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Cloud Computing Delivers Smart Technology Solutions
Helps firms to conserve capital and to decrease their environmental footprint

Undoubtedly, cloud computing is a hot technology topic that holds benefits for businesses across a variety of industries, including manufacturing, distribution, retail and service companies. Harnessing the power of the cloud to implement cost-effective information technology (IT) solutions can provide bottom-line benefits to corporations both large and small.

Cloud computing is often touted for its simplicity at the end-user level, since corporations are removed from the foundation technology. In other words, the infrastructure is concealed from the users, who relinquish hardware and software management responsibilities to an internal or external cloud provider. [1] That said, cloud computing is virtualized, shared, scalable, Internet-based resources, such as software and information, that are supplied to users in a delivery model very similar to the one utilized by public utilities. Customers use a powerful network of pooled, on-demand computing applications that can dramatically streamline a company's efficiency. While network, security and compliance infrastructure remain on premise, all other management responsibilities for IT operations, including servers and software, email and collaboration, filing and print assets, are eliminated and allow companies to purchase only the computing resources required to build, implement and manage solutions.

A Valuable Proposition
Cloud computing offers a variety of tangible benefits for the modern company. It is important to note that it is unlikely that cloud computing will wholly replace onsite infrastructure in all cases. Instead, a hybrid model whereby companies subscribe to some cloud services and maintain other solutions in-house, depending on the need and circumstances, is a more realistic prediction. Each company should evaluate the most appropriate technology model before purchasing any cloud computing-based service to ensure that it makes good fiscal sense. While cloud computing can reduce capital expenditures, these costs shift to operating expenses and in certain situations this may not be a favorable solution.

Still, moving some technological resources to a cloud computing-based delivery model can be highly beneficial. As already noted, companies need not employ in-house IT staff to manage specific applications. Instead, these valuable internal resources can be freed or redirected to focus on other, more important, business building tasks.

In addition, when a company utilizes public cloud computing-based services, it foregoes a variety of hardware and software acquisition costs, replaces these with lower initial hardware and software acquisition costs, and replaces it with lower term expenditures up front. [2] This model allows users to acquire resources that are highly available from any location - an enormous benefit. Cloud computing gives business users a reliable, immediately accessible and scalable resource allocation tool that is available via the Internet or private network, while eliminating many of the cost management responsibilities associated with maintaining IT infrastructure. [3]

Another important benefit is the shared resource capabilities that cloud computing facilitates, which substantially lowers costs and energy use. This highly flexible model provides considerable resource scaling capabilities that support periods of high use and avoids large intervals of underused IT capacity. [4] Since resources are centralized and engineered for peak volume, by leveraging resource-sharing technology, utilization rates are highly efficient. This provides a positive environmental and bottom line impact.

Responsible and Profitable
As an example, IBM has emerged as a thought leader in the field of cloud computing with its Smarter Planet initiatives. One of the core premises of the Smarter Planet cloud strategy is to conserve energy, consolidate resources and make information secure and highly available. This assertion demands that business users think smarter about accessing, processing and storing data. [5]

Bolstering this perspective and evidenced in the high degree of media attention that "green" topics receive, greening operations has emerged as a critical element to distinguish a business from the competition. Still, industry veterans understand that even while corporate actions taken to mitigate environmental impacts are necessary, they must be approached with an eye toward the bottom line. [6]

We've seen here that cloud computing optimizes IT resources, and this provides a dual benefit that can minimize a company's environmental impact by reducing energy consumption, while saving money in energy costs. In addition, the cloud model affords an ecological effect by decreasing the need for organizations to expand the real estate footprint often required to build in-house data centers. This considerable bottom line benefit yields substantial energy savings as well, since companies are relieved of the need to cool and power large data centers. [7]

Another major cost impact is in the streamlined management of IT resources. Since cloud computing is highly automated, it "eliminates much of the time traditionally required to requisition and provision IT resources." [8]

Conclusion
Firms must utilize every tool at their disposal to compete successfully. Cloud computing technology, when utilized in a thoughtful, measured way, can help firms increase flexibility and maximize resource allocation. Whether a data storage solution, an analytics tool, a desktop management solution, or an ERP solution - the cloud can provide the low-cost, low-maintenance infrastructure to manage a myriad of IT resources.

The demand for cloud computing resources is predicted to grow. According to a Gartner study, by 2011, 40 percent of early technology adopters will purchase IT infrastructure as a service. [9] By harnessing the power of the Internet to amplify computing power, save infrastructure costs, and reduce environmental impacts, many companies are taking the plunge and discovering new abilities to respond to customer demand quickly and efficiently. Moreover, as public pressure continues to grow, demanding that companies become better ecological custodians, this technology provides a dual solution that helps firms to conserve capital and to decrease their environmental footprint.

References

  1. IBM, "The Benefits of Cloud Computing: A new era of responsiveness, effectiveness and efficiency in IT service delivery," July 2009.
  2. Baseline, "Cloud Computing: Clearing Away Infrastructure Muck," October 28, 2009.
  3. Ibid.
  4. IBM, "The Benefits of Cloud Computing: A new era of responsiveness, effectiveness and efficiency in IT service delivery," July 2009.
  5. IBM, http://www.ibm.com/smarterplanet/us/en/cloud_computing/ideas/index.html?re=spf.
  6. Managing Automation, "The Business of Going Green."
  7. IBM, "The Benefits of Cloud Computing: A new era of responsiveness, effectiveness and efficiency in IT service delivery," July 2009.
  8. Ibid.
  9. Arizona State University, W.P. Carey School of Business, "Cloud Computing: The Evolution of Software-as-a-Service," June 4, 2008
About Kevin Beasley
Kevin Beasley is CIO at VAI. As Chief Information Officer, he provides vision and leadership in technology planning for VAI. With an in-depth working knowledge of enterprise resource planning software development, Beasley oversees both the corporation’s technology strategy in conjunction with product development and the internal information technology initiatives that support the goals of VAI.

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