Part 2: Breaking through the Cloud - Key selling points

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In this special report, the editor of Manufacturing & Logistics IT Magazine, Ed Holden, interviewed 13 leading vendors from the world of IT software, hardware, consultancy and infrastructure to ask them what they consider to be many of the current key talking points within this fascinating technology space.

Demystifying the concept - Key selling points - What barriers to greater deployment remain - Serving the marketplace - The Cloud on the Horizon

This article is the second in a 4 part series. You can link directly to the full article in the digital edition of the magazine.  Click here... 

Cloud computing is one of the most revolutionary paradigm shifts of recent times within the IT world. End-user organisations are now able to run their preferred software applications on a highly flexible, shared data centre in the Cloud (Internet), rather than having to configure, customise, test, run and regularly upgrade these apps on their own servers. 

Champions of the Cloud architecture concept will also comment that this type of virtualisation enables companies to benefit from the rapid deployment of sophisticated, flexible and highly scaleable software solutions without having to commit to the up-front capital expenditure of the software licences. Instead, they are able to simply enter into a pay-per-use, monthly or quarterly billing arrangement with the vendor. But there remain some concerns related to security & confidentiality, compliance, quality of service, integration and long-term costs.

What are the main benefits of Cloud computing from a business-to-business perspective?

Jimmy Harris, Accenture 
I think the perceived benefits are changing. If you asked me what were the key benefits of Cloud Computing a year ago I would have said everyone's view is cost savings. This advantage is still available, but increasingly people are also looking at the Cloud from a flexibility and agility perspective. They are asking themselves how can I access resources when I need them, where I need them and at the time I need them. We have some assessment tools that better help clients think through how they can use their workload and consider how they could migrate some of their workload into Cloud services. Increasingly we are seeing this kind of thinking around agility and flexibility overtaking pure cost-related thinking.

Michael Klemen, Cisco
On advantage is Cloud within the context of pay-as-you-go IT services. Users pay only when they need it; they dont have to own the software and install it on their own server. A good analogy is the car market 50 years ago. Back then it was quite clear that you bought a new car, you drove it and after four years you sold it. Today, companies no longer own big fleets of cars; they own big contracts with leasing companies and they exchange the cars every three or four years. And now its a similar situation with IT technology. Its also like electricity coming out of the plug. You decide what you put into the plug it could be a refrigerator, a toaster or a computer you decide what you want to have. And this is what the Cloud offers; as soon as you have a network as a platform you really can have any kind of application delivered through the Cloud exactly to wherever you need it.

Colin Bannister, Computer Associates
Possibly the most important benefit is agility and how the Cloud can help companies to respond quicker to demand. For example, if a manufacturer wants to move into a new market or introduce a new product, being able scale up or down in terms of the level of use of a Cloud-based application to react quickly to greater or lesser demand for its goods is important. Another benefit is that by using more Cloud-based applications, a company should require less in-house IT resources.

Ron E Brown, CSC
One benefit of the Cloud is pricing transparency. The fact that you can pay as you go means you can exactly match the demand generated by the business for the services of the IT provider, and youre not carrying anything in stock. Another benefit concerning pricing is you can move your costs from the capital expenditure you would commit to on-premise applications to operational expenditure. For many commercial organisations this is a big advantage. Also, if you talk to a CFO of any reasonably large enterprise they will tell you that IT is a big item on their books. Not only does it account for a lot of the companys spend, but it can also be very difficult to place a true business value on IT assets. So Cloud is an opportunity to get those difficult-to-value and expensive items off the books.

James Norwood, Epicor
Two of the biggest benefits of Cloud Computing to customers are cost savings and flexibility in scalability. Users can to scale up and scale down their use as needed without that affecting their costs. In the case of an on-premise installation, a company might put in place an expensive IT system with a lot of capacity to support the business, but then find that later on that capacity isnt needed. However by then they are already saddled with the software and hardware. So probably the best benefit of the Cloud is it is there when you need it and you can scale back quickly when you dont with no penalties.

Steve Strutt, IBM
The Cloud concept is very much an opportunity to experiment with new business models, new ways of actually doing things without significant up-front investment. There will of course be some workloads that will need to remain stored on the companys on premise system for various reasons. Nevertheless, I think a migration of much of a companys data towards the Cloud could actually lower their costs in ways other than simply savings in up-front capital expenditure. For example, using Cloud-based services can save on IT maintenance costs. So rather than invest a lot of money in maintaining much of their existing premise-based infrastructure, the money could be used to invest more in business capabilities, and even additional IT. 

Raghavan Subramanian, Infosys
There are a number of both business and technology benefits to be had with Cloud computing. From a business perspective one benefit is that you can try before you buy. And from a technological perspective, businesses often want their on-premise infrastructure provisioned for peak demand, which means that when their demand is not peak the utilisation is very low. However, with the Cloud you dont have to over provision for peak loads; you can ramp up and ramp down your use of an application at will depending on your current business demand.

Steve Farr, Microsoft Dynamics 
The deployment model is not just the technology choice. Cloud computing really says OK you might have a group of highly skilled IT people but what is their value if theyre not doing things with your customers or your suppliers or the processes within your organisation. If they are just purely dealing with IT issues then that is outside your core competence and doesnt particularly contribute to your bottom line except in a negative fashion. If you can outsource aspects of IT management you can use the highly skilled people in question to do more strategic things and help you to drive your business. That, I think, is the core of Cloud computing for organisations big and small.

Andrew Bond, Oracle
The public Cloud offers a rental model as opposed to purchase model. But for me, in addition to cost advantages one of the major advantages should be around the quality of service. We have the ability to access dynamic resources that are highly flexible. And therefore as our demand grows we should be able to add additional resource from a resource pool in the Cloud and quickly and easily scale our operations to those extra resources.

Simon Black, Sage Pay
There are several significant benefits to customers. One is that any application in the Cloud can be accessed and managed from any location. So, for example, if a retailer has a roaring online trade and wants to regularly review his online transactions, he can log on from the office or log on from home or anywhere else, and look at how many transactions have gone through and how many people have paid by MasterCard or Visa. Also, because an application is instant hosted in the Cloud, you dont have to be concerned about upgrading applications sitting on your exchange server.

Kaj Van De Loo, SAP 
Currently there is large interest among our customers to have edge solutions on demand available in the Cloud; these are solutions that live around their existing core SAP business suites. For example, they could be sales force automation or time & expense management applications. So the biggest factor here is time to value. When you decide that you want to use an edge solution you can start often start using it within hours. Nevertheless, the verdict is still out regarding whether the total cost of ownership of these types of on-demand applications is lower than the on-premise ones because, to some extent, you get what you pay for.

Dave Carmichael, Sterling Commerce
When credit capital is in short supply you maybe dont want to use up large sums in up-front capital expenditure for new software. The Cloud gives users the ability to move this type of capital expense to an operational expense, and this is when it becomes compelling. Cash is king. So, I think that is the main perception as to one of the main benefits of the Cloud.

K Ananth Krishnan, Tata Consultancy Services
Some of the key benefits of Cloud Computing can be broadly classified under the following categories:

 Costs Operating expenditure instead of Capital expenditure.
 Time-to-Market Rapid provisioning.
 Elasticity.
 Availability.
 Self-Service.
 Simplicity Easy to consume.
 Efficiency through utilisation and virtualisation.

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