Can cloud enable businesses to use IT as a strategic weapon?

IT departments are using cloud computing to move IT resources from Capex (capital expenditure) to Opex (operational expenditure) on the balance sheet. But do businesses understand the true benefits?

New research from Computer Weekly shows that IT decision makers are increasingly opting for cloud services, whether it is internal or external, to provide IT infrastructure. Cloud computing is especially useful when the business wants to try something new.

In the survey of 330 IT decision makers, 22% said they would be implementing private clouds in 2013, while 27% said they would implement systems on a public cloud. When asked how the adoption of cloud computing was affecting their IT budget in 2013, out of 116 people who responded, 35% said their budgets for cloud were increasing. The survey also found that 16% said they would be spending more on cloud computing during 2013, although the increase did not reflect an increase in their budget related to procuring cloud services.

Worryingly, for almost a quarter of people who participated in the study, their spending on cloud remained flat, which suggested that the business has no appetite for IT spending. Computer Weekly spoke to a number of IT decision makers about whether the board appreciates the benefits of cloud.

Rob Fraser, CTO for cloud services at Microsoft UK said: “We have been seeing anecdotal evidence that a lot of the most impactful and interesting business transformation projects are being driven by people within business lines who instigate projects predominantly using cloud technology. He said people within businesses were using software as a service to take forward strategic initiatives.

Alignment with the business

Bert Craven, EasyJet’s enterprise architect, said: “AtEasyJet we have very tech savvy business people and very commercially astute IT people. There isn’t a divide.”

He said this was important in order to make big transformational changes, such as when the company decided to start offering allocated seating. He said cloud computing lessened the risk of moving fully to a seat allocation system, since the way it has been implemented at EasyJet meant the airline did not have to make major changes to one of its core systems.

He added: “We delivered it as pilot and presented as a trial of allocated seating. If it had been a disaster or hadn’t improved customer satisfaction, there would have been a temptation by the business to turn it off. It is much easier to turn off a cloud solution than to have to tear out all the functionality from the reservation system.”

Cloud bursting business initiatives

At Channel 5, IT has used a hybrid cloud to support massive peaks in traffic that it experiences, through audience participation, where people interact via the web and social media. Computer Weekly spoke to Clive Malcher, head of product development and technology at Channel 5, about how cloud computing help him manage the IT behind the Big Brother show

He said: “When people watch something interesting on the show, they immediately grab their laptop, tablet or mobile phone and go to one of our [IT-powered] services. So we see huge traffic spikes during the show around an eviction, or when a juicy bit of gossip comes out. We’ve seen spikes of over 1,000% that occur over a few minutes.”

Empowering innovation

Doug Clark, who heads up IBM UK’s cloud computing lead said businesses can be transformed through cloud computing. As an example, he said: “Sunderland City Council wanted to use cloud computing support startups.” The council’s old datacentre provides infrastructure as a service (IaaS) available as a cloud service for the startups. “The council has become a managed service provider for the local community. By putting the startups in one environment, people are talking to each other and sharing ideas,” he said.

Research from analyst Forrester commissioned by Microsoft found that business and IT have different agendas when it comes to cloud computing. The analyst company found that while IT projects focussed on private cloud projects including infrastructure or desktop virtualisation, business-led cloud projects turned out to be more driven by the need for speed, easy access for business users and improved collaboration.

Cloud computing is driving business transformation. According to the experts Computer Weekly spoke to, IT decision makers need to work closely with the business to understand where cloud can accelerate, de-risk or simply provide the horsepower, for a business initiative.

William Fellows (vice-president at 451 Research) said: “Organisations are using cloud computing as a device to rethink their IT strategy and start using IT as a strategic weapon.”

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