Cloud computing’s competitive advantage

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Technology research firm Gartner predicts that global public cloud computing market will grow 18.5 percent in 2013 to USD 131 billion, up from USD 111 billion last year.

And, according to Forrester research, the business cloud computing market is expected to grow from USD 40.7 billion to USD 241 billion by 2020.

What is Cloud computing?

There is still confusion on what exactly is cloud computing. FastCompany has created a short video explaining, its benefits and how enterprises can take advantage of it.

[tubepress video=”5sMUBxrPlzM” theme=”youtube” embeddedHeight=”400″ embeddedWidth=”640″]

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The latest edition of CFO Insights published by Deloitte seeks to address the pros of cons of adopting the updated version of utility computing: cloud computing.

Deloitte’s report specifically caters to the concerns of CFOs and CIOs, who as technology decision makers might be interested in transitioning to the form of technology. It presents recommendations on how to carefully decide what to move to the cloud, when to move it, and how to transition from an on-premises computing technology environment to a cloud computing technology environment. It further examines how to test out cloud computing in an organization and assesses its ‘cloud comfort level’.

Adding further, the report stresses the importance of a cordial working relationship between the CFO and CIO of any organization, who jointly can contribute to the successful implementation of cloud computing. The CFO’s role in the transition is to embrace the cloud, to catalyze behaviors across the organization and to execute strategic and financial objectives, while creating a risk intelligent culture. In his turn, the CIO, with the backing of the technology department, can increase their visibility as valued service providers to the broader organization.

Commenting on the significance of this requisite, James Babb, Partner, CFO Programme Leader, Deloitte Middle East:

“Aligning the various stakeholders is an important task for the CFO in partnering with the CIO to adopt a cloud computing environment in an organization. In addition, a cloud computing environment will often allow a CFO to know better the true cost of the IT function where the running costs of applications are often hard to determine with precision.”

Elaborating upon its implementation, the report noted that organizations tend to adopt cloud computing for low-risk projects owing to the uncertainty that is associated with any new project. It is also employed for projects in which the on-premises computing resources would not normally be available.

The Deloitte report cites benefits of cloud computing that appear most often in interviews with CIOs and CFOs to include:

  • Agility that the cloud provides, whereby businesses are not burdened with technology infrastructure and can react more quickly to change technology;
  • Cost savings in that cloud computing is considered an operating expense, paid for as it is consumed, and as such, does not require a significant capital investment in computing resources;
  • Potential for the reduction in IT support staff needed as the vendors of the cloud maintain the hardware and software environments;
  • Ability to quickly respond to opportunities or competitive threats through the use of cloud computing.

“Cloud computing has real benefits to the finance function in particular where efficiency and productivity gains are available.” — James Babb

Potential concerns as noted by CFOs and CIOs were quoted by the report as listed below:

  • Concerns related to vendor dependency and potential ‘end game’ scenarios
  • The issue of how easy it would be to move from one cloud technology provider to another
  • Concerns related to how cloud computing would fit into the entire computing portfolio of the organization
  • Interviewed CFOs and CIOs raise numerous security concerns including whether data will be safe, and whether the data will be audited and backed up

Recommending the manner of implementing cloud computing across one’s organization, the report proposes that CIOs and CFOs alignment through the cloud decision can help them decide where cloud is appropriate for their organization. This will involve assessing technology in the context of business purpose and risks. One recommendation the report offers is to start small and sample technologies with less risk and related influences on the business.

After obtaining greater comfort in the cloud, the Deloitte report recommends to continue to shift the computing environment to cloud by using an appropriate assessment-based road map. With CFOs and CIOs evaluation of governance and how the availability of cloud technology can impact their organization, they can help ensure a smooth transition to cloud computing.

Infographic: Is Your Organization Ready to Move to the Cloud?

The future of computing is in the cloud. AppNeta has created a nice Infographic to help you transition to the cloud.

Transitioning to the cloud - Infographic
Transitioning to the cloud – Infographic
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