3 ways cloud is reshaping business: beyond cost savings and flexibility

Cloud computing has its share of skeptics. For seasoned IT people, it's just the latest wave of hype seen since the days of client/server computing. For businesses, it means additional, perplexing challenges with security and reliability. But, ultimately, the touted advantages of cost-savings and flexibility are but a small piece of the disruptive changes cloud means for organizations.

I recently had the opportunity to join a scintillating panel at last week's CompTIA Breakaway conference, focusing on ways to cut through the fog of cloud computing, led by Bob Dirkes of TechImage.

The big question Bob put out there at the very start of the discussion was: we hear about all this business transformation that's now going to take place thanks to cloud computing. But the phrase "business transformation" gets uttered every time vendors and analysts are pushing some new paradigm, be it PCs or client/server or Web computing or whatever. Is this time any different?

My colleagues on the panel all provided great and thoughtful responses. 2112 Group's Larry Walsh pointed out that cloud is destroying far more jobs and channel relationships than it creates. He also said that the process of transformation doesn't mean it comes to some sort of conclusion at some point -- it's a process that is ongoing, and will remain so without end. FierceCIO's Caron Carlson also sees new forces shaping the IT landscape because of cloud, taking note of the rise of "rogue IT" that needs to be reckoned with. Greg Gillespie of Health Data Management pointed out that there is potential to for cloud greatly reshape healthcare delivery once regulatory hurdles are addressed.

My response to Bob's question was that cloud is transformative, but for reasons beyond efficiency and cost-savings. Yes, cloud -- as has any and all forms of automation over the years -- means replacing manual tasks with machine-driven tasks, which means fewer jobs in a particular area. And, yes, cloud is only the latest way touted by vendors to cut costs and gain efficiencies.

But the real revolution is only just begun. Here's how cloud is changing the way we do business -- something unheard of previously in the technology space:

Every company now an IT company: Cloud is blurring what was once a clear-cut distinction between the vendors who provided technology products and services, and the customers that purchased and used them. Companies that build and support their own private clouds are learning to extend these services to partners and customers. There are many cases where non-IT companies are becoming cloud providers.

“Loosely coupled corporations”: The term “loosely coupled” came into vogue with service-oriented architecture a few years ago, meaning an entity or system stands fine on its own, but can be dynamically linked to other systems to complete new processes. Cloud computing is paving the way for the loosely coupled company – which may be an entity that exists purely as an aggregation of third-party services, provided on an on-demand basis to meet customer demands. Most of these services will be passed through as cloud services, both from within the enterprise and from outside.

"Extremely lightweight businesses": Call them XLBs, or "extremely lightweight businesses." Companies built and functioning entirely within the cloud, able to take advantage of cheap, on-demand compute resources, formerly only available to large organizations with huge IT budgets. Even supercomputing power is now available on a monthly rental basis. This applies to departments of larger organizations as well -- being able to design new products, without the need for approvals from corporate finance or IT. Roadblocks to entrepreneurship an innovation are removed.

(Photo: NASA.)
(Portions cross-posted at ZDNet Service Oriented.)