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Could Computing: Where is the rain?

Kishore S. S. Swaminathan | Nov. 11, 2010
Cloud computing makes traditional IT better, faster and cheaper and it has the potential to change both the business and IT landscapes in fundamental ways.

Whats not to like about cloud computing? After all, among other things, it promises on-demand pricing, less IT overhead, lower cost and the ability to scale IT up and down quickly.

To be sure, all these are definitely nice-to-haves. But in fairness, they dont quite seem to add up to a proverbial paradigm shift. So is this just a passing cloud with no rain?

In fact, I think that anyone in the C-suite (not just CIOs) should pay close attention to cloud computingnot because it makes traditional IT faster, better and cheaper but rather it has the potential to change both the business and IT landscapes in some fundamental ways.

Three predictions

On a purely technical level, cloud computing blurs the line that separates the IT thats inside an organization from the IT thats outside an organization. I predict that this is likely to lead to three distinct classes of business and wealth-creation opportunities.

I think these impending developments are significant because the traditional data and process isolation between and among companies is about to break down, and in its wake, new business ecologies and value networks are about to emerge. Herein may lie the proverbial paradigm shift inherent in cloud computing.

Prediction 1: During the next five years, we are likely to see a dramatic increase in intercompany business processes that, in turn, will lead to the emergence of business ecosystemsthat is, groups of companies with complementary strengths that work seamlessly with one another through intertwined business processes.

The moment a companys IT systems migrate outside the firewall, they can much more easily communicate and exchange information with other IT systems from other companies to execute business processes that cross company boundaries.

Intercompany processes are not new. In the 1980s, Electronic Data Interchange was aimed at communication between companies looking to exchange information across a supply chain (most notably, within the automobile industry). The travel industry has integrated processes among airlines, car rental companies and hotels to create business ecosystems (the oneworld alliance, the Star Alliance, etc.) that offer passengers a single travel experience across multiple airlines, rental car companies and hotels.

Today, however, such processes are handcrafted and hardwired among systems involving a small number of business partners or managed by third-party clearinghouses.

Cloud computing in combination with integration standards like web services and service-oriented architecture has the potential to enable inter-enterprise processes at an industrial scale: complex business processes that snake through multiple companies and their IT systems and that can be configured and reconfigured on the fly.

But you may very well ask: Even if this is technologically possible, what is the business driver for it?

 

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