Which Type of Businesses Benefit Most from Cloud Computing?

Which Type of Businesses Benefit Most from Cloud Computing?

“A rising tide lifts all boats.”

This quote, mistakenly attributed to President John F. Kennedy who used it often, is associated with the idea that improvements in the general economy will benefit all participants in that economy. Extending this to technology, it is but natural that an innovation like cloud computing will benefit businesses, all and sundry. However, even as George Orwell wrote that some animals are more equal than others, some businesses do benefit more than others from cloud computing – startups.

According to Richard Soley, CEO and chairman of the Object Management Group (OMG), believes that integration issues prevent larger enterprises from taking full advantage of the cloud whereas cash-strapped startups benefit from the access and elasticity that the technology provides. OMG is an international, open membership, not-for-profit computer industry consortium founded in 1993 and involved in setting industry standards. With lack of standards being a common complaint with cloud computing (See: Cloud Computing Standards: How Important Are They? ), OMG has a critical role to play in the industry’s future.

The issue is the legacy. And it’s not just moving your legacy applications to the cloud – it’s how to integrate what’s running on public cloud with the computing resources that are still in your own shop, either because of the legacy or the security concerns, or you just haven’t had the time to move them. So you have more connections between the cloud implementation and the in-house implementation. There are starting to be available software solutions to help with that move, but we’re not entirely there yet,

Soley said in a recent interview with Tech Target.

Here’s my take on the issue under discussion. I had already enumerated the several ways cloud computing can help businesses (See: Which Cloud Computing Quality Works for you?); however, the question of which businesses can make use of which benefits, and to what extents, have not been discussed. This article is an attempt to remedy that.

While cost savings, as projected by moving to the cloud, are definitely important for all businesses, they are more important, at least initially, to smaller cash-strapped startups than enterprise companies with positive cash flows. What is more important to the latter, in fact, is the ability to continue doing business. Now, this ability to function continuously will obviously be hampered by any transition, even if it be to better technologies like cloud computing. Moreover, since such enterprises already have considerable data on legacy systems, they need to be migrated to the cloud – a time-consuming and expensive activity. However, startups, by their very natures, do not have preexisting data to move to the cloud but can start operations on the cloud itself. In this respect, larger enterprises are like the old dogs that are loath to be taught new tricks as the English proverb goes.

Finally, the flexibility to increase or decrease scale of operations that cloud computing provides is not that big a concern for enterprises, secure as they are in long-term contracts that guarantee business. For a startup looking to grow exponentially, this is a major advantage, especially if coupled with the fact that not much capital expenditure is required. Again, for enterprises, this is important but not as important as to just continue functioning uninterrupted.

The resistance to change is the reason why large financial institutions continue to use COBOL, a 1960s technology in spite of recent improvements, instead of modern technologies like .NET and SAP that can do the same work faster. However, the cost to replace all legacy COBOL-based systems would be so great that it won’t justify the subsequent cost savings.

Taking everything into account, it is clear that startups benefit more from cloud computing than do enterprises.

By Sourya Biswas

sourya

Sourya Biswas is a former risk analyst who has worked with several financial organizations of international repute, besides being a freelance journalist with several articles published online. After 6 years of work, he has decided to pursue further studies at the University of Notre Dame, where he has completed his MBA. He holds a Bachelors in Engineering from the Indian Institute of Information Technology. He is also a member of high-IQ organizations Mensa and Triple Nine Society and has been a prolific writer to CloudTweaks over the years... http://www.cloudtweaks.com/author/sourya/

0 Responses to Which Type of Businesses Benefit Most from Cloud Computing?

  1. [...] Enteracloud, founded in 2005, declares its vision as “to provide enterprise class cloud computing and infrastructure services to small businesses.” Considering that small businesses seem to benefit more from moving to the cloud than their larger counterparts, this seems to be a viable business plan (See: Which Type of Businesses Benefit Most from Cloud Computing?). [...]

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