Situation normal, everything must change – How IT is changing with the advent of cloud computing

How IT is changing with the advent of cloud computing.

Why IT is changing

Not all IT is the same, not all IT has value as some had commoditised. This occurred through the warfare of technological advantage and copycatting.  Anything new is a chance of competitive advantage anything common is a service. Follows the same path as many other industries i.e electricity innovation -> national grid.  If this happens to IT, does it still have strategic value?  Yes as not all IT is commoditised it is always moving along the innovation -> commodity curve, when they get there the are ready to turn into a service.

How this impacts IT

  • Disruption – through the growth of the SaaS industry
  • Innovation – commoditisation actually promotes more innovation through the stability of the infrastructure i.e componentisation
  • Relationships – the differing service model *aaS changes the way an enterprise interacts with it suppliers.  More items can be outsourced, its not common to have a single supplier model.
  • No Choice – when  you view you product as an  innovation but the market views it as a commodity – the red queen hypothesis (risk of doing nothing)

Benefits and risk of the cloud

If we view it as a term to show the disruptive force in moving from and innovation to a service based world (commodity).

see many of my other posts for the benefits.  some of the main risks:

  • transitional risks
  • trusts
  • transparency
  • failed services on which you have built disappear i.e the company goes out of business or the platform fails
  • inability to switch between providers.

Managing the risks

Assuming the platform you are based on disappears.  You need to ensure your providers support the same standards ,this is not the case at this time. It is almost like the commodities (services offered) are in effect the innovation and we find ourselves basing our decisions on trust.  This  will no doubt change with time as the providers increase and the customers demand more from them in an increasing competitive market place.

Why open matters

encourages commoditisation by removing the barriers. Competitive markets depend eventually on open standards, but it is worth noting that vendors push the boundaries and extend these.

What we need

  • Ability to run the service on your own machines – build your own cloud
  • Ability to switch between own machines and a provider
  • Ability to easily switch between providers

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