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Cloud Computing: Dimly Understood, But Here to Stay

8 Oct 2014

As scientist Neils Bohr famously said, “Prediction is very difficult…especially if it’s about the future.”

But when it comes to today’s hot topic of cloud computing, even with all the misconceptions and wrong definitions surrounding the term, you can say a few things with certainty, Insight president and CEO Ken Lamneck told the audience at the company’s CloudCast 2014 conference.

First of all, it’s not going away. That’s because there are two fundamental factors driving the business move to the cloud: economics, and capabilities unique to the off-site medium, Lamneck said. [2:48] The primary goal for any business is consistent profitable growth. [3:42] Closely behind that today is a quest for greater agility.

“The world is changing so quickly that you’ve got to position yourself to be as agile as possible to take advantage of it,” Lamneck said. [4:04]

The cloud can speed enterprises toward both these major goals. But understanding how it works requires a mental shift. For example, until very recently, executives would never think to include enterprise resource planning (ERP) in a conversation about agility. “It doesn’t have an agile feel,” Lamneck said. As the cloud evolves and using it becomes more commonplace, the conversation will begin to change. Perhaps in a few years executives won’t be able to talk about any business function without mentioning the cloud.

We’re not there yet. Today, the cloud is big for infrastructure-as-a-service (IAAS) uses such as computing and storage. But software-as-a-service (SAAS) applications are gaining ground quickly.

Currently, five workloads make up about 70% of corporate cloud SAAS spending. [5:00] But analysts are predicting high growth rates through 2017. Email service through the cloud is expected to grow 34%; supply chain management, 22%; customer relations management (CRM), 17%; human resource functions, 17%; project and portfolio management (PPM), 23%, and ERP, 17%.

It won’t happen all at once.

“All workloads are not created equal,” Lamneck cautioned.

Among those easier to upload to the cloud are team collaboration and telephony, email, office suites, storage and database applications, app development, and consumer web applications. On the opposite side of the spectrum is ERP. In between are functions like CRM, PPM, business intelligence, and human resources. Businesses should dip their toe into the cloud with some of the easier-to-implement functions like computation, storage, and email before wading into the complexities of ERP, Lamneck said.

Though it seems counterintuitive, technology may be the easiest piece of the cloud puzzle to put in place, Lamneck said. Companies have already spent years outsourcing, which will ease the transition.

In a recent survey, executives said their biggest challenges in moving to the cloud involve not technology, but changing their management and operations processes [9:03] (80% felt this was the top challenge), modifying their funding and chargeback systems (62%), and changing their corporate culture (56%).

Moving to the cloud won’t solve all of a company’s business problems, Lamneck said. But not making the move will create more of them, especially in a fast-pace world where those who get left behind may not have another chance to recover.