How cloud can affect you
You may read this and think how great it all sounds and see how important cloud is to the future of business. But if you’re not ready to jump on the bandwagon, Caplan would caution you to rethink your position.
“With other companies rapidly implementing these, if you’re not doing it, it’s turning from a competitive advantage to, for those laggards to moving into the cloud, definitely a competitive disadvantage,” he says. “Just to keep up is critical.”
You may wonder why this particular technology is so critical to business. Hitz says this is similar to other major technology game-changers in the past.
“I’ve had the opportunity to ask a lot of CIOs, ‘How is cloud computing affecting your business? How much cloud computing are you using?’” he says. “The most common answer I get is, ‘It doesn’t affect our business at all yet, and we’re not using it at all yet.’ I will tell you that almost all those CIOs are wrong. They’re already using it but not thinking right.”
He say that CIOs need to think differently and compares it to the early days of the transition from the mainframe to the PC. In those days, if you asked a CIO if they had a PC strategy, many said, “Oh no, that’s not part of what we’re doing,” but half the employees had PCs.
“When data started leaking out the door because somebody lost their PC, who do you think the CEO went to beat up?” Hitz says. “The CIO, and the CIO said, ‘Well, PCs aren’t really IT.’ Those are the CIOs that are gone. I predict the exact same thing is going to happen to the CIOs who think that cloud computing isn’t happening in their business. … There’s an enormous amount of work that CIOs need to start thinking about — how do I get my arms around all the cloud contracts that are being found in little places scattered around.
“It’s affecting a lot more than people are realizing, because they’re not defining it broadly enough. If they look at that broader definition, the stuff they’re already sort of doing or in denial about, that stuff is a pretty good road map to where the future is headed, just more.”
Not only is it affecting how your business will run, but it’s also going to change how new companies enter the market. Brian Jacobs is founder and general partner of Emergence Capital Partners, a Silicon Valley-based venture capital firm.
“Silicon Valley is very much a startup culture — there’s always something starting up here, and it’s important to note that cloud computing also changes the economics of a startup,” Jacobs says. “A startup today doesn’t need as much capital to get going because of cloud computing. A developer, who could be an independent contractor, an engineer who’s working at a day job and at night has a new product he wants to develop — he can log in to a platform as a service like Engine Yard, and they can start developing their product without a single dollar of investment. They can work for free developing the product until they’re at the point they can introduce it to the market.”
Aside from all the ways that cloud computing will change business, it’s also changing how employees approach their jobs. While people can work from home in their pajamas, it’s often difficult, and in many cases, employees don’t have access to everything that they could if they were on their PC actually in the office.
“Cloud computing lets you access your work environment, and you’re on your couch — maybe in your pajamas — and you’re doing real e-mail and doing real work, and yeah, maybe your boss is getting a little more work out of you, but you’re doing it, quite honestly, voluntarily because you get to work in your environment, you’re not in the office, you’re not sitting in front of the computer in the office and you probably have better TV shows on,” McNaught says. “The technology that cloud computing provides is about saving cost and delivering additional benefits.”
To give you a real example, Hilton Hotels decided to close their physical reservation centers and send all of their reservationists home with these devices that connected them securely to the Hilton system.
“What Hilton found was they could close all those buildings and save those costs of real estate, and they saved all the energy costs of running the PCs in the buildings, and they found the employees were happier, because they were working from home — maybe in their pajamas but nobody could tell. They were working over secure devices, so Hilton didn’t lose any data, and they were working over a device that didn’t have the complexity of the PC, so they weren’t calling the IT staff out to their homes to fix this,” McNaught says. “Cloud computing allowed Hilton to save money in so many ways that satisfaction increased, and they found that people working at home would take a lower pay. They saved on all sorts of fronts. Cloud computing has a transformative effect on all kinds of business.”
On top of that, Caplan says that cloud has the ability to raise employee morale even if you’re not sending them home to work.
“Put aside the adoption and cost benefits, and I think what you’ll find is your team just loves these applications because they’re used to dealing with consumer-based applications,” Caplan says. “They all know how to use Google, Facebook, Amazon. You’re basically equipping them with applications that are just as easy to use as those, and I think you get a ton of employee loyalty and you make your employees so much more efficient that from a recruiting perspective and a retention perspective and from efficiency, there’s just huge value.”
How to reach: Model Metrics, www.modelmetrics.com; NetApp, www.netapp.com; Engine Yard Inc., www.engineyard.com; Wyse Technology, www.wyse.com; Emergence Capital Partners, www.emergencecap.com
