Although I’ve refused to get into the “what is cloud computing” argument over the years, it doesn’t mean I don’t have a very specific definition. I believe down at the very core of cloud computing sits an airtight, inviolable principle: A cloud enables the buyer to forgo asset ownership.
+ Also on Network World: Banking on the cloud +
Through my years of consulting I have come to the conclusion that technology asset ownership is an addiction and one that must be overcome through willpower, a support network and a change in habit. I’ve had to commiserate too often with CIOs despondent over the failure of private clouds that don’t meet their goals to remain silent. The best way to illustrate my point is to consider the approaches of my fictional, but all too real, clients: Accumulation, Inc. and Leverage Enterprises.
Accumulation, Inc. has a new idea that they encapsulate in a mobile app and new process on their website. Excited by the results of the proof of concept and potential market size, the business gives the green light and puts their faith in the hands of IT.
At some point during the design phase an executive asks, “Can we do this on existing hardware?” Round after round of discussions ensue until the enterprise and software architects are browbeaten into accepting a sub-optimal infrastructure design because it’s “standard,” maximizes IT’s return on assets (ROA) and is the “low-risk” option. After all, Accumulation, Inc. executives have a fiscal responsibility to drive ROA and manage risk.
Unfortunately, when the market dries up and sales drop, the costs are fixed and threaten to push the business into the red. Excessive costs accumulate until the solution is finally resized with excess assets decommissioned after paying penalties for early lease termination.
A strong competitor in the market, Leverage Enterprises has the same idea and also translates it into a mobile app and new website process.