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Cloud Enables Big Business to Play Like SMBs

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I can store pedabytes of data in the cloud. I can run my E-mail, communications, CRM, HR and Accounting in the cloud. My employees can live and work anywhere in the world thanks to the cloud.

The Internet was the great equalizer. On the Web small businesses and large enterprises were virtually indistinguishable from each other. Businesses with percent of revenue per employee of eighty percent, or greater, emerged overnight. The threat to large enterprises is real as demonstrated by Amazon and EBay, both small Web businesses that emerged to challenge the stronghold in their markets by dominant brick and mortar companies. But in a twist of fate, it is possible that cloud computing could provide the same advantage that Internet once provided Small- and Mid-sized Businesses (SMB) to large enterprises. The only thing standing in the way of large enterprises taking advantage of this opportunity will be the cultural constraints that limit their ability to change and adapt.

When one thinks of big enterprise today, one typically envisions big corporate headquarter buildings, maybe even campuses, thousands of employees, and lots of moving parts. Monolith is the word that I often associate with this image. One thing we’ve learned about monoliths is that they are typically not agile and respond adversely to change. However, just as the Internet emerged as an equalizing force that empowered small businesses to compete head-to-head with these monoliths, and in some cases become one, for big enterprises that can recognize the opportunity, the cloud can become the force that allows them to play at the same high revenue per employee model that is empowering small businesses.

Realize that cloud computing is in its infancy today. The discussions regarding cloud computing revolve around security and availability with large businesses holding fast and tight to the notion that cloud concepts are great, but we need to build and own our cloud computing infrastructure. While true in the near term, this will not be the case three to five years out and the short term thinking leads to continued investment in centralized systems that will continue to need to be refreshed and expanded in an attempt to remain relevant and competitive.

Here’s an example I use in my cloud adoption presentations. Through 2002, most employees accessed their email through a single client application, typically only using the work LAN, and typically during prime working hours, such as 8am to 6pm. With the emergence of the RIM Blackberry, email traffic was doubled as a copy was stored in the email server and sent to the device. In 2011, the same email accounts are now simultaneously accessed over both the corporate WAN and LAN, using multiple devices directly accessing the mail server. The net result is an explosion in network traffic, data duplication, and increased surface area for cyber attack. Moreover, corporate users are now expecting this same level of accessibility for the rest of the applications they use to complete their work. Furthermore, as the generation raised on iPhones, iPads, & iPods enter the workforce, their expectations for speed, accessibility and resource consumption is going to weigh exponentially on the already stressed corporate computing environment.

Technically, these issues can be overcome, but solving the problem technically is not the same thing as embracing the opportunity to change a way of doing business. Realize that SMBs are already embracing cloud out of necessity. They do not have the capital to develop large, centralized data centers and are forced to take advantage of lower cost, more agile solutions. Once again, their limitations may end up being their primary advantage. However, if large enterprises can recognize that cloud computing affords them the same advantages that are afforded to SMBs they will have a significant competitive advantage in the market. This will require that big business loosen the reigns of control over applications and data and allows their users to choose the best tools for delivering the best products and services. Most likely, those choices will lead to cloud-based solutions.

Needless to say, cloud sprawl that might ensue based on this approach is real and needs to be managed. Without going into detail with regard to handling this situation, suffice to say that the big business must implement appropriate governance to manage this situation and to ensure that the data is safe, available and can be shared among various parties within the business. This scenario is manageable and the freedom afforded your staff will mean that they can do more, which should, hopefully, result in greater profit for the same levels of expenditure. Thus, big business will be able to compete on value with SMB while offering greater stability and more service.

Source: http://www.jpmorgenthal.com/morgenthal/?p=266

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