How Cloud Computing is changing the IT value chain
Monday, August 24, 2009
Tesco used to be the place where you bought your groceries, but now you can also get furniture; insurance; a credit card and a mobile phone connection. In fact, pretty much everything you need to run a home. Consumers got accustomed to this change extremely quickly and saw the benefit of buying everything in one place.
In the same way, ISPs are evolving from carriers to the people that host and deliver business applications. They are now equipped to provide the gamut of business services in the cloud, such as; Web connectivity, network infrastructure, email, archiving, document management, security, unified communications, CRM and business intelligence. In fact, pretty much everything you need to run a business.
This evolution of ISP to cloud computing provider provides CIOs with a great opportunity to tap into the strategic benefits of running IT off premise so that they can focus on business growth. Cloud computing is enabling CIOs to become strategic business advisors rather than the guy in the basement who deals with servers and cables.
Gartner analyst Daryl C Plummer has identified three trends that are shaping the relationship between end users of IT services and vendors. These trends
Standardisation and commoditisation of technologies . The rise of service oriented software architecture and virtualisation . The ubiquitous use of the Internet Now that more software, platforms and infrastructure are being accessed through cloud computing, ISPs are evolving from infrastructure providers, to effectively an outsourcing organisation. As a result, the entire value chain is being fundamentally changed and businesses are sometimes confused about whether to approach their ISP, software vendor or a reseller when sourcing new technology.
At Star we have seen a clear migration path from in-house IT to cloud based consumption. In 2000 companies bought into the cloud for basic connectivity and additional storage and back up infrastructure. In 2003, hygiene services such as anti spam and anti virus were moved out of the server room and into the cloud. Now Gartner predicts that we’ll see an enormous growth in business email sourced from the cloud, from 1 per cent in 2008 to 20 per cent by 2011. From 2010 to 2014 more companies will source all of their business applications this way.
The new CIO now spends more of his time managing supplier relationships rather than the day-to-day technology. A key relationship is with their value added reseller (VAR). This will become more important as services are consumed from the cloud because specialist resellers can provide the professional services to help customise on-demand services such as CRM, business intelligence tools and Microsoft Exchange. VARs will probably have already helped businesses to set up their VoIP and email, remote working facilities, IT security and disaster recovery services. That relationship and trust is likely to be strengthened as the value chain evolves.