Cloud is a fitting term for something so shrouded in mystery and hard to grasp. Were not helped by the plethora of buzzwords that seem to accompany this concept: grid, utility, service oriented architecture (SOA), service management, software as a service (SaaS), platform as a service )PaaS), and so on.
Its easy to get lost in the wonders of the technology and the lofty promises of the new age it will usher in, but we must stay anchored: this is ultimately a matter of business, not technology. And, as such, its usefulness must be assessed in the context of the enterprise as a whole. New ways of thinking are required. Investment decisions and the measurement of success will not be about individual technologies, or projects, or even the IT department itself, because the cloud is about the whole organization.
While efficiency and cost savings are a legitimate motive for pursuing cloud computing, and will be the initial one for most companies, some see clouds as enablers of innovation and agility. If hardware and software are instantly available and always up to date, and if reliability and privacy are guaranteed, then a firm can focus all of its energy on new business models, experimenting on the fly, and learning from new approaches to finding and satisfying customers. And factoring in the computing resources needed for a new initiative will be a matter of when to push the button.
It is best to not get too wrapped up in parsing the various terms associated with the cloud. Utility computing, for example, refers to the pay-per-use or metered approach that Amazon.com uses in it's EC2 cloud offering. Electric power is often used as an analogy: you plug in your appliance and dont really care how the electricity is created or who is doing it.
Grid computing refers to the linking of thousands of computers to which pieces of a gigantic problem, often scientific in nature today, are distributed. The grid offers processing power and storage unavailable in a typical single organization.
In practice, organizations will move to the cloud incrementally, shifting portions of their computing needs to it over time. Smaller companies will see immediate payoff in moving completely over to the cloud. Larger companies must wrestle with proprietary systems that are strategically critical and extremely complex and unique business processes that have been built up over time and cant be easily handed off.
What we cannot avoid -- and it is much more difficult than buying servers and software seats -- is the changing nature of work itself. Leading companies are moving toward the convergence of their management of business and technology. This simply means that decision-makers are conversant in each and act on each to advance a corporate strategy. For them, technology is no longer a mysterious activity hidden away in a black box.
The computing tools in the cloud will be represented to the end customer virtually, in non-technical ways, so that he or she can use them without excessive specialty training. At the same time, the customer will be ever more knowledgeable about the potential of the tools and ever more adept at manipulating them.
Deciding to move to the cloud and using it wisely will require the creation of a strategic enterprise architecture (SEA). An SEA is a story of what the organization is trying to accomplish and how. It includes both the business purpose and the enabling technology, i.e., a business architecture and a technology architecture mapped to it. At the highest level the SEA is expressed in non-technical language anyone in the organization can understand. An SEA lays out all of the business processes, end to end, incorporating external partners and customers.
Most organizations have various documents describing what they do, from the thick notebooks of long-range plans gathering dust on shelves, to various mission statements. An SEA makes sense of those islands of information. It should clearly show where contradictions in purpose and redundancies in execution lie.
At its most granular level, the SEA becomes technical: it specifies the various information technologies in use. In leading organizations, these are now expressed as a service oriented architecture (SOA), i.e., software is maintained as modules that can be combined to create applications as needed; sometimes by business users. An SOA can reside within the organization or in the cloud. An SOA is not a necessity to work in the cloud, but it adds tremendous flexibility as the organization senses and responds to changes in its environment.
Other management capabilities are important, particularly organizational and change management. An SEA should indicate whether existing organizational structures are helping or hindering the overall strategy. This includes entire divisions but also working groups and reporting relationships. It should lead to questions such as: Do we have the right people in the right places? Do they have the training they need? Are their incentives encouraging them to do what we need them to do?