To define the business value of cloud computing is a challenge. Everybody knows it is the hottest thing, drives big numbers with market size of USD 371.4 billion1 and still, even cloud enthusiasts fail to clearly express its business value and precise cloud business benefits. This is no surprise, as cloud computing only is a headline, and the values under it are spread over a vast range of technologies and use cases. It also has to do with the perception of the content of cloud computing. Many people only associate IaaS, compute, and storage services, with cloud computing. However, that is only one side of the multi-faceted cloud computing story.
I remember, back in the day, when I started to talk on the stage about cloud computing (This is my 13th year in the cloud business, full time) I would ask audiences a few simple questions to raise cloud awareness.
- “Who in the audience is using cloud computing” — Usually no one would raise their hand
- “Who in the audience uses a web mailer for private mail?” — A lot of hands went up
- “Who in the audience uses an iPhone?” — It was new so not all hands went up but still quite a significant number
And then I told the audience, whoever had their hands up in the air, that they should have raised their hands to the first question as well. They were not aware of the cloud is more than just a trendy technology term. They literally put themselves in a box.
What is cloud computing then?
The easiest definition is “the provision of IT services and capabilities over the internet”. The keywords here are services and capabilities as opposed to technologies that are being used for on-premises delivery. The technology is in control of the provider as is the product management and development of the services and capabilities on offer. Without going into detail, cloud computing strategy usually is determined by IaaS, PaaS, and SaaS which describe the accountability level of the provider vs. the customer. Typical capabilities are computed, storage, and databases and these are also what most people have in mind when it comes to cloud computing. When it comes to the business value, we will need to look at a much broader spectrum of cloud computing and capabilities enabled by cloud computing. Examples would be data analytics, machine learning, IoT, and many more.
Cost is the main driver of cloud computing, right? Have you or your company moved to the cloud to save money only to be surprised by the escalating costs of storage and transport? The cost-benefit increases once you move higher in the cloud computing stack towards value platforms delivered in a cloud fashion. In addition, the shift from the migration of application A from infrastructure one to two towards replacing of components with cloud-based offerings can drive the cost of licensing down. Imagine you replace your costly and not cloud-friendly red database with an open-source cloud database.
So far, you might have argued that business value has only been created in a metonymic kind. The other categories free up resources and focus on the top priority, driving business value through core business products. Whether you are offering services or developing physical or virtual products, this is where you create value.
Cloud is the foundation to create many new ways either through innovation or by combining existing building blocks in a new way to realize cloud business benefits.
The vast possibility to use things like IoT, AI and ML, analytics, and many more are created by the cloud. Take High-Performance Computing (HPC) as an example. HPC existed prior to the cloud. The issue was just the availability of capacities, the cost to create more capacity, and the risk that your investment is outdated in no time. With cloud-based HPC offerings, there are so many more projects now that can use HPC effectively. This is what drives the business value of cloud computing and in the case of HPC, even value to humanity if you think of advancements like sped up cancer research.