Within the current Cloud Business Model we would find 1) hosted applications to which we outsource data (salesforce.com is one example), 2) the external cloud (servers provided by a cloud provider outside the firewall) and 3) the internal cloud (servers provided inside the firewall).

We have over the last 12 months seen 2 trends for cloud deployment 1) cost (optimisation) confirmed with Total Cost of Ownership (TCO), 2) demand (to deliver to new business needs to which we are not able to cater within the existing perimeter).

To meet the emerging business needs, we can identify a hosted application provider to cater to the identified demand where salesforce.com, box.net among others would be examples that could rapidly enhance the IT Value Proposition or the creation of an external cloud (applications bundled in to services with an underlying architecture) where the needs of the client can be modelled and stabilised rapidly to meet “go to market” constraints. These can then be brought to an internal cloud if desired (NASA first started to use the external cloud to model emerging demand, that was later brought on to an internal cloud).

In “The cost of innovation and outsourcing” (http://www.enterprisecioforum.com/en/blogs/goddardd/cost-innovation-and-outsourcing) Doug Goddard points out the lack of innovation within the outsourcing sector.  The reason from my point of view is the lack of incentive as none of the outsourcer that I have talked to are able to brake down their cost model TCO (total cost of ownership), and even if they could clients are not prepared to pay for improvement. With an external cloud business model, innovation* as new service models that would reply to emerging business needs can be tested and validated / discarded with a minimum amount of investment.

Innovation can be disruptive (significant) or continuous. My research show that innovative business models demonstrate continuous innovation on a constant basis. Most innovation that is seen as “disruptive” is in fact a significant impact on a business model that is generated by the sum of a number of continuous improvements.