We’re seeing Cloud Computing shift out of the realms of "fad and hype" and into the core of Australian business IT and business strategies.
So what is behind the shift? Pick up any analyst or research briefing, and you will see a consistent range of factors driving change across all organisations, irrespective of size or industry: cost, change in how end users consume technology, and flexibility.
1. Less capital expenditure, less liability
First of all, businesses are particularly concerned about costs in our highly volatile economic climate. At a macro or global level, we see continued concern over the state of the global economy - even in the Asia-Pacific region with its relative strength compared to the rest of the developed world.
This uncertainty is driving a more conservative outlook on costs within businesses: IT departments are increasingly inclined towards fixing costs or aligning them with consumption. Consider what IDC has to say about changes in IT expenditure models:
The move from CapEx to OpEx and greater expectations for return on IT investments will drive IT outsourcing engagements. However, though lowering costs is an important driver, customers are increasingly looking to outsourcing as a means of transforming their technology environments involving new technologies (e.g. virtualisation, SOA and mobility) and new service delivery models (e.g. private and public clouds).
Raj Mudaliar, senior market analyst, IT Services Research Group, IDC Australia (28 May 2012).
With fierce competition in all markets, businesses need to do all they can to stand out the in crowd, through innovation or distinguishing themselves by delivering the best customer outcomes. Linking costs directly to use through a cloud-based OpEx models is proving a common technique to let businesses focus on using their IT investments to assist in differentiating themselves rather than being distracted by running their IT infrastructure.
2. Changes in how end users are consuming technology
We're also seeing massive transformation in the way we as consumers use technology. Mobile access to corporate applications is nowadays taken for granted, thanks to the simplicity and self service nature of "app stores", social media and our mobile devices themselves. We increasingly blur the line between personal and work life, and increasingly expect that we get the same technology benefits at work as we do in the private sphere.
Australian businesses are embracing social media and mobile apps in line with these trends. The recently published Optus' Future of Business Report identified that businesses are embracing online channels and mobile applications to meet the requirements of their customers, not just to stave off their competition. The cloud, be that in private or public incarnations, is core to many of these new channels - particularly in providing the agile access to services and data regardless of location or physical device.
3. Flexibility and control
For the typical IT department, this means making a critical choice: seize the opportunity to be at the heart of business transformation that leads to greater flexibility and control, or see IT strategy led by other lines of business such as Marketing, Operations, Finance or Sales.
While Cloud alone does not represent the panacea to address all of the challenges represented above, it allows businesses to move towards more agile frameworks for delivering technology outcomes. Optus' Future of Business Report shows a dramatic increase in strategic cloud use by IT departments over the next 3-5 years:
2012 is fast becoming the Year of the Cloud. We've moved past thinking of it as the next technology fad, to realising it to be a critical part of the technological environment we live and work in.
How are you using the cloud to better engage with your customers and employees?
By Liam Fraser. All views expressed are the author's own.