How cloud works
So the idea of saving that much money has caught your attention, and now you may be asking, “What exactly is this whole cloud computing thing anyway?”
Caplan says the biggest idea to grasp is that cloud technology allows you to approach business differently.
“The biggest change is for the first time, businesses can roll out applications and know that they’ll be extremely successful with these applications,” he says. “If you look in the past, the chance of success was so low. Companies spent a lot of money, they spent a lot of time, and now they’re going to be successful.”
The reason for that is the way this technology changes what you’re currently doing.
Dave Hitz is the co-founder and executive vice president of NetApp, a company that sells enormous amounts of storage to people that need it. For example, Yahoo stores all of its e-mail accounts on his equipment, and the special effects for “Avatar” were stored on his equipment, as well. He sees two different definitions of cloud computing.
“Definition No. 1 of cloud computing is you no longer buy a computer,” Hitz says. “You access computing service over the Internet to somebody else’s data centers, and they spend the capital and they hire the people to build them and they do everything, and all you do is pay a monthly bill and access the service over the Internet. Style No. 2 of cloud computing is a completely technical definition (that) has to do with if you’re going to build a data center, what does the architecture look like? And if the architecture has a lot of shared infrastructure, then people tend to call that kind of environment a cloud computing environment.”
His first definition is another benefit to cloud because it eliminates many IT headaches because, being honest, how often do you have an overly positive IT experience?
“I imagine people would say they’re experience with IT has been less than optimum,” says John Dillon, CEO of Engine Yard Inc., a company that delivers an environment for software developers to write programs that run inside the cloud. “The reason is you spend so much money building all this infrastructure, that going the last mile, which is where you write the application that interfaces with the human, the user, doesn’t get the attention, doesn’t get the money and doesn’t get the investment.”
The idea of the cloud is essentially that you plug into the wall, and you get a whole data center.
“It’s IT as a service, just as you get electricity or water,” Dillon says. “In business, you, in most cases, don’t have your own power plant, you didn’t dig your own well, you didn’t build your own building, you don’t have your own fire department or police department. So why on earth do we basically give power to a group to build something that has been built before in-house, and then hope it works?”
Dillon also points out that in the United States, capital expenditures are a huge expense. In fact, about 50 percent of capital expenditures in America are information technology.
“Unbelievable,” Dillon says. “How many people are getting the ROI on this? What’s happening with the cloud is some big companies are saying, ‘Look, I’ll build the data center.’ It’s changing who buys, why it’s bought, and it changes the capacity and the economic decision-making process around IT.”
When you look at how much money most organizations spend on their IT systems, these cost savings are a big driver, but another benefit is cloud makes your IT department more effective in the company.
“The real power that CIOs are finding is that they go from worrying about managing data centers and managing servers and the non-strategic things their teams are focused on, and they love this stuff because after this, they’re focused on strategic initiatives that drive revenue growth,” Caplan says. “They’re actually contributing in a real way to revenue growth and cost reductions and not just focusing on the servers are out.”
A lot of times, your CIO may wonder if this means you’ll need to reduce the IT department staff size, but Caplan says that’s rarely the case.
“Usually, you have the old line, ‘I’m very scared of change,’” Caplan says. “And all my people in IT, their job is to make sure the servers don’t go down, to make sure the e-mail works. Their job is to reset passwords and worry about the lights. There’s sometimes fears if you don’t have to worry about that stuff anymore — that stuff just works, and you don’t have to worry about it — what will happen to my team? Will my team shrink? Almost every time, the answer is no. The team just morphs into a far more strategic team. They can get more active in the business on cool applications that drive the business forward.”
Another benefit is that now have everything that is on your PC in one location that can be accessed from anywhere — not just from the PC itself — and that comes with benefits in and of itself.
“When you take your software and your applications and your data and you move it to the cloud, something’s happened,” McNaught says. “First off, the cloud is the data center of your company and you can always get to it. You’re connected to the Internet, so you can get there from home, from the conference center, from the airport. And guess what? Because it’s not on a PC with a hard drive failing and memory getting filled up, it’s protected. It’s backed up. It’s secure. So the cloud provides this real opportunity to take the things that make up our work life, and within five years our home life, as well, and move them to this one place where we can always find our stuff.”
