Written by: Jeffrey Kaplan
Timothy Chou did a great job in his column entitled Cloud computing is not just another name for outsourcing", identifying the unique benefits that make today's cloud computing phenomenon different than yesterday's outsourcing deals. For those readers who might still be trying to grasp the significance of this new form of 'shared services', I'd like to lend my own point of view.
I refer to cloud computing as the latest method of 'out-tasking' specific aspects of your IT and/or business operations to a specialized third-party to gain greater functionality at a lower cost with far less risk. Unlike the all or nothing wholesales outsourcing deals of the past that forced organizations to relinquish control of their IT operations to a third-party, cloud computing permits you to parcel off, or out-task, particular parts of your application, infrastructure or development requirements to a service provider on a pay-as-you-go basis.
This option is timely because it permits organizations to mitigate the risks that have been associated with the outsourcing deals of the past while more quickly responding to the rapidly evolving business requirements of today. The truth is that traditional outsourcing deals have too often failed to achieve their original business objectives and either been terminated or substantially restructured according to various market research reports. Retrenching from a traditional outsourcing arrangement can be extremely disruptive and costly, resulting in lingering morale and other operational issues.
Cloud computing may have its own risks, as the recent Amazon Web Services (AWS) service disruption illustrated. But, smart CIOs and IT departments can mitigate these risks by utilizing cloud services to augment rather than entirely replace their application, infrastructure and development needs.
In fact, it is this out-tasking mentality that has led large-scale enterprises to be quicker to adopt cloud computing alternatives than small- and mid-size businesses (SMBs). The general misconception about this market is that these services were intentionally designed to cater to SMBs who couldn't afford the 'luxury' of costly enterprise applications or complex computer systems. In fact, most SMB decision-makers have been reluctant to adopt cloud computing alternatives because they are either unclear about how they operate or because they are uncomfortable depending on these 'on-demand' services for their day-to-day operations.
Large-scale enterprises are more skilled at employing specialized services, such as cloud computing solutions, to meet specific needs. This out-tasking tactic allows smart enterprise decision-makers to augment their ongoing production environment or experiment on new strategic initiatives with third-party resources.
So, increasingly seasoned CIOs are recognizing that cloud computing can be used not just to save money or handle situational computing needs, such as seasonal business cycles. They are also out-tasking various application, infrastructure and development requirements so they can gain a competitive advantage from new innovations and fewer risks.