To understand the significance of the purchase of RightNow by {complink 4092|Oracle Corp.}, you need to go back only three years to when Larry Ellison, the CEO of Oracle, trashed the cloud, calling the idea “gibberish”.
The shift in Ellison's perception is understandable. According to IDC, revenue from public IT cloud services is expected to hit the $55.5 billion mark by 2014 — a compound annual growth rate of 27.4 percent, or roughly five times that of regular IT products.
The continuing economic downturn has accelerated adoption of the cloud by businesses that are looking at the cost savings it provides. The cloud eliminates dependence on hardware, ends the war of PC versus Mac software compatibility, and reduces the cost of software purchasing. In addition, one of the most compelling reasons companies are moving data, storage, and applications to the cloud is that they can rent what they used to buy.
Yet the savings go beyond the obvious reductions in IT expenses. By 2020, US companies that use cloud computing can achieve annual energy savings of $12.3 billion, or enough oil to power 5.7 million cars for a year.
The word “cloud” may have had a different meaning to most people only a few years ago. Experts looked at the cloud as hardware-as-a-service, and laymen may have been puzzled by it or at best thought of it as software-as-a-service. Today, thanks to the awareness brought to the public by the news media, the cloud has a definite meaning and value. To most, a solution is either on the premises, where they can physically touch the hardware, or in the cloud.
A Samsung study examining how workers actually use IT in the workplace and how this affects things such as productivity, health, and security found that employees spend an average of seven hours a week fixing IT headaches. Such issues are drastically reduced by utilizing cloud-based applications, since IT support, patches, and upgrades are handled by the cloud vendor.
In the past, companies primarily bought cloud solutions if they had remote staff. It was their way of connecting all their workers. However, today so many app developers have focused on cloud-based offerings as their flagship product that many companies are using cloud services when all their employees are under one roof. Companies receive better apps and have fewer headaches.
Companies as diverse as {complink 8019|General Electric Co.}, Wells Fargo, Mercedes-Benz, and Medtronic utilize cloud-based applications to create a consistent user experience across all devices, including tablets, benefitting from the shift to a pay-per-use model.
Last year President Obama signed the Telework Enhancement Act into law, requiring all government agencies to determine which employees are eligible to telecommute and to develop policies and processes allowing them to do so. Agencies are turning to the cloud to find the tools and applications that will help teleworkers do their jobs seamlessly.
Security issues are often cited as a significant concern, but most cloud-based services are more secure than legacy systems maintained by agencies or corporations. Money under a mattress may be closer to you, but money in a bank is safer, because the bank has experts in charge of security. Cloud services may not have CIA-level security, but they are by far more secure than laptops and servers in back offices.
Companies such as InfoStreet, a leader in cloud-based services, have been providing platforms and applications to enterprise customers since 1994. Their customers have lowered direct and indirect costs, reduced IT headaches, and equipped themselves with the tools for a mobile workplace. Oracle, {complink 3426|Microsoft Corp.}, and {complink 379|Apple Inc.} built their companies on the sale of hardware and proprietary software. Yet they are all accelerating their cloud services, either through acquisition or invention, because of customer demand for precisely what InfoStreet has been providing all along.
It is true that the cloud is not something new. The advantages of using cloud are quite obvious – Savings on IT infrastruture , Software licenses, IT staff and offcourse the energy savings.
The main reason for the cloud becoming more attractive recently is that the network infrastruture has become more robust, secure, and the network speeds have become so fast that there is hardly any difference that a user may feel in response time between working on a local server and working on a cloud.
I remember just a couple of years back, downloading or uploading attachements of email used to be a time consuming task. With today's network speeds all that has become a matter of few seconds.
Siamak, you are right. Cloud is not a new technology and it’s in place for a long time. The only thing is now they had commercialized the technology with a nick name “Cloud” and marketing well in different forms like SaaS, PaaS, IaaS etc. we had used the similar technology in our office quiet some time back by using the internal networks. The only change is now its move out of office to certain regions, from where connectivity is establishing.
The “cloud” has made much advancement over the last few years that are making it more attractive to not only businesses but consumers. Businesses using the cloud are now saving more money with less energy consumption. The need for heavily populated IT departments goes down, and security has increased drastically. In fact some companies using the cloud have better security now, then when they were using their own servers.
As internet connection speeds increase and become more widely available it is almost inevitable that the cloud will take over. The issues after that will be things like disaster prevention and security. i am seeing a lot more cloud based apps now and I am starting to like them more and more. I still worry however about personal data security.
This is a great explanation of what the cloud does and its value proposition. One question: it seems as if the cloud takes a certain level of direct control out of the hands of, for example, corporate IT support. Is this accurate? And if so, it is a problem from the IT support perspective?
“Cloud services may not have CIA-level security, but they are by far more secure than laptops and servers in back offices.”
That will reassure companies that are still reluctant to cloud adoption because of security concerns. With the “push” coming from news media and cloud services providers, more companies will eventually be convinced. But we should still be aware that some institutions (banks for instance) require a CIA-level security and we cannot expect them to move to (public) cloud any time soon.
In response to Barbara Jorgensen:
Great Question. I truly believe that IT does not lose any control. Since we used the money analogy before, this is a kin to you using your ATM anywhere to access your money. The control of what you do with that money is 100% with you, the Cloud just gives you more flexibility.
The term cloud confussed me for a while too before it dawned on me that it was just a marketting strategy, a form of rebranding of remote data storage and web based servicies.
I think it has a bright future, mainly in developed economies, and in the case of developing economies, only for large coorperations.
Where i come from, there is no way i'm putting any confidence in the cloud anytime soon.
It seems cloud services are more for business or companies. Are there many cloud services that target endconsumers?
I feel the editorial very interesting and in general really in line with current and future trend. Flexibility achieved by cloud is also another crucial point, in my opinion, for the definitely success of that services' paradigm. At the end, I am still looking for the answer to a question. Each one industrial company, especially within supply chain sector, has tailored and customized ERP, to its peculiar needs. I am wondering how cloud in the way “as a service”, can allow IT platform feature as a services and in same time, guarantee individual customization. Is it a matter of provisioning process?
Yes, cloud is not new and in time, looking from perspective its application and usages become more clear. Then the cloud companies create services and solutions which will be right on the target. All that I worry about backbone internet connections. All businesses internal processes can paralyzed by interruptions in external internet services.
I have always been confused with the word “cloud computing”. I still am but this article is great to pinpoint the advantages of cloud computing and is future looking. What i find the most attractive features of the cloud computing are the energy saving and cost cutting measures. With the cloud computing in place, i think that the traditional office desk will be more mobile and employee can be connected without physically coming to office. I am concerned about the rent of buying cloud services. Would the cost of cloud service supersede the cost actually buying a hardware and software. The typical lifetime of a PC is about 5-6 year but the software can be upgraded at a small cost? How would this scenario look in clouds?
It is nice to read this. I wish to see more EE vendor – like Cadence, Mentor and other provides application service on cloud.
Will cloud service lower the cost to user? For it to be very successful, it has to provide service at very low cost.
It is nice to read this. I wish to see more EE vendor – like Cadence, Mentor and other provides application service on cloud.
@_hm, If this happens its very good news for Indian industry. I know many people want's to start their own firm but hesitate to do it because tool costs are very high. If they can get these tools at reduces prices then I am sure we will see boom in the start-ups.
Yes, tools vendor will also benifit significantly from this. It is win-win situation. e.g. EE needs to have new tools to design complex 6gbps and higher speed boards.
@tirlapur:
“If this happens its very good news for Indian industry”
Could start-ups rely on cloud services to reduce running costs? Yes. But if the internet services in the area the company operates from are not reliable, it will have to face other technical problems that may affect its revenue. How reliable are internet services in India (in most parts of the country)?
How reliable are internet services in India (in most parts of the country)?
@Hospice_Houngbo, internet is very reliable these days, atleast in the urban part of india. I have hardly faced any internet outages in the last 2 years. Moreoever you can get broadband connection at reasonable cost 20$.
tools vendor will also benifit significantly from this.
@_hm, very true. Currently tool companies like Cadence,Magma and Synopsys have very few customers because startup's can't afford to buy those tools. Through cloud these tool companies can reach to start-ups as well , which will help them increase their revenue significantly.
That is an excellent news. Good to know. I hope there are more vendors out there!
I think one of the biggest advantage with cloud solution is that there is no initial investment required and companies pay the cloud vendors on the go basis. This can allow companies to invest in their core businesses and not have their capital tied up in IT assets. This gives them more chances of growth.
It is very true. Cloud services are not new.
Arena Solutions has been a cloud provider of BOM and change management (core PLM) services since 2000, and man – – back in the early days there was sure a lot of resistance to “on-demand” and “SAAS” products.
With the advent of “cloud” I think the idea of storing data up in the inter-webs is much less scary to the general public. We have seen a huge increase in adoption as people realize that lightweight, easy-to-implement, global solutions make a lot more sense in today's day-and-age.