Sunday, June 24, 2012

Innovation: Does the Cloud Pay Off?


Innovation:  Does the Cloud Pay Off?




According to an article from Information Week the cloud may or may not pay off for all companies.  This is a question that many IT executives across the world are currently asking themselves daily.

Cloud computing is the latest IT buzz word and something that is changing the IT world.  IT execs over the last 2-3 years have spent time reducing the number of servers they have through a technology called virtualization.  Virtualization allows you to take one physical server and run multiple virtual servers on it.  Companies have been able to reduce the number of physical server s they manage by as much at a ratio of 1-to-35. (Babcock,2012). Virtualization technology has reduced energy, hardware, and datacenter costs.  With virtualization technology use at its peak we are now seeing cloud computing start to grow. Cloud Computing involves not only placing your company network into the cloud but can also involve using software applications on the web which is known as Software as a Service(SAAS).  

Cloud computing costs are something that IT Execs are having a hard time trying to figure out if these costs are less expensive.    The companies that are providing the cloud computing and SAAS infrastructures have pricing structures that make it very difficult to be able to compare to their current enterprise environment.  One challenge many organization are facing it they not able to go 100% into the cloud with their entire IT infrastructure then they still need the full IT staff so there are not able to save any money in IT labor costs.  Cloud computing prices have been dropping and I feel we are still close to a feasible price range to draw in more organizations to cloud computing.

There are several implications of cloud computing.  As more and more organizations move to cloud computing it will push the current high cost down due to the companies that offer these services are able to fully utilize its entire developed IT hardware infrastructure.  As companies migrate more of its IT infrastructure to the cloud they will eventually have a need to reduce the size of its IT staff. Cloud computing growth will also increase datacenter growth due to companies no longer managing their IT infrastructure at their offices.

I believe cloud computing for medium to large organization is still too expensive but I do see this changing in the next 2-5 years.  For small companies that have little or no IT staff, cloud computing is inexpensive but gives them all of the IT technologies that are normally only available to medium to large organizations.
Sources:
Babcock, Charles. “Does the Cloud Pay Off” Information Week. June 12,2012. Web. June 12, 2012. <http://informationweek.com/1336/cloud>

2 comments:

  1. Joel,
    I enjoyed reading this blog and article about cloud computing. I believe it is one of the many questionable new technologies that we have for consumer and commercial use. It is a new technology that comes with several risks that may outweigh the benefits to some. Those risks involve identity theft from hackers, breach into personal information, and the requirement to trust an outside company to manage your data. I do agree it is also quite expensive for companies to do the switch. For commercial use, I believe cloud computing may not be the best technology to manage data, but I do believe cloud computing is a smart idea for managing someones music and video library.

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  2. I found this article very interesting because It made me aware of new technology. I agree with Michelle's opinion about the effectiveness and risks involving any new invention. However,It can always be improved as more people finds it useful.

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