Sidebar to “Using Analytics and Creating Intelligence in ‘The Cloud’”
by Mark P. Dangelo
www.Innovative-Relevance.com
As we approach 2010, it appears that the convergence of virtually delivered technology, changing business processes and models, and the expanding feature rich Internet applications have evolved into new a new paradigm – “The Cloud” or more commonly called, cloud computing.
It seems every few years there is a new idea or acronym that dominates discussions in business. Will “The Cloud” live up to the building promises? Will it be a hollow or catch-all term that fails to meet expectations?
Cloud computing, in all its various forms, has the potential to completely change the fixed costs of each and every IT operation into non-CAPEX, variable costs, regardless of functional requirements and challenges – origination, servicing, and securitization.
Cloud computing represents the current apex of process and technological innovation – at least from our current capabilities. The deployment of cloud solutions has captured not only the imagination of entrepreneurs, but also witnessed multi-billion dollar investments by some of the world’s largest vendors and service providers. Doubts? Just do a search on “cloud computing” in any financial publication.
From the business and IT business models, clouds are driven by the need for rapid profit contributions, and are not limited to, traditional discussions of who controls the people, processes, hardware, software, or needed improvement services. Integrated within this virtual and secured world are robust regulatory compliance functions, vast data repositories, and stringent privacy conformance — either as a virtual cloud or as a series of layered cloud offerings. Yes, there will be more than one cloud available.
For bankers, it may be easier to think of these clouds using a traditional axiom — “anywhere, anytime, anyplace, any offering” – without the legacy challenges that hinder growth and negatively impact margins.
From the innovators perspective of cloud solutions, these offerings are beyond Software as a Service (SaaS). These solutions exceed Infrastructure as a Service (IaaS) competencies. In fact, current and future cloud ideals and capabilities are well beyond BPO (business process outsourcing) touted by some as the “real” variable cost solution. Comprehensively, cloud solutions are beyond of the current, point driven models from Google, eBay, Amazon, IBM, Oracle, Microsoft, SalesForce, and others.
Reality? Well, those are the end goals that many vendors, providers, and even outsourcers will be striving to deliver this next decade. In the end, their marketing campaigns will reflect the changing conditions and the realities achieved. The hype is growing for “The Cloud,” and the good news is that the early iterative steps already taken show superior potential.
On the other hand, while the potential of cloud computing holds great promise, there are still mission-critical challenges that must be addressed and overcome. Issues of data integration, information privacy, data integrity, security, skill sets, on-going enterprise operational management, and many of the traditional IT challenges covered by in-house staffs are still being dealt with to the satisfaction of management teams, risk officers, and even regulators.
The bottom line is that cloud computing does indeed hold great benefits – both short and long-term, strategically and operationally. However, not all applications are ready for their migration (including some mission critical legacy ones) to a variable cost, virtual world. Suffice it to say, three years from now we will be having a much different discussion.
Cloud computing is definitely important for any business currently defining or rethinking their 2010-2012 IT budgets. Nevertheless, with any iterative and evolutionary solution set, it is wise to “think big, but start small.”