There's No Magic In Cloud Computing

So many businesses fear change… and if they don’t embrace it responsibly… they’ll be doomed…

In fact, only 60% of companies atop the Fortune 500 in 2000 remained there in 2010. By contrast, the 1960s saw fewer than 10 new businesses move from the top spots each year. A rough measure for sure, but it illuminates the current pace of change; and with only 7% of Gen Y’ers working for Fortune 500 companies, we can expect this trend to intensify over time.

What Does Fortune 500 Turnover Mean? – A study conducted in June of 2012 concludes that scale (more than size, changing antitrust policies, IPOs, etc.) is a major factor in turnover. Big isn’t necessarily bad, small isn’t always good, yet scale is an undeniable advantage toward innovation and a key to success.

Cloud computing is far more than just innovative technology. It’s an economic shift in how we consume IT resources. Specifically, it’s a scalable way to improve accessibility by delivering those resources through the Internet instead of hosting them locally. If implemented correctly, cloud computing can improve flexibility, reduce learning curves, and recover from disaster… faster. The cloud is also environmentally friendly, allowing businesses to limit server space as needed – an average 30% reduction in energy consumption when compared to on-site servers.

But it’s not magic. A recent Symantec survey of 5,300 companies states that we’ve crossed over the peak of inflated expectations and are heading down into the trough of disillusion. One explanation is based on a general lack of IT readiness. About half of the organizations surveyed stated that the IT staff was not ready to enter the cloud. Corporations can’t simply sprinkle fairy dust over the team and expect them to magically change how they manage resources. I’ve read horror stories about companies adopting IaaS to give developers flexibility to buy instances as needed. Needless to say, the developers acted like kids in a candy store and bought way more than predicted, resulting in bills up to seven times higher than expected. Without proper restraints, this is a recipe for disaster.

Win, Lose, or Draw. There’s no doubt, the cloud provides a game changing opportunity. The children of today and workers of tomorrow can’t imagine living without it. But investing requires due diligence, to determine all options and how each will impact your business. Do nothing and you’re in the same place you were yesterday while the competition is one step closer. Invest irresponsibly and business will be trending toward the wrong side of black. But, after careful evaluation, transforming your business to the cloud will give you the ability to do more with less. It can be the means to the end you’re striving toward. And to get you there, here are a few areas to consider when comparing cloud providers:

• Flexibility of service
• Security, risk, and privacy
• Data center locations
• Migration
• Big Data
• The role of IT

Zeroing in on the role of IT is significant because it’s reliant on trust and the human element, whereas the others are more or less technology dependent. Gaining trust and expert guidance for each phase of cloud computing will undoubtedly unleash the power of your people… allowing the technology to handle the rest.

Are you ready to invest in change?

Connect with me @airsomers and on LinkedIn.

This blog originally appeared on SAP Business Trends.