Technology, IT Infrastructure

Cloud sourcing: just like sugar, rubber and steel

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The hype, enthusiasm and fright surrounding cloud computing runs like a swollen river in the spring.

Remember, FUD - fear, uncertainy and doubt? Well, FUD has turned to HEF (hype, enthusiasm and fright) when it comes to the cloud.

But, there's a way to simplify and position the cloud. Call it "strategic sourcing" as HP blogger Paul Muller suggests in a thoughtful post "When Compliance and Cloud Computing Collide. That will help convert the gatekeepers and technology-skpetical execs who, nonetheless, must still be convinced.   

Is sourcing cloud computing any different Hershey's sourcing sugar, Goodyear sourcing rubber or Ford sourcing steel? Is cloud computing any more unique than the differences between sugar, rubber and steel? While you don't buy cloud computing by the ton, the answer is "not really."

As Paul points out, high-regulated industries break out in sweat about the cloud. Its cost and efficiency advantages may be compelling, but what about risk, compliance violations and reliability.Good questions, all.

The cloud relinquishes the on-premises control that minimizes those risks --  and averts nightmare `bet-the-business' scenarios.

But think about it: the most regulated enterprises -- healthcare providers and payers, banks and trading firms, government agencies come right to mind -- that figure out how to safely and reliability use the cloud will have an enormous competitive advantage. Ask yourself: do you want to lead or follow? That's the choice and that some enterprises would instantly respond "follow" is not always a bad thing. 

But consider the trend. As Paul points out, the cloud is ideal "lower value" apps which require little more than registration or in some cases a credit card. But the free cloud apps offered today by Google, for instance, are edging up into real meat and potatoes apps that make enterprises run. In some instances like CRM and accounting, the cloud arrived years ago (thank you,, which now claims 92.300 companies as customers).

Of course, the cloud is different than rubber, steel and sugar. There's immense due diligence to undertake and contracts to hammered out.

But for all the HEF,  the cloud is do-able.

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Paul Calento 255 Points | Wed, 04/27/2011 - 14:33

If cloudsourcing were put into practice could some of the organizations impacted by the recent AWS outage have avoided their systems from completely going down? Or is the AWS outage an example of when cloudsourcing goes awry?

Key questions: Is cloudsourcing dependent on a platform or are there flexible alternatives where a variety of options are used as needed? Or is cloudsouring merely an ideal?

--Paul Calento

(note: I work on projects sponsored by and HP)

John Dodge 1535 Points | Wed, 04/27/2011 - 20:17

One view on the AWS outage is that many of the impacted clients bought the cheaper service with little or no backup or failover provisions. It's like I just ditched GoDaddy's $4-$5 a month hosting because it was not just slow: it didn't work. I upgraded to Rochen Host for $8.95 a month and great performance: this is micro lesson in the same point.

(the facelift will happen in the next week or two)



Jeff Bartman 5 Points | Mon, 03/28/2011 - 20:46

So a large bank asks its law firm to assess the impact of Dodd-Frank.  After all, they know the law, right?  The bank needs to know what's changed and how much risk there is that they'll run afoal of regulators, be staggered by a large fine, called before Congress or spotlighted on the news with an exec or two doing the perp walk - innocent as they may be...  D-F compliance means a changes in IT.  IGS, Accenture, KPMG know the bank's systems, know software and can plug wires into The Cloud like demons.  But Legal Risk?  Civil Procedure?  Tax Law?  Reputational Risk?  (See pre-IPO  So the law firm thinks, "We'll become an integrator!"  TRENDWATCH:  Law firms start integration practices and prime Risk & Compliance IT engagements handling process redesign, software development & implimentation and SI.  They up their retainer and of course use value pricing & vertical integration - pay us only if you don't miff your regulator.  Oh, and pay us to defend you if you do!  TRENDWATCH: Law firms compete with tech integrators.  Luv it.