1. Real figures for ROI for the cloud?
Historically speaking, cloud computing is the 3rd generation in computing technology (mainframes and mini computers being the 1st and Client-Server being the 2nd), and is another inflection point in how computing is purchased and used. ROI for any kind of investment in cloud cannot be generalized. It depends on the project and the applications. One can apply custom calculation for each project and include factors like opportunity cost while calculating. Cloud offers more agility and speed to use. The classic rule of thumb that most CTO’s follow while allocating budgets is invest 70-80% on annual sustenance and only 20-30% on new services. Adopting cloud services enables them to shift the paradigm to 50-50 or better. SaaS and public cloud options changes the need for heavy, upfront capex investments or the need to develop internal competencies. Subscribing to cloud services makes it possible to out-task standard capabilities and focus on value add. Depending on the project, the option of buying equipment for a private cloud versus renting services via the public cloud is also available.
2. How will cloud computing fuel entrepreneurship?
Cloud computing essentially lowers the entry barrier for start-ups. The investment is relatively low because of its inherent ‘scalability’ characteristic. It lets you get started and lets you grow. Amazon and Facebook and salesforce.com ecosystems are already spurring a new generation of entrepreneurs, with Zynga and others on Facebook, hosts of players on Force.com, and uncountable entrepreneurs on Amazon EC2. A whole new generation is being built on the agility and elasticity that cloud computing affords. There are many documented cases to fortify that story.
3. Which industries will go mainstream with the cloud in 2012?
To be specific, industries don’t go mainstream; applications do. But having said that, it is region specific. Some industries are early adopters by virtue of having a lot of web facing apps that are more likely to move to the cloud. In all probability it is highly unlikely that they would put everything in the cloud. Some apps like CRM (SalesForce.com), Collaborations (Microsoft 365/ Google Apps) are already mainstream SaaS apps. Start-ups may prefer cloud generation IT with cloud as their first preference. It’s not industries oriented. It’s more generational. Then again, you will see different consumers for different dimensions of Cloud computing. Large companies would tend to move towards Single tenant/Private Cloud but burst into the public cloud for extra capacity, local data, and other needs.
4. Tips on cloud computing best practices
Learn about it and develop competencies to take advantage of the new computing paradigm. Select the apps that give you the best returns, implemented as SaaS, IaaS, or PaaS. Pay attention to differences based on being in the cloud. Data compliance issues, security Regulations, Different points of weaknesses, How to run Security in the cloud because traditional measures might not work. Consider your IT architecture to maintain tight interlocks and solid processes to close the loop. Be aware of lock-ins and avoid and minimize its impact.
5. Whether cloud adopters should worry about data privacy
Cloud in many ways is more secure than traditional computing. There is much more emphasis on security than there is in many medium and large organizations. If it’s SaaS: then you need to understand your provider’s security levels and policies. If it’s IaaS: then the platform provides only infra security – application layer security belongs to the cloud consumer. IaaS or PaaS gives you a substrate of security. It’s a very good foundation. But you need to still own the applications. The other aspect of privacy is data sovereignty. Various regions and countries have their own data privacy regulations. For example, where the info is being stored. Certain types of information need to stay in the countries and this is also a sovereignty/privacy issues. The cloud consumer has to work around these regulations.
John Landau is senior VP of global managed services at Tata Communications
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