With the fast moving technological world, companies are leveraging the use of information technology to have a competitive edge over the others. Organizations have shifted to the use of technology platforms to compete and not the availability of new markets anymore. Clients are looking for companies which use state-of-the-art technologies. Worldwide experience has shown that the use of advanced technologies is the main source of competitive advantage for many growing manufacturing and service industries. Although this is a fact, many companies, especially small to medium sized enterprises often miss out on pretty good opportunities for advancement because they dont have good systems and structures coupled with the fact that they dont have the right people to monitor and follow every step of the moving technology that is available.
Ramiler, Swanson (2004) say that The companies which are slow in adopting new technologies will pile their lack of tapping into the benefits of new technologies and they will, in the end, be disadvantaged and miss out on great opportunities. It is not expected that they will fall immediately but they will add on to their past failures.
Cloud computing is one of the latest technologies that is the buzzword in the technology sector today. Many companies are bracing themselves for the use of this technology to leverage their operations and come up with cheaper storage solutions for their businesses. Companies have gone a notch higher to set up their own clouds and thus the coming up of private clouds in companies. The following sections will look into the structure of private cloud as compared with other cloud computing systems like the public cloud and hybrid cloud. It will also look into how companies are using this technology to leverage their businesses for more profitability.
Cloud computing
Cloud computing is a technology where data and different applications are stored on storage networks and servers which are located in a remote place and accessed by the users via the Internet. This technology of cloud computing allows businesses and consumers to get access to applications without the need of installing them on their own on-site servers. The applications are installed on remote servers. In the normal way of applications use, consumers purchase licenses for application software from their software provider and install them on their on-site servers. In cloud computing case, it is On Demand basis where consumers pay a subscription fee for the service. The use of this technology increases efficiency because the storage, memory and processing are centralized.
Types of cloud computing
There are three types of cloud computing. The first is the Software as a service (SaaS). This is the cloud computing type where applications are installed on the remote servers and then offered to the consumer as a service. A single instance of the application software is set to run on the cloud and serves multiple users or organizations. In the traditional software use, users would purchase the license and install them on their on-site servers. With cloud computing, the end-user will pay for the service as he uses it.
The second type of cloud computing is the Platform as a service (PaaS). Most companies started by providing SaaS to the end-users. Most of these companies have also started developing platform services for the end-users. In PaaS, products are provided to enable applications to be deployed on the end-users. Platforms act as an interface to enable users to get access to applications which are provided by partners or by customers. Some of the big players in this cloud computing industry like Microsoft, and Amazon have provided platforms which include Windows Live for Microsoft, Apps Engine for Google and EC2 for Amazon. Providers like Amazon, Google, and Microsoft have developed platforms which enable users to gain access to applications stored on centralized servers (Geelan 2009).
The last type of cloud computing is the infrastructure, which is the backbone of cloud computing. It is concerned with delivering basic storage and computer capabilities as standardized services over the network. The vendors provide the physical storage space and the capabilities for processing to enable the execution of all the services run in the cloud. This segment of cloud computing include managed hosting, and development environments such as those of Google gears which enable users to be able to build applications. The hardware which are used for cloud computing are pooled and made available to handle the workload ranging from application components to high-performance computing applications. There are commercial examples of Infrastructure as a service which have been developed on the Internet. One of them is the Joyent whose main product is a group of virtual servers that provide a highly available on-demand infrastructure.
Private cloud architecture
The private cloud is a different architecture on the mainstream version in the sense that smaller IT systems within the company firewall offer the same services of cloud computing but now on a closed internal network. The network may include division offices or corporate divisions within the company, other companies which are business partners, suppliers of raw-materials, resellers, and other organizations which are connected with the mother company.
Private cloud, also known as internal cloud, forms one of the architectures of cloud computing. These are offerings that represent cloud computing on private networks. This type of cloud computing has been widely claimed to provide benefits like capitalizing on data security, corporate governance and reliability concerns. The disadvantage comes in the sense that consumers still have to buy, build and manage them, which defeats the reason why they shifted to cloud computing in the first place. This also does not benefit from lower-front cost of capital and has less hands-on management, which essentially makes it lack the economic model that makes cloud computing such an intriguing concept. Research has shown that cloud computing will be headed this way in few years to come.
Technology used
Private cloud, and by extension cloud computing in general can be divided into two front end and back end. These two are connected to each other through the Internet. The front end usually represents the side of the clients who use the Internet while the back end represents the section consisting of the cloud itself. The front end will normally consist of the clients computer and software that act as the interface in order for the client to access the application from the Web server. Most of the Interfaces are the web browsers like Internet Explorer or Firefox. Other systems require unique applications that provide network access to clients.
Servers dont run at full capacity most of the time and therefore renders most of the processing power to waste. There is a way that the server can be manipulated into getting a notion that we have multiple servers on the network with each server running its own operating system. This technique is called server virtualization. With this technique, the servers are used optimally thus reducing the need to have more servers on the network.
The back end of cloud computing consist of various computers, servers and storage systems, all of which form the cloud part of cloud computing. Theoretically, cloud computing can include all kinds of applications which are installed on their own dedicated servers.
There is then a central server which is used to administer the system and monitors the traffic within the cloud. It also handles all the requests from the clients. Fro it to achieve all these, it follows a set of rules called the protocols and uses special kind of software called middleware. This software enables computers on the network to communicate with each other. The central server makes sure that everything runs smoothly.
There are cases where the clients will need more disk space and will therefore require the providers to have some provision for this to be met. The providers will, on top of this, have some extra storage for the storage of backup data so that in case there is a breakdown, they will be able to access the backup. The process of making copies of data as a backup is called redundancy.
Private and public computing compared
Cloud computing has been in place since the advent of Web 2.0 and since then there has been new developments. It is emerging that there are two faces that cloud computing can take private cloud computing and public cloud computing. Many technology experts see private cloud as the preferred choice for future companies because it gives more control to the users than public cloud where all the control is left with the cloud computing provider.
There is a simple difference between private cloud and public cloud. This difference lies in the way the two are deployed. A public cloud is usually deployed as a service over an Internet connection. In the case of a private cloud, the deployment is inside the firewall and they are managed by the organization using it. Their difference lies in their locality and yet this simple difference drives unique experiences and capabilities to the end user.
Another difference between the two infrastructures is that with public clouds, there is a fee charged per gigabyte combined with bandwidth transfer charges. The users therefore can scale the storage as they need and will forego the need to buy any required hardware. It is the work of the service providers to manage the infrastructure and pool resources into capacity that is required by the client.
Private clouds are built on hardware that are located and running on the hardware of the customer unlike in the case of the public cloud where the software is running on the cloud service providers hardware. The storage in a private cloud is usually not shared outside the company thus full control remains with the company. For the company to achieve the adding of capacity it simply adds another server to the pool and the self-managing architecture expands the cloud by adding capacity and performance.
Effects of private cloud computing on business
When a major technology arrives in information technology, there is anxiety as it is not so clear what the effects will be positive or negative. It is due to this anxiety that big organizations will take the wait-and-see attitude towards new technologies for fear of ruining their businesses or being left by their competition if they ignore the said new technology. There are occasions where the shift will offer cost benefits and will bring improvements to operations. It may even bring new ways of tackling business problems that offer important strategic advantage. If the benefit seems to be larger, the high likelihood of a company to quickly embrace them.
Private computing, and by extension cloud computing at large, is developing very fast and is shaping businesses. The technology is showing both considerable interest and momentum in the space (Knorr, Gruman, 2009).
Although there is this hype in cloud computing, there still many questions that still remain unanswered with cloud computing. There are also some risks and challenges in adopting cloud computing for the so-called minor applications and non-critical business systems.
There are some benefits though, of cloud computing which by far outweigh the risks and challenges. These benefits will be to those companies which are proactive in managing the downsize that may come with cloud computing. These benefits will include the availability of an easier change management of the information technology infrastructure which includes upgrades and maintenance. The economics of scale will also be achieved because with a private cloud, the many clients in a company will be able to access the application software that is installed on the server machines without the need to buy individual software for the many client machines in the company.
The good side of new technologies, more so cloud computing, is that innovative companies will have the opportunity to come up with solutions that were hitherto impossible to come up with. It will offer small opportunities for companies to enjoy the economies of scale that come up with this new technology. What is more, business ideas which required more computing power, scale, or new business models like Global Service oriented architecture but could not be effected because of technical bottlenecks can now be achieved. Every improvement that is directed towards storage, processing speed, or technology were hard to be achieved at initially but cloud computing has made this achievable. It is only smart companies who will notice this irresistible move.
There is a new awareness and leverage of the greater Internet particularly Web 2.0. The Web has advanced especially with the introduction of Web 2.0. The challenges in scale, and performance has created solutions for businesses, both large and small, and has come up with infrastructures that can address challenges in a powerful and economical ways that many companies have found no equal. The employment of SaaS, non-relational databases will in the end serve companies well in the new company cloud. This will enable companies to gain new skills and perspectives that are needed to compete well in the 21st century.
Cloud computing has been a good match of SOA. With cloud computing, SOA will be improved and changed for the better. Web Oriented Architecture has been found to fit well with cloud technologies which are based on the Web. Traditional SOA will not suffice with the development of cloud computing because it will be moved to a place where new business and technical requirements with faster rate of changes will be achieved. It will be common to see the phasing out of traditional SOA and the emergence of new technologies that will bring more efficiency to businesses (Dodani, 2009).
More on the business, there will be advantages to businesses when they adopt cloud computing because more users will not require IT personnel in order to get the service. There will be more self-service IT from the business side. There will be less and less involvement of the IT department because it is more about Software-as-a-Service. Many business users will be in a position to adopt future cloud computing by the use of self-service.
With new technologies like cloud computing and particularly private cloud, there will be more tolerance for innovation and a lot of experimentation form businesses. There will be fewer barriers to creating new ways of doing businesses. It will pave way for prototyping and market validation of new approaches in a much faster and less expensive than before. The other sectors of the organization like branding, legal, and compliance will struggle to keep up the pace with the other sectors and thus the gradual change of the organization will be seen as cloud computing bring business possibilities to be possible in the world of cloud computing. Although this will not fix broken innovation mechanisms in businesses, but on the other side, cloud computing is accessible which enables new internal entrepreneurs to use the cloud computing tools to create new solutions anyway (Fowler, Worthen, 2009)
The firms which are slow in adopting new technologies will find it hard to compete with the fast-adopters. The failure to adopt cloud computing does not bring immediate fall to these companies but it will instead pile onto the more recent advancements and make it even harder to compete in the fast-moving technology world. In the end, the slow adopters will face serious and growing economic and business disadvantages.
Best practices for business eying cloud computing
Cloud computing has been on everyones mind and in every meeting done on how to implement cloud computing. It is perceived that cloud computing will increase efficiency, cut costs, and bring robust scalability. Any enterprise planning to shift to cloud computing should make sure that there is a good plan in place and that all operations are all streamlined to be in line with what cloud computing will bring. Without this, the benefits of cloud computing might be short-lived in an enterprise (Martin, Hoover, 2008).
In particular, large enterprises need to be able to integrate cloud computing to existing IT system. Few organizations are willing to start from scratch. It is therefore imperative for organizations to plan for integration challenges at the start.
The best practice to be observed is the creation of a strategy and a set of realistic goals at the beginning of the implementation process. Mahmood Mo (2000) stress that just like any project to be undertaken there must be goals which are realistic and time-bound. The finances and budget allocation should be well catered for so that available resources are well documented. Although cloud computing is promising a return on investment for any organization, it is still imperative that cost and complexity should be kept at minimum.
The other best practice to be undertaken is that the enterprise should learn the pitfalls of other companies which have implemented the technology. This is because those enterprises who adopted the technology first, took a stand alone approach. By then, the services were readily available and easy to consume. There were few implementation challenges. On the other hand, enterprises where traditional IT infrastructure is used to serve core business operations, the cloud which is detached might only deliver short-term value and will in future require another implementation of the same or complete migration. The a stand-alone approach has a risk of creating single applications which stand on their own, clouds which are integrated have a potential of delivering long-term results.
The third best practice for cloud computing is that upfront costs should be avoided as much as possible. The main reason why enterprises are running away from traditional processes of buying licenses is largely attributed to risk mitigation (Scheier, 2009). With SaaS, you simply turn the system off if it is not working. The consumer only pays for what they use. Care is taken by companies so that company operations are not jeopardized with the purchasing of software licenses. The consumer should ask or the provider to give them flexible subscription model.
The next practice to be taken care of is that the technology should be easy to be used by the business users. They dont have to know the complex techniques so that they are able to operate. Unlike the integration of on-site applications where it has traditionally required the presence of a team of IT specialists who are knowledgeable of the frameworks of the systems for a good installation of the software, in the case of cloud computing, management is to be handled by business users. These are non-domain experts who will be required to connect data with other enterprise systems. It is expected that cloud computing should bring with it a minimal need for development, implementation, and maintenance resources which will allow users to focus on their core business.
The other very vital practice to be considered is that of security. It has been discovered that many chief information officers and IT executives give security as their number one area of concern when it comes to implementation of cloud computing. This is especially true because with cloud computing, data is moved from an on-site premise to a cloud (Ward, Elizabeth, Peppard, 2008). It is vital to know where the data is stored and who has access to this data. When considering implementing cloud computing, one should look keenly and determine which standards will be implemented for securing data in transit. It is worth noting that enterprises move more enterprises to the cloud, which in turn increases the volume of sensitive data flowing between the two points. The cloud computing providers should be able to assure the consumers that the transit of this sensitive data is secure and free from interception.
The performance and availability of the data should also be assured. With improvement in cloud computing services, today, services from cloud computing provide high levels of availability making it outdo the traditional internal infrastructure. This is true because as long there is an Internet connection, the data is available for the consumer. There are integration requirements that should be considered when designing a cloud strategy which will include whether a system will be real time, near real time or batch, and then use it to determine the number of simultaneous requests to be handled and give a specification of all special architectural requirements. The success will be achieved by ensuring that information will not be lost in case the on-site or the cloud is down. The cloud will sometimes go down this requires the enterprise to consider adopting a backup plan.
The last practice that should be considered is the maximization of connectivity. With the increase in connectivity in organizations, it is becoming clear that future enterprises will require more connectivity and solutions will come by integration of information from enterprise social computing. The requirements to connect will continue to evolve and will go beyond standard enterprise applications, databases, and legacy systems to more modern Web service and Web 2.0 APIs.
Case study Oticon story
The Danish company for manufacturing hearing-aid, Oticon, was the leading and the monopoly company in this sector up to 1980s. It was in early 1980s that a rival company introduced the first in-the-ear hearing aid which was less conspicuous than Oticons devices which was stuck behind the ear (Lagace, 2003). The then US-president, Ronald Reagan started wearing one. This new device gained much popularity than the Otoicons device and made Oticon lose 50 of the market share. This is because Oticons engineers firmly believed that their device was the best fit and they mass-produced their devices hoping to out-compete their rival this way. This way, their traditional way of competing with new technologies, called active inertia, led the CEO of Oticon to be shown the door and the recruiting of a new chief who saw the use of new technologies in Oticon. Gradually, Oticon started gaining balance (Lagace, 2003).
Negative impact of technology
Cutting edge technologies is not that good if some factors will not be taken into consideration. What will happen if the private cloud is down Will this mean that the business will be brought to a standstill These are the questions that should be put in place when contemplating on setting up new technologies. Private cloud will be problematic to the company if it goes down and there is no technical staff to work on it. What is more, with IT department being less involved, it will be problematic to the business and may even lead to loss of revenue just because the system is down.
The initial cost of setting up a private cloud on the company enterprise may seem higher given the hardware that the enterprise is required to purchase. This will defeat the purpose of setting up the cloud in he first place because, with public cloud the economies of scale is achieved. The enterprise is the one that will meet all the hardware cost in the case of private cloud.
Technology has been proved to bring profitability to businesses. The use of it has seen companies gain competitive edge above their competition. Google, for example, has gained much popularity in the addition of functionality in their search engine application. The addition of Ajax made their search engine much efficient compared to others. As companies shift towards the use of new technologies factors such as security should be looked into before jumping into the boat. For organizations which are slow in technology adoption, they will find goal posts shifted.
Ramiler, Swanson (2004) say that The companies which are slow in adopting new technologies will pile their lack of tapping into the benefits of new technologies and they will, in the end, be disadvantaged and miss out on great opportunities. It is not expected that they will fall immediately but they will add on to their past failures.
Cloud computing is one of the latest technologies that is the buzzword in the technology sector today. Many companies are bracing themselves for the use of this technology to leverage their operations and come up with cheaper storage solutions for their businesses. Companies have gone a notch higher to set up their own clouds and thus the coming up of private clouds in companies. The following sections will look into the structure of private cloud as compared with other cloud computing systems like the public cloud and hybrid cloud. It will also look into how companies are using this technology to leverage their businesses for more profitability.
Cloud computing
Cloud computing is a technology where data and different applications are stored on storage networks and servers which are located in a remote place and accessed by the users via the Internet. This technology of cloud computing allows businesses and consumers to get access to applications without the need of installing them on their own on-site servers. The applications are installed on remote servers. In the normal way of applications use, consumers purchase licenses for application software from their software provider and install them on their on-site servers. In cloud computing case, it is On Demand basis where consumers pay a subscription fee for the service. The use of this technology increases efficiency because the storage, memory and processing are centralized.
Types of cloud computing
There are three types of cloud computing. The first is the Software as a service (SaaS). This is the cloud computing type where applications are installed on the remote servers and then offered to the consumer as a service. A single instance of the application software is set to run on the cloud and serves multiple users or organizations. In the traditional software use, users would purchase the license and install them on their on-site servers. With cloud computing, the end-user will pay for the service as he uses it.
The second type of cloud computing is the Platform as a service (PaaS). Most companies started by providing SaaS to the end-users. Most of these companies have also started developing platform services for the end-users. In PaaS, products are provided to enable applications to be deployed on the end-users. Platforms act as an interface to enable users to get access to applications which are provided by partners or by customers. Some of the big players in this cloud computing industry like Microsoft, and Amazon have provided platforms which include Windows Live for Microsoft, Apps Engine for Google and EC2 for Amazon. Providers like Amazon, Google, and Microsoft have developed platforms which enable users to gain access to applications stored on centralized servers (Geelan 2009).
The last type of cloud computing is the infrastructure, which is the backbone of cloud computing. It is concerned with delivering basic storage and computer capabilities as standardized services over the network. The vendors provide the physical storage space and the capabilities for processing to enable the execution of all the services run in the cloud. This segment of cloud computing include managed hosting, and development environments such as those of Google gears which enable users to be able to build applications. The hardware which are used for cloud computing are pooled and made available to handle the workload ranging from application components to high-performance computing applications. There are commercial examples of Infrastructure as a service which have been developed on the Internet. One of them is the Joyent whose main product is a group of virtual servers that provide a highly available on-demand infrastructure.
Private cloud architecture
The private cloud is a different architecture on the mainstream version in the sense that smaller IT systems within the company firewall offer the same services of cloud computing but now on a closed internal network. The network may include division offices or corporate divisions within the company, other companies which are business partners, suppliers of raw-materials, resellers, and other organizations which are connected with the mother company.
Private cloud, also known as internal cloud, forms one of the architectures of cloud computing. These are offerings that represent cloud computing on private networks. This type of cloud computing has been widely claimed to provide benefits like capitalizing on data security, corporate governance and reliability concerns. The disadvantage comes in the sense that consumers still have to buy, build and manage them, which defeats the reason why they shifted to cloud computing in the first place. This also does not benefit from lower-front cost of capital and has less hands-on management, which essentially makes it lack the economic model that makes cloud computing such an intriguing concept. Research has shown that cloud computing will be headed this way in few years to come.
Technology used
Private cloud, and by extension cloud computing in general can be divided into two front end and back end. These two are connected to each other through the Internet. The front end usually represents the side of the clients who use the Internet while the back end represents the section consisting of the cloud itself. The front end will normally consist of the clients computer and software that act as the interface in order for the client to access the application from the Web server. Most of the Interfaces are the web browsers like Internet Explorer or Firefox. Other systems require unique applications that provide network access to clients.
Servers dont run at full capacity most of the time and therefore renders most of the processing power to waste. There is a way that the server can be manipulated into getting a notion that we have multiple servers on the network with each server running its own operating system. This technique is called server virtualization. With this technique, the servers are used optimally thus reducing the need to have more servers on the network.
The back end of cloud computing consist of various computers, servers and storage systems, all of which form the cloud part of cloud computing. Theoretically, cloud computing can include all kinds of applications which are installed on their own dedicated servers.
There is then a central server which is used to administer the system and monitors the traffic within the cloud. It also handles all the requests from the clients. Fro it to achieve all these, it follows a set of rules called the protocols and uses special kind of software called middleware. This software enables computers on the network to communicate with each other. The central server makes sure that everything runs smoothly.
There are cases where the clients will need more disk space and will therefore require the providers to have some provision for this to be met. The providers will, on top of this, have some extra storage for the storage of backup data so that in case there is a breakdown, they will be able to access the backup. The process of making copies of data as a backup is called redundancy.
Private and public computing compared
Cloud computing has been in place since the advent of Web 2.0 and since then there has been new developments. It is emerging that there are two faces that cloud computing can take private cloud computing and public cloud computing. Many technology experts see private cloud as the preferred choice for future companies because it gives more control to the users than public cloud where all the control is left with the cloud computing provider.
There is a simple difference between private cloud and public cloud. This difference lies in the way the two are deployed. A public cloud is usually deployed as a service over an Internet connection. In the case of a private cloud, the deployment is inside the firewall and they are managed by the organization using it. Their difference lies in their locality and yet this simple difference drives unique experiences and capabilities to the end user.
Another difference between the two infrastructures is that with public clouds, there is a fee charged per gigabyte combined with bandwidth transfer charges. The users therefore can scale the storage as they need and will forego the need to buy any required hardware. It is the work of the service providers to manage the infrastructure and pool resources into capacity that is required by the client.
Private clouds are built on hardware that are located and running on the hardware of the customer unlike in the case of the public cloud where the software is running on the cloud service providers hardware. The storage in a private cloud is usually not shared outside the company thus full control remains with the company. For the company to achieve the adding of capacity it simply adds another server to the pool and the self-managing architecture expands the cloud by adding capacity and performance.
Effects of private cloud computing on business
When a major technology arrives in information technology, there is anxiety as it is not so clear what the effects will be positive or negative. It is due to this anxiety that big organizations will take the wait-and-see attitude towards new technologies for fear of ruining their businesses or being left by their competition if they ignore the said new technology. There are occasions where the shift will offer cost benefits and will bring improvements to operations. It may even bring new ways of tackling business problems that offer important strategic advantage. If the benefit seems to be larger, the high likelihood of a company to quickly embrace them.
Private computing, and by extension cloud computing at large, is developing very fast and is shaping businesses. The technology is showing both considerable interest and momentum in the space (Knorr, Gruman, 2009).
Although there is this hype in cloud computing, there still many questions that still remain unanswered with cloud computing. There are also some risks and challenges in adopting cloud computing for the so-called minor applications and non-critical business systems.
There are some benefits though, of cloud computing which by far outweigh the risks and challenges. These benefits will be to those companies which are proactive in managing the downsize that may come with cloud computing. These benefits will include the availability of an easier change management of the information technology infrastructure which includes upgrades and maintenance. The economics of scale will also be achieved because with a private cloud, the many clients in a company will be able to access the application software that is installed on the server machines without the need to buy individual software for the many client machines in the company.
The good side of new technologies, more so cloud computing, is that innovative companies will have the opportunity to come up with solutions that were hitherto impossible to come up with. It will offer small opportunities for companies to enjoy the economies of scale that come up with this new technology. What is more, business ideas which required more computing power, scale, or new business models like Global Service oriented architecture but could not be effected because of technical bottlenecks can now be achieved. Every improvement that is directed towards storage, processing speed, or technology were hard to be achieved at initially but cloud computing has made this achievable. It is only smart companies who will notice this irresistible move.
There is a new awareness and leverage of the greater Internet particularly Web 2.0. The Web has advanced especially with the introduction of Web 2.0. The challenges in scale, and performance has created solutions for businesses, both large and small, and has come up with infrastructures that can address challenges in a powerful and economical ways that many companies have found no equal. The employment of SaaS, non-relational databases will in the end serve companies well in the new company cloud. This will enable companies to gain new skills and perspectives that are needed to compete well in the 21st century.
Cloud computing has been a good match of SOA. With cloud computing, SOA will be improved and changed for the better. Web Oriented Architecture has been found to fit well with cloud technologies which are based on the Web. Traditional SOA will not suffice with the development of cloud computing because it will be moved to a place where new business and technical requirements with faster rate of changes will be achieved. It will be common to see the phasing out of traditional SOA and the emergence of new technologies that will bring more efficiency to businesses (Dodani, 2009).
More on the business, there will be advantages to businesses when they adopt cloud computing because more users will not require IT personnel in order to get the service. There will be more self-service IT from the business side. There will be less and less involvement of the IT department because it is more about Software-as-a-Service. Many business users will be in a position to adopt future cloud computing by the use of self-service.
With new technologies like cloud computing and particularly private cloud, there will be more tolerance for innovation and a lot of experimentation form businesses. There will be fewer barriers to creating new ways of doing businesses. It will pave way for prototyping and market validation of new approaches in a much faster and less expensive than before. The other sectors of the organization like branding, legal, and compliance will struggle to keep up the pace with the other sectors and thus the gradual change of the organization will be seen as cloud computing bring business possibilities to be possible in the world of cloud computing. Although this will not fix broken innovation mechanisms in businesses, but on the other side, cloud computing is accessible which enables new internal entrepreneurs to use the cloud computing tools to create new solutions anyway (Fowler, Worthen, 2009)
The firms which are slow in adopting new technologies will find it hard to compete with the fast-adopters. The failure to adopt cloud computing does not bring immediate fall to these companies but it will instead pile onto the more recent advancements and make it even harder to compete in the fast-moving technology world. In the end, the slow adopters will face serious and growing economic and business disadvantages.
Best practices for business eying cloud computing
Cloud computing has been on everyones mind and in every meeting done on how to implement cloud computing. It is perceived that cloud computing will increase efficiency, cut costs, and bring robust scalability. Any enterprise planning to shift to cloud computing should make sure that there is a good plan in place and that all operations are all streamlined to be in line with what cloud computing will bring. Without this, the benefits of cloud computing might be short-lived in an enterprise (Martin, Hoover, 2008).
In particular, large enterprises need to be able to integrate cloud computing to existing IT system. Few organizations are willing to start from scratch. It is therefore imperative for organizations to plan for integration challenges at the start.
The best practice to be observed is the creation of a strategy and a set of realistic goals at the beginning of the implementation process. Mahmood Mo (2000) stress that just like any project to be undertaken there must be goals which are realistic and time-bound. The finances and budget allocation should be well catered for so that available resources are well documented. Although cloud computing is promising a return on investment for any organization, it is still imperative that cost and complexity should be kept at minimum.
The other best practice to be undertaken is that the enterprise should learn the pitfalls of other companies which have implemented the technology. This is because those enterprises who adopted the technology first, took a stand alone approach. By then, the services were readily available and easy to consume. There were few implementation challenges. On the other hand, enterprises where traditional IT infrastructure is used to serve core business operations, the cloud which is detached might only deliver short-term value and will in future require another implementation of the same or complete migration. The a stand-alone approach has a risk of creating single applications which stand on their own, clouds which are integrated have a potential of delivering long-term results.
The third best practice for cloud computing is that upfront costs should be avoided as much as possible. The main reason why enterprises are running away from traditional processes of buying licenses is largely attributed to risk mitigation (Scheier, 2009). With SaaS, you simply turn the system off if it is not working. The consumer only pays for what they use. Care is taken by companies so that company operations are not jeopardized with the purchasing of software licenses. The consumer should ask or the provider to give them flexible subscription model.
The next practice to be taken care of is that the technology should be easy to be used by the business users. They dont have to know the complex techniques so that they are able to operate. Unlike the integration of on-site applications where it has traditionally required the presence of a team of IT specialists who are knowledgeable of the frameworks of the systems for a good installation of the software, in the case of cloud computing, management is to be handled by business users. These are non-domain experts who will be required to connect data with other enterprise systems. It is expected that cloud computing should bring with it a minimal need for development, implementation, and maintenance resources which will allow users to focus on their core business.
The other very vital practice to be considered is that of security. It has been discovered that many chief information officers and IT executives give security as their number one area of concern when it comes to implementation of cloud computing. This is especially true because with cloud computing, data is moved from an on-site premise to a cloud (Ward, Elizabeth, Peppard, 2008). It is vital to know where the data is stored and who has access to this data. When considering implementing cloud computing, one should look keenly and determine which standards will be implemented for securing data in transit. It is worth noting that enterprises move more enterprises to the cloud, which in turn increases the volume of sensitive data flowing between the two points. The cloud computing providers should be able to assure the consumers that the transit of this sensitive data is secure and free from interception.
The performance and availability of the data should also be assured. With improvement in cloud computing services, today, services from cloud computing provide high levels of availability making it outdo the traditional internal infrastructure. This is true because as long there is an Internet connection, the data is available for the consumer. There are integration requirements that should be considered when designing a cloud strategy which will include whether a system will be real time, near real time or batch, and then use it to determine the number of simultaneous requests to be handled and give a specification of all special architectural requirements. The success will be achieved by ensuring that information will not be lost in case the on-site or the cloud is down. The cloud will sometimes go down this requires the enterprise to consider adopting a backup plan.
The last practice that should be considered is the maximization of connectivity. With the increase in connectivity in organizations, it is becoming clear that future enterprises will require more connectivity and solutions will come by integration of information from enterprise social computing. The requirements to connect will continue to evolve and will go beyond standard enterprise applications, databases, and legacy systems to more modern Web service and Web 2.0 APIs.
Case study Oticon story
The Danish company for manufacturing hearing-aid, Oticon, was the leading and the monopoly company in this sector up to 1980s. It was in early 1980s that a rival company introduced the first in-the-ear hearing aid which was less conspicuous than Oticons devices which was stuck behind the ear (Lagace, 2003). The then US-president, Ronald Reagan started wearing one. This new device gained much popularity than the Otoicons device and made Oticon lose 50 of the market share. This is because Oticons engineers firmly believed that their device was the best fit and they mass-produced their devices hoping to out-compete their rival this way. This way, their traditional way of competing with new technologies, called active inertia, led the CEO of Oticon to be shown the door and the recruiting of a new chief who saw the use of new technologies in Oticon. Gradually, Oticon started gaining balance (Lagace, 2003).
Negative impact of technology
Cutting edge technologies is not that good if some factors will not be taken into consideration. What will happen if the private cloud is down Will this mean that the business will be brought to a standstill These are the questions that should be put in place when contemplating on setting up new technologies. Private cloud will be problematic to the company if it goes down and there is no technical staff to work on it. What is more, with IT department being less involved, it will be problematic to the business and may even lead to loss of revenue just because the system is down.
The initial cost of setting up a private cloud on the company enterprise may seem higher given the hardware that the enterprise is required to purchase. This will defeat the purpose of setting up the cloud in he first place because, with public cloud the economies of scale is achieved. The enterprise is the one that will meet all the hardware cost in the case of private cloud.
Technology has been proved to bring profitability to businesses. The use of it has seen companies gain competitive edge above their competition. Google, for example, has gained much popularity in the addition of functionality in their search engine application. The addition of Ajax made their search engine much efficient compared to others. As companies shift towards the use of new technologies factors such as security should be looked into before jumping into the boat. For organizations which are slow in technology adoption, they will find goal posts shifted.
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