The growth of cloud computing is imminent. Companies are recognizing the ability of cloud computing to improve the integrity of their data and the stability of their systems at a faster speed and lower cost. According to Forrester Research, among the Fortune 500 companies, about 30% of their IT applications and infrastructure is happening in cloud computing.
Five years ago there existed an overwhelming fear of moving to cloud within IT departments. It was a fear of relinquishing control of their applications and data and allowing it to be moved out of the house. As a result of this concern, many organizations resisted moving to the cloud. Today, we are witnessing a complete 180 degree shift, where companies are adopting cloud solutions at an increasing rate and trusting that their vendors are better equipped to handle their data and systems because of it.
The decision to switch to cloud becomes easier due to the strategic option to start small. In contrast to traditional application installments or on premise, companies can adopt cloud computing for only one process or many process areas and take care of all business execution needs, but maybe for just one country or region. Companies can also pursue a joint venture with one of their partners and extend their cloud offerings to that venture. Thus, cloud computing provides the privilege of implementing a variety of different strategies.
Cloud has been especially energizing for small, new start-ups that can quickly spin capabilities in response to demand. According to cloud expert Don Huesman, there is a “tighter and closer alignment with new enterprises, either wholly baked or new enterprises within existing companies looking to diversify their portfolio of capabilities and build a future while they’re still not leaving money on the table from the past.”
While companies are increasingly making the decision to adopt cloud computing, there are principal barriers that are swaying many organizations away. A major barrier stems from the fear of losing in-house control of their technology. However, at the same time, business leaders are becoming more and more aware of the advantages of cloud computing and the fast and immense value added. IT is also recognizing the opportunity provided by cloud to improve the efficiency of the business, drive productivity and be viewed as strategic and as an innovator. Those IT departments that have adopted and embraced cloud technology are able to take all of their overall IT expenditures and move much of it from maintenance to innovation and development of new capabilities for the business. This mindset of IT departments reduces the fear barrier of cloud computing.
Cloud computing is a trend that isn’t going away. As Huesman says, “It’s better for IT departments to get with the program and understand that it’s their agility that provides the value that they bring to their enterprise.”
Information is gathered from a video by Knowledge@Wharton of an interview with Erik Berggren, vice president of customer results and global research at Success Factors (an SAP company), and Don Huesman, managing director of the Innovation Group at the Wharton School of the University of Pennsylvania discussing the adoption and integration of cloud computing.