top Ten strategic technology trends for 2014, led by the four Nexus of Forces technologies said this-“It’s not just cloud internally or cloud externally, it’s cloud everywhere. 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.”

At the 2013 CITE conference John Herstein, senior vice president for customer service at cloud storage and collaboration vendor Box (based in Los Altos, California, USA) advised the delegates “Instead of fitting work into tools, change the tools to the way people want to work today.” He also noted 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.

Stephane Maarek, North American vice president at France-based cloud infrastructure provider Outscale noted that 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 transition to cloud. But the advantages become clear when you understand the technology that enables cloud based infrastructure. “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.” Maarek believes that a demonstration of the cloud model’s power can go a long way toward convincing even the most sceptical IT pro. Maarek when demonstrating his company’s services, points out that a company will need days or weeks to add even a small cluster of servers to a Second Platform model. But it takes only 5 seconds for Outscale to activate and integrate 1,000 Windows servers. No sceptic can argue with that.

Large enterprises tend to possess a phobia of cloud computing over a single point of concern-security. 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 discovered. Concerns with regard to governance, compliance and integration to internal systems also were about 50% lower among cloud- experienced companies than among beginners. The more experience organizations get about how to work in the cloud, the more they understand how to address cloud-associated challenges and the easier cloud based enterprise becomes.

The CEO at Israel-based Cloudyn, which helps organizations better understand their spending on cloud resources, Sharon Wagner points out that transitioning to the cloud is inevitable. IT departments will have to relinquish some amount of control to reap the numerous benefits of cloud computing. “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.

When the tools weren’t so easily available or evolving at such a rapid pace and when the they were expensive , IT departments didn’t need to make changes to  a platform for years. But it’s a new day and companies expect instantaneous and real time evolution of their IT departments by adapting new technologies.

The CTO at financial markets information provider Dow Jones and Company, Stephen Orban observes that today’s tech-literate employees can easily use software without much support from the IT department. Orban said at a recent conference that “Everybody who works understands technology well enough so that they should have influence over what we build.” This evolution has forced Orban to be  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.

The advantages of cloud computing – and the risks of failing to exploit them – are just too big to ignore. 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 overtaken by the hyper-adaptive small and medium businesses.