Why Cloud Computing Has Legspost by Chris Curran on February 2, 2010
For those who have been around IT for a while, the cloud computing wave has many of the same characteristics of any other fad: huge vendor investment, scads of new start-ups, a lot of media coverage and a few high-profile cases that you hear about over and over. After talking this through with Diamond’s CEO Adam Gutstein and our colleague John Sviokla, I think there is one thing that makes the cloud phenomenon different.
It directly addresses IT budget line items.
MIT’s Center for Information Systems Research periodically collect IT spend data from over 1,000 companies. They report spending across four categories: Infrastructure, Transactional, Information and Strategic. While it varies by industry, the infrastructure spend in their last report was around 40% of total. They boil the world of IT spending down to four simple categories and infrastructure is one of them and it accounts for 40% of all enterprise IT spend. One of the two compelling cloud computing stories is directly targeted at cheaper, greener and more elastic infrastructure. Bingo! [The other story is around business agility provided through cloud applications.]
I believe that the easier it is to see where a new technology can impact a business, the broader interest and acceptance it can have in the marketplace. As another example of this, take a look at service oriented architecture. SOA had a similar vendor and media buzz early but has since stalled. Try to find “SOA” on a top-line IT budget – you can’t. In fact, making a case for an architectural investment like SOA by itself is almost impossible.
To support the notion of an apparent fall in SOA interest, consider the responses we got from almost 600 business and IT execs on their current and planned SOA investments in our latest Diamond Digital IQ survey. Almost 70% surveyed haven’t and aren’t planning to invest in SOA. I believe that this has more to do with the complexity associated with the communication of its value than its overall utility.
I think that cloud computing, especially infrastructure clouds, will be more like application maintenance outsourcing in that they both have easily addressable budgets, are easy to understand and therefore, will be easy to sell organizationally.
What do you think?