The following news article – reported on the BBC but repeated elsewhere – is perhaps the most important issue for cloud computing today (particularly in the consumer space). Our post-Snowden world is being shaped by legal arguments in the USA which have profound implications for the use of global cloud services. If Microsoft is forced to hand over data from its Dublin data-centers then companies concerned about the US gaining access to their data will have to avoid US companies entirely. Watch this space!
Purpose – Although cloud computing has been heralded as driving the innovation agenda, there is growing evidence that cloud is actually a “slow train coming”. The purpose of this paper is to seek to understand the factors that drive and inhibit the adoption of cloud particularly in relation to its use for innovative practices.
Design/methodology/approach – The paper draws on a composite research base including two detailed surveys and interviews with 56 participants in the cloud supply chain undertaken between 2010 and 2013. The insights from this data are presented in relation to set of antecedents to innovation and a cloud sourcing model of collaborative innovation.
Findings – The paper finds that while some features of cloud computing will hasten the adoption of cloud and its use for innovative purposes by the enterprise, there are also clear challenges that need to be addressed before cloud can be successfully adopted. Interestingly, our analysis highlights that many of these challenges arise from the technological nature of cloud computing itself.
Research limitations/implications – The research highlights a series of factors that need to be better understood for the maximum benefit from cloud computing to be achieved. Further research is needed to assess the best responses to these challenges.
Practical implications – The research suggests that enterprises need to undertake a number of steps for the full benefits of cloud computing to be achieved. It suggests that collaborative innovation is not necessarily an immediate consequence of adopting cloud computing.
Originality/value – The paper draws on an extensive research base to provide empirically informed analysis of the complexities of adopting cloud computing for innovation.
Our fourth report on Cloud Computing is now available… This report looks at the future of business, mapping out the concept of the Cloud Corporation, and discusses the fragmentation and redevelopment of the technology supply industry. In particular we discuss how the industry may become layered and increasingly specialised – with organisations benefiting from the business agility and better alignment offered this will create.
For those desperate to understand the market size of Cloud, two articles in the recent news provide interesting insight. The first, from the Economist, demonstrates ClockKick’s attempts to estimate Amazon’s virtual computer provision, and estimates 90000 servers for Amazon – in the USA East-Coast only!
Quote: “Randy Bias, the boss of Cloudscaling, a IT-engineering firm, did not use these results when he put Amazon’s annual cloud-computing revenues at between $500m and $700m in 2010. And in August UBS, an investment bank, predicted that they will total $500m in 2010 and $750m in 2011.” (Economist 29th December 2010).
Another interesting thing to watch is Intel’s profits which have risen “thanks to server sales”. Making profits of $3.4bn in current economic times is tough – as the flat sales of PCs is testament. It is in the sales of servers that this profit has been made. A large proportion of these servers must be going into cloud, either to replace ageing (and power-hungry expensive data-centers) with virtualised servers (as private clouds in some form) or to provide public cloud offering (and SaaS services such as FaceBook and Google) within newly developed data centers.
The article discusses various trends in outsourcing which will impact upon Cloud (and vice versa).
Cloud computing remains focused on cost cutting achieved through new technology, however lessons from the past suggest that this is only a minor part of the disruptive innovation which Cloud may offer. In particular we should not ask “what is cloud computing?” but rather “why is cloud computing?” – in essence exploring the pressures on innovation today which resonate with the idea of utility computing.
While the cost saving is an important incremental innovation on existing practices, it is cloud’s potential to allow new forms of organisational collaboration which offer the potential of radical innovation. Moving the data-centre outside the organisation asks us to evaluate the relationship between the data-centre and the organisation. Is it “ours” to horde and control, or are parts of it able to be shared, opened, exploited by others (partners, customers, suppliers etc)? In turn does this opening of the relationship between the organisation and its information recast the organisation itself?