Looking for business Value in Cloud Computing? The business value is in what you do with it, not the underlying platform.

In all the Hype over Cloud Computing at the moment many people are getting caught up in the technology and the “what and how” of Cloud and seem to have lost sight of “why” you would do this.  The business answer to that is “because there is a significant business benefit/ competitive advantage in it” – that’s why...

Sadly, the majority of Cloud Based solutions being offered today involve a simple virtualisation or consolidation of an existing I.T infrastructure.  That is not to say that taking underutilised equipment and consolidating that is not a good idea – in most case it is.

However, the basic premise of having someone else manage a facility for you is not significantly different to the whole “managed services scenario” that has been around in IT for more than 20 years...

The current approaches to the operational aspects of Cloud Computing have a parallel in Managed Services / Hosting and can be grouped operationally into one of the following (Operational Architecture types):

• ·       On Premises Hosted
• ·       Off Premises Hosted
• ·       Single Instance (SaaS/ IaaS / PaaS)
• ·       Multi-Instance (SaaS/ IaaS / PaaS)
• ·       Multi-Tenant (SaaS/ IaaS / PaaS)

These approaches represent nothing more than a simple change in an operating Model...That DOES NOT deliver any sustainable differentiator or net new value proposition.

There is nothing unique in these solutions or approaches that cannot be readily copied by your competitors.

If you do the transitioning work properly, you may save on your OPEX...

(This is the core of a value proposition in Outsourcing – that proposition is to give to someone who can do what you do - only the work which they can do faster / better / cheaper...  The one thing you should never outsource is your strategy.

Assuming there is a value - Once you have saved that money in OPEX and outsourced those skills and disengaged the now redundant in-house I.T resources - then what is your differentiator?

Ignoring the technology aspect of “what” and “how” -  let us look at “why” you would consider Cloud...

The thing you need to look for before you think about a Cloud  deployment is “why”:

What is my source of Value?

What is it in my business operations that gives the business a competitive or strategic advantage?

If you can answer those questions; now try to answer the question “why cloud” improves those positions?


Thanks to Rob McWhirter for this post.