Google is building a cloud-based empire for enterprise IT. Chrome OS is its latest effort to launch into the cloud and offer a viable alternative to Microsoft's dominance down on the desktop. Adrian Joseph, the new managing director for Google Enterprise EMEA, explains the company's rationale.
Coming into the role of managing director for Google Enterprise EMEA during a particularly bumpy time for the economy, I find myself having some very interesting conversations with CIOs. For instance, the CIO of a large automotive manufacturer recently told me that their IT department needed to reduce its expenditure by 30%. These discussions centre around Google's cloud based offering Google Apps, a suite of online tools designed to help improve collaboration and communication.
With the recession and budget constraints at front of mind for many, the promise of a dramatically reduced total cost of ownership is a strong draw for businesses considering cloud computing. The official findings hammer this point home: Gartner is predicting 2009 sales of cloud-based software to grow 22% to a record $8 billion. So how does the cost analysis bear out and is it a strong enough incentive to persuade businesses to move to the cloud?
According to Gartner, a typical IT department spends 80% of its budget keeping the lights on, managing, patching, cooling and otherwise caring for servers and applications in their own data centres. Moving some of this burden to the cloud can therefore bring big savings.
It's not just the initial savings on the licences and hardware that can help businesses manage their spending in the downturn - running services remotely frees up time and energy for CIOs to improve different areas of the business.
The nature of web-based services can help a company make money, as well as save it, by improving the productivity of its staff. For instance, employees can work in the same documents at the same time, commenting on one another's input and sharing and communicating new ideas.
Mobile workers can view and edit documents from any location. The Guardian saw this pay out when it sent a number of journalists to the Beijing Olympics who were able to provide coordinate their movements and coverage collaboratively online; in many cases like this businesses are seeing their interactions with the technology develop in a way they did not anticipate.
One question that often crops up when I'm speaking to CIOs is whether a move to the cloud means compromising on security. While it can be hard for companies to deal with the fact that the storage of their information is outsourced, I believe that cloud computing can be more secure than hosting data yourself.
Of course, there can't be a trade off between cost savings and reliability. It's true, there have been some high profile outages for many cloud services, including our own. However, it's important to put these into perspective. The average monthly downtime of Google Mail in a typical year comes to 10-15 minutes per month.
So back to our original question - does the cost argument for moving to the cloud bear out? With infrastructure and management savings, the promise of new ways of working delivering productivity benefits and the potential for reduced downtime there are evidently many ways businesses can save with the cloud.
Ultimately this will be for CIOs and their boards to decide, but with 3,000 businesses signing up to Google Apps each day and my own sense from conversations with European IT directors, it feels like a reduced total cost of ownership is proving a strong draw for cloud computing.