Head in the Clouds
Cloud computing typically refers to the delivery of software applications, data storage or processing power over the internet. In other words, cloud computing enables physical, often burdensome infrastructure surrounding IT to be managed offsite, allowing businesses to better focus their time and resources on core competencies. One simple illustration would be the replacement of a locally installed version of Microsoft Office in favor of Google Docs, which offers web-based word processing, spreadsheet and presentation applications. Currently, Google’s beta version of Docs has no where near the functionality of Microsoft’s software, but you get the idea.
From a small business perspective – an area in which I have plenty of firsthand experience – the advantages of cloud computing are numerous. It’s fast, inexpensive and worry-free. For example, Gmail now offers a corporate e-mail application. For $50 per year per user, a company can experience virtually all the functionality of hosting their own Microsoft Exchange Server without the everyday hassles of upgrading, maintaining and protecting local hardware and software. Each account includes 25 GB of data storage per user, and even the ability to POP messages onto Microsoft Outlook for those who are web-phobic. Furthermore, everything can be up and running in a couple of hours. I’m starting to sound like an advertisement for Google, so I’ll stop short of giving you a link to sign up.
Salesforce.com is another company that has made an entire business out of cloud computing. They offer customer relationship management (CRM) software-as-a-service that competes with the likes of Siebel and many others. With success to the tune of roughly $750 million in revenue in 2008 (51% growth over 2007), it’s easy to claim that cloud computing has arrived in a big way. Salesforce has even been able to leverage their relationships into adjacent service territories including idea management software that was adopted by big name clients, such as Starbucks and Dell. These leaps are made possible by the fact that infrastructure is not a roadblock to expansion.
So if you find yourself wondering why your company still uses Lotus Notes and Microsoft Office, here’s the sobering news. First off, the products are still immature. As I stated earlier, Google Docs is still in beta mode, and trust me – it’s VERY beta. I’m a power user of Excel, and Google’s spreadsheet program hardly scrapes the surface of Excel’s capabilities. Second, companies have concerns around security. My personal belief is that Gmail is probably more secure than any locally hosted mail server. Why? Because just like a car manufacturer makes a business out of making cars, Google makes a business out of securing privacy. The car maker is never going to be better than Google, so why not just let Google (or some other security specialist) handle the tertiary parts of the business? Third, these things don’t happen overnight. To put it lightly, you’ll have to rip existing multi-billion dollar IT infrastructures out of corporations’ cold dead hands before they let you implement something this radical. Take mobile payments for example. This technology is more or less ready to go, and probably has been for some time. However we stay married to the plastic in our wallets simply because the infrastructure at retail stores isn’t changing anytime soon (nor are the credit card companies pushing them to change).
Cloud computing is on its way, and has much to offer. But I wouldn’t be surprised if Office 2015 still resides on my local PC.
Tags: cloud computing, dell, Innovation, software as a service, starbucks
October 28th, 2008 at 4:28 pm
[…] When I wrote in on this topic in August, I was optimistic that cloud computing was the wave of the future for enterprise applications, but I questioned whether mainstreaming would occur anytime soon. Azure will certainly accelerate that timeline. And even though Azure is an obvious reaction to Google Apps, I like Microsoft’s chances. Microsoft enjoys a virtual stranglehold on the industry with their Office suite, and it will be a long, expensive and arduous process for any company to surmount the monopoly. Furthermore, Google Apps is yet to impress. Although Google is synonymous with innovation, they did a poor job of building products to truly compete with Microsoft Office. For example, their spreadsheet program lacks critical functionality for power users. Finally, the day is still far away from when large companies move to a pure cloud computing environment. Microsoft already has the locally installed Office to ease that transition, and in fact may bolster functionality due to compatibility between Azure and Office. […]