Cloud Computing: A New Way of Controlling Costs?

Some business leaders think cloud computing is the next big disruptive technology. Others argue it is simply a natural evolution of distributed computing virtualization and automation, but with the potential to enable fundamental new ways of doing business and fundamentally new businesses. So, which is it: technology evolution or business revolution?


“The real revolution is happening on the business side of the house, where expectations for agility and flexibility in business operations are in demand in response to the downturn, and in preparation for what comes next,” says Mark White, principal, Deloitte Consulting LLP. “Cloud services create the possibility of rapid business model innovation, improved service levels and new ways of controlling costs.”


White notes there is more at stake than being able to do things faster, better and cheaper. He adds that cloud services can also enable organisations to do entirely new things, such as orchestrating small companies into powerful federations that can compete on a global scale, enabling supplier and customer networks with unprecedented knowledge sharing and turning traditional models of transaction processing into value-added services.


Together with White, Tomi Miller, principal, Deloitte Consulting LLP and Skip Bailey, director, Deloitte Consulting LLP recently fuelled the cloud computing debate with insights from the public, technology and law enforcement sectors.


According to the Deloitte consultants, many see cloud computing as another way for government agencies to take advantage of the convergence of government business functions and the advent of the shared services center. This was underscored recently in remarks from the White House regarding computing to reduce both costs and energy consumption and the intent of companies to have a Federal Information Security Management Act-compliant cloud offering by 2010.


In the technology sector, some tech companies will be shapers of next-generation digital ecosystems, while others will be followers. In either case, there will be great pressure for companies to reinvent themselves in light of cloud disruptions to current business models. The adoption and change in business models will need to be sensitive to emergence of standards and the potential commoditization effect for certain types of cloud service providers.


Meanwhile, on law enforcement, safety and security are paramount and there is reluctance to allow law enforcement data out of government-owned and controlled data centers. However, the business side of law enforcement is beginning to demand the agility that cloud computing may promise. Law enforcement fusion centres are one example where could be great benefits from a “community cloud.”

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