The presentations so far this morning have taken a different tack on cloud computing than yesterday's presentations. I begin to see why cloud computing may be the game changer that is so hyped to be. Here's a few thoughts from different presentations that I think tie together into a compelling argument.
You've heard of 80/20 rules, I'm sure. Here's one. Organizations spend roughly 80% of their IT budgets on existing infrastruture and 20% on innovation. We see this at F&M also. The large majority of our budget is already spoken for on the first day of our fiscal year. Cloud computing allows you to shift this ratio in a couple of ways. One, you can avoid capital expenses of equipment and infrastructure for servers and such. You only pay for what you use. Second, if you write your apps to be cloud aware (big if), you can let the clouds deal with backups, redundancy and DR. Again, this frees up CapEx and maintenance on equipment for innovation.
Cloud computing creates a new paradigm for project life cycles. Traditionally, a new project is anylized and a lot of work is done in calculating the ROI (Return on Investment) for a new project. Next, a decision is made on whether to go ahead with the project. If it gets a green light, equipment is purchased and installed. The application is then deployed and you wait to see if your ROI calculations were correct or not. With the cloud, that cycle can be radically different. If you have an idea, you can start with deploying it, evaluating it's effectiveness and then decide to grow it or kill it.
Related to this, is the idea that cloud computing allows you go from "ah ha to ka-ching" faster. The emphasis moves from the infrastucture to the developers. This only works if the apps are written with the cloud in mind. Otherwise you end up with security and reliability nightmares.
None of this is about technology, it's about business practices. That's where the paradigm shift is.
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