Staying competitive means moving to the cloud

Updated: Oct 2 2012, 03:17am hrs
Dirk-Peter van Leeuwen

In December 2011, market researcher IDC noted that spending on the IT industrys next dominant platform, built on mobile computing, cloud services, social networking, and big data analytics technologies, is growing at about 18% per year and is expected to account for at least 80% of IT spending growth through 2020.

Thats a lot of money. Its compelling evidence that we are in the midst of a fundamental transformation, where information is becoming the primary raw material in organisations large and small and maximising the value created from that information is the increasingly strategic role of IT. This creates enormous opportunities for companies to find and exploit new market niches that may not have even existed a few years ago.

In some respects this isnt news, even if the cutting edge aspects of mobility, cloud, social, and big data are. The companies that grew up on the Web have had IT technology at their core. Nearly as well known are examples from companies that design and manufacture high technology components. Or financial services firms that depend on the latest and greatest hardware and software to rapidly price and execute trades. These types of businesses are cutting edge on the 3rd Platform, as IDC calls it, too but thats what weve come to expect in these industries.

Whats most different today is that the cutting-edge IT story doesnt begin and end with such companies. Rather, its nearly pervasive. In part, this is because access to advanced IT is no longer limited to companies with the budgets to buy and operate rooms full of servers. Startups can now routinely rent computing power by the hour at public cloud providers such as Amazon Web Services and Rackspace.

Software-as-a-service (SaaS) is arguably even more democratic. SaaSessentially, hosted applications delivered over the internetis primarily for fairly standardised applications that are useful to many different types of organisations rather than something unique and differentiating. Nonetheless, SaaS means that even small firms have access to whats often the exact same software used by huge enterprises; they just pay the same per-user charges. This is important when you consider that, historically, small businesses were often disadvantaged by limited IT resources and skills to handle basic keep-the-lights-on tasks. Now, running the same email or customer relationship management system as larger competitors is as close as an internet connection and a credit card.

However, cutting-edge IT is also far more widespread than in the past for another key reason: technology pervades anything. Media today is digital media. The vast server farms at animation studios such as DreamWorks Animation are perhaps the most obvious example. And their computing needs have only grown as animation has shifted to 3D. But essentially all content is digitised in various forms. For example, sports clips are catalogued and indexed so that they can be retrieved at a moments noticewhether for a highlights reel or a premium mobile offering, a huge monetisation opportunity in any case.

How about laundry Now, thats low tech. Yet Mac-Gray Corporation redefined laundry room management. It introduced LaundryView, which allows students/residents to monitor activity in their specific laundry rooms so they can see whether a machine is free or their laundry is done. Its been visited by 5 million people and the company has added on-line payment and service dispatch systems.

Agriculture is an industry that suggests pastoral images of tractors and rows of crops. Yet, seed producer Monsanto holds more than 15,000 patents for genetically altered seeds and other inventions.

I could continue to offer examples both familiar and less so. However, the basic point is straightforward. Increasingly, information technology isnt something that is primarily important to a few industries and uses. Rather its permeating just about every place, whether its about creating new types of services, better connecting to customers, increasing efficiency, delivering better market intelligence, or creating better consumer experiences.

For organisations building their own IT infrastructures, building an open and hybrid cloud can break down IT infrastructure silos and gives their developers and other consumers of IT services faster access to resources. This in turn lets them develop and deploy new business services more quicklycontributing to shorter time to revenue and more competitive offerings.

However, as weve seen, cloud computing also helps organisations that historically have had little access to cutting-edge technology and lack the skills and scale for building out in-house infrastructure. Whether infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), or SaaS, cloud providers offer these smaller organisations a wide array of options to enhance their business with whatever sort of IT is the best fit.

Organisations can choose to leverage the power of cloud computing in order to move their business forward. Or they they can cede their market to more nimble competitors, many of whom will be new entrants leveraging new ways and approaches to doing business enabled by IT.

The writer is vice-president & GM (Asia Pacific & Japan)Red Hat