Why You Need to Treat Cloud Computing as a New Business Model
What factors make cloud a new business model?
Successful IT leaders treat cloud computing as a new business model, not as a new technology. This brief explains why cloud is a new IT business model and what you need to do to benefit from it.
Confusing cloud computing with technology is a mistake. Cloud isn’t a technology — it’s a new business model powered by new technologies. Cloud sells IT infrastructure, platforms and applications as services. Its on-demand, “pay as you go” model reduces the time, money and people it takes to build and deploy infrastructure and applications. Top cloud benefits are efficiency, agility and innovation.
Cloud has five essential features, three service models and four deployment models, that makes moving to it a complex IT initiative. Each blend of service and deployment models changes cost, control, responsibility, accountability and security. Each affects your infrastructure, applications and project teams differently, making cloud a new business model for IT.
What You Need to Know:
Five features define the cloud business model:
- On-demand self-service access to infrastructure, platforms and applications
- Broad access through mobile phones, tablets, laptops and workstations
- Resource pooling and automation to combine resources into managed services
- Rapid elasticity that scales automatically and quickly with demand
- Measured service with usage monitored, controlled and reported
In the right situation, these features offer agility and cost effectiveness that traditional IT can’t match. Cloud can improve cost and time to market by five to 10 times, though 20 percent is more realistic.
Three cloud service models define decreasing levels of control over IT:
- Infrastructure as a Service (IaaS) delivers platforms for service and application development, test, and deployment. IT controls operating systems, applications, and some network configurations.
- In Platform as a Service (PaaS), developers create and deploy applications using cloudprovided tools. IT controls applications and some operating system settings.
- Software as a Service (SaaS) makes entire applications available to users. IT controls just a few application settings.
Four cloud deployment models describe cloud ownership and usage:
- Private clouds are dedicated to a single firm. That firm or a provider owns and/or operates the cloud. It can be on- or off-site.
- Community clouds are shared by a group of firms with similar needs. The firms or a provider owns and operates the cloud. It can be on- or off-site.
- Public clouds are openly shared. They’re owned and operated by a service provider.
- Hybrid clouds combine services from two or more different cloud models.
What You Need to Do:
Understand that cloud is a service delivery model. It changes the nature of IT by shifting control and ownership of IT assets to a provider. This increases certain risks and reduces others. To benefit from cloud, you need to identify and address its risks early.
Examine each cloud feature to be sure you understand its effects. Each has its pros and cons. For example, consider resource pooling. A private cloud controls its workloads; a public cloud has random workloads. Random workload can affect your performance. Of course, workload is only one example. Use a risk assessment to determine your own concerns. Your success depends on understanding how cloud offerings function.
Accept that you may not be a good cloud candidate. Cloud isn’t practical for all firms. Each mix of
cloud service and delivery model changes costs, controls, and security, and each model suits certain tasks. The cloud model you choose depends on the security, control, and cost best for your firm. For help, consider what others in your marketplace are doing. For example:
- IaaS tasks commonly include IT facilities, hosting services, services, storage, etc.
- PaaS tasks include application development, data, workflow, security services (single sign on), database management, directory services, etc.
- SaaS tasks include Internet services, blogging, surveys, social networking, knowledge sharing, e-mail, collaboration, productivity tools, resource planning, etc.
Confirm your expectations of the cloud. Understand how cloud service and deployment models work for and against your firm. Efficiency is a result of higher resource utilization and lower administration costs. Agility results from fast provisioning of infrastructure. Innovation results from using service performance to find improvements cloud can deliver.
Assess your ability to acquire, provision, consume, and audit cloud services. These may be new skills for your team. IaaS consumers create, install, monitor and manage platforms for services and applications. PaaS consumers develop, test, deploy and manage applications hosted in the cloud. SaaS provides full applications via a network.
Begin by creating a team to consider this brief. Include cross-functional business and IT representatives. Determine how cloud features, service and deployment models affect your current operations. You’ll need to examine the knowledge, skills and abilities of your staff too, and you may find that you don’t have the right combination of people, process and tools. Use gap analysis to determine the knowledge, skills and abilities you need.