Speed and flexibility overtaking cost as drivers for cloud

Smaller companies have taken to cloud computing like papparazzi to celebs. It saves time and money, lowering the need for IT support and upfront expenditure on technology. In a smaller organisations where cashflow is king, cloud's ability to lower costs is its key selling point.

For larger organisations, it's a different story. Large volumes of assets are increasingly seen as drags on flexibility and agility, hampering the organisation's freedom of action. So what does cloud computing mean for organisations looking to adapt to this new way of working?

Perhaps the first thing to note is that a move to cloud is non-negotiable. In many organisations, IT is in competition with business managers who, noting that they can buy storage space and servers from Amazon et al using petty cash, are doing so to get their projects moving. This creates tensions within the organisation, as maverick outsourcing can fall foul of long-established IT governance practices and policies, such as those around information and data management, compliance, service quality and cost, as well as increasing vulnerability to malware and the like.

IT departments must respond, however, as business needs trump IT, not the other way around. At the same time, business managers buying cloud services need to ensure that the cloud provider meets internal standards, that the data can be retrieved, and there is a clear policy about what happens to the data once the facility is no longer required. If unbridled agility threatens the wider organisation, it's probably not worth the risk. Additionally, a quick server instantiation can speed the development of new applications but it may mean more work later on. For example, it could generate additional work to adapt cloud-developed applications to internal processes.

But if the organisation's core business can be more agile -- such as the ability to start a new website or make documents publicly available -- then cloud computing can fulfil its promise of boosting the bottom line. One example is the direct adoption of SaaS by business leaders, thus sidelining their IT departments and improving the quality of business information. Another, much celebrated example of is the Daily Telegraph's breaking of the MPs' expenses scandal story. It uploaded MPs' expenses claims onto Google Docs, very quickly allowing readers to look through them, certainly much faster than if the editors had been constrained to go through an IT department and make them public in the traditional manner.

The conclusion to be drawn is that it's important to define what kind of agility is required: fast access to IT resources or a way of speeding up a business process, as in the example above of making information public.

In the latter case, agility relates directly to profitability, as VMware-commissioned research February 2011: VMware business agility survey of decision-makers, conducted by AbsolutData shows that extremely agile companies are better at "recognizing shifts in customer trends/demand," "launching new products or functionalities," "managing the execution of programs" (sic) and "scaling resources in order to meet demand."

Cloud computing allows you to both draw on and discard resources as business needs dictate, directly affecting the bottom line. This is the real benefit of the agility that cloud computing confers.