The cloud is changing the way we deliver IT resources, quite similarly to how electricity enabled the second industrial revolution in the 19th century. As an IT provider, you can leverage the cloud’s power, storage space, and fast network connection to drive much broader implementation of computing workloads and more widespread adoption among businesses and end-users.
Since the three biggest cloud providers – Amazon, Microsoft, and Google are investing billions of dollars per year in their data centers, IT providers should consider the potentials of public cloud as a new global utility.
In this post, you will learn about:
- Why the cloud is defined as a new utility
- How the cloud has enabled more profitability for businesses
- What are preventing traditional companies from adopting the cloud
- How to leverage the cloud as a utility
Cloud as an Emerging Utility
Cloud computing has recently emerged as a compelling utility for delivering services over the internet. On another hand, users obtain and employ cloud computing as easily as they access a traditional public utility (such as electricity, water, natural gas, or telephone network). The benefits of the cloud as a utility include:
- On-demand service provisioning: Cloud computing provides resources and services for users on demand. Users can customize their computing environments based on their needs, for example, software installation, network configuration, as users usually own administrative privileges
- Pay-as-you-go pricing: Cloud computing is priced per minute, allowing customers to pay for their IT services on an Operational Expenses (OPEX) approach rather than a combination of monthly runtime (OPEX) and upfront server investment - Capital Expenses (CAPEX)
- Guaranteed quality: The computing environments provided by public clouds can ensure the quality of service for users as agreed in the Service Level Agreement (SLA). For example, Microsoft Azure guarantees 99.95% availability for their service
- Autonomous system: Public cloud is an independent system. It is deployed, managed, and updated separately from your products or services.
- Accessibility: The cloud client software is lightweight and ready to be installed locally. Another option, cloud interfaces, are location independent and can be accessed by some well-established interfaces like web services framework or Internet browser.
- Scalability and flexibility: The cloud can be scaled across various concerns, such as geographical locations, hardware performance, and software configurations. It is also flexible to adapt to different requirements of many users.
Cloud Enables Greater Profitability
In the last few years, cloud computing-driven interactions are becoming regular and commonplace. Looking for transportation? Open Uber or Lyft. Listen to your favorite music? Fire up Spotify, or Pandora. Collaborate with friends and colleagues? Share and update files with Slack and Dropbox. The utility power of public cloud is one of the main drivers that enable many start-ups to scale their services nationwide and globally very quickly without infrastructure investment.
Not only startups, more and more giant enterprises started using the cloud as a way to ditch their own data centers. Intuit first put its self-help app called Live Community, where power-users of Intuit’s tax software answered questions from other users, in AWS. The project took one-fifth the effort and cut overall costs by six times. Now, Intuit has moved 33 applications, 26 services, and 8 enabling tools to the cloud. In a larger scale, General Electric is leveraging Microsoft Azure to deliver GE Healthcare applications and services to healthcare providers around the world.
In all cases, public cloud provides a seemingly inexhaustible supply of computing power, storage space and fast network connection pipes to deliver computing as a utility, much like power companies deliver electricity to all our homes and businesses. With huge cost savings and ability to scale quickly, it’s clear that those who take advantage of the cloud utility can win big in the global market.
Cloud Myths Create Barriers for Traditional Businesses
The cloud has opened many opportunities for start-ups like Spotify, Pandora, Lyft, and Slack, and enterprises like Intuit and GE to quickly deliver IT services and scale globally without adding overhead. However, traditional businesses have been much slower to switch to this new, flexible but often technically challenging type of utility power.
There are many reasons for these delays. Trust is often cited as the first reason for cloud rejection. Many companies are very skeptical of letting their own data and applications outside the walls of their organization. What would happen if they cannot control the regular update, patching, maintenance and replacement of their servers?
Secondly, not as widely discussed, but equally problematic is the issue of job security. If projects that IT used to manage are handled by public cloud providers, won’t that reduce the need for some IT jobs?
Another big issue is technical complexity and limited skill sets. Many cloud computing concepts, tools, structures and methodologies can be very challenging, and traditional business IT departments simply don’t have enough people with the capabilities to do the work.
Leverage the Cloud as a Utility
As time has passed, many businesses are starting to recognize that their fears were either unfounded or not as troublesome as they first thought. In the case of trust and security, many cloud providers offer built-in security and industry compliance, enabling a safer environment than a company’s own network.
The improved flexibility that cloud computing can bring to businesses helps them in many areas, from delivering mobile versions of custom business applications more rapidly, to integrating with partners and other web services more easily. As a utility, the cloud enables the creation of new applications and IT services. It is a tool for service providers to ensure greater productivity and satisfaction for customers that need managed service providers now more than ever.
Finally, service providers should look at the partner ecosystems to create a strong alliance in the cloud. The rise of companies like MyCloudIT and other managed service providers who can help businesses that don’t necessarily have the in-house expertise can enable a smooth transition to cloud-based computing services.
By treating resources as a utility, service providers will be able to deliver unique, tailored propositions to their customers, where applications work with perfect performance levels at perfect price points.