Rise of the cloud
Risks and rewards of cloud computing detailed in research from Accenture
Executives around the world are discovering ingenious ways to put cloud computing to work. Whether companies are reducing costs, developing innovative new products, improving operations or running important enterprise applications, executives believe the cloud can provide lasting competitive advantage. In this excerpt from Cloudrise: Rewards and Risks at the Dawn of Cloud Computing , Accenture's Jeanne G. Harris and Allan E. Alter take a look at how companies are taking advantage of this technology, and provide specific steps business decision makers, IT leaders and governments must take to move forward.
Advantages from the cloud
Cloud computing is already changing how organizations conduct business in a multitude of ways:
Energy savings. Cutting energy costs is a common motivator for pursuing clouds. Corus Automotive Engineering Group expects to cut power consumption and cooling requirements by 40 percent by running a private cloud, and cut its carbon footprint by designing and testing materials components against product requirements in a virtual environment.
Analytics On Demand
With shrinking budgets and IT staffs, more organizations are investing in software as a service (SaaS) as the fastest and most mature form of cloud deployment. SAS® Solutions OnDemand offer several options in SaaS and enterprise hosting solutions, helping leading organizations enjoy big benefits with little footprints. Here are a few examples:
CHICOS – This leading women's clothing retailer tripled results on a campaign to bring back lapsed customers using SAS OnDemand: Marketing Automation.
Doubts about the cloud
Gaining a competitive edge
In addition, 61 percent of executives say their organization is pursuing clouds, at least in part, to develop products and services that were not feasible before. Platform services provide a means to quickly develop new systems, test how well they operate when the number of users or amount of data spikes, and then make new software services available to customers, internal users and partners over the Internet. Forty percent say that clouds have great potential for their company as a tool for product and service innovation. We are already seeing new services that were previously unimaginable or impractical:
FINANCIAL SERVICES. Financial organizations are using the cloud to provide new financial information products that require speed, intense analytical capabilities and near-instantaneous scalability. NASDAQ, a pioneer in using the cloud to store market data, is launching a new "Data-on-Demand" service that will provide investors with quick access to historical data on stocks and funds, and allow clients to test their trading strategies.
MEDIA. The cloud is providing new delivery mechanisms for both video and traditional print publishers. Many organizations use YouTube to post training, marketing and product videos. Best Buy has partnered with Sonic Solutions to deliver newly released DVDs directly to consumers' television sets, Blu-ray players, personal computers or smartphones. The Washington Post, Financial Times and other publishers are selling iPhone and iPad apps – allowing users to consume content online from anywhere. Hewlett-Packard has launched a print-on-demand cloud service called MagCloud that automates magazine publishing.
AUTOMOTIVE. Car companies are hard at work developing new features that connect passengers, and even cars, directly to the consumer cloud. For example, Ford is experimenting with new ways for drivers to learn about delays and road conditions ahead of them from other motorists. Since it is unsafe for people to send messages while driving, Ford is investigating how the vehicles themselves can do it. In one trial application, software enables the car to generate data on its location, speed, braking and windshield wiper use. The software then correlates the data with live information from the Web about traffic congestion and weather, and sends brief messages about road conditions via Twitter to other motorists in the area.
HIGH TECH. Fujitsu is launching a service that will help local governments conduct safety checks on aging bridges. The cloud service will allow governments to share digital images and other data obtained during bridge inspections with construction companies. These companies will then be able to quickly provide assessments of a bridge's condition, at lower cost to the government than traditional methods.
Expanding to new markets
Understanding the cloud's impact
However, there are sound reasons to suggest that cloud computing will, in time, usher in new ways of conducting business that will disrupt old business models. Cloud computing is a major architectural shift in enterprise computing. Each previous phase unleashed a new wave of applications and capabilities. This next phase is likely to be a greater one, because it supports not just PCs but mobile phone apps, and connects both devices to far more processing power than previously available. Cloud applications, once developed and running, can be implemented, replicated and upgraded quickly. That means new advances and innovations can be put to work more rapidly than with previous generations of software.
Strategists shouldn't limit their interest in cloud computing to saving money and process improvement. The technology is too powerful and widely available now that the implementation phase in computing has begun. It's time to look for ways in which clouds can transform business and entire industries, develop the management and technical skills cloud computing requires, and take advantage of the opportunity.
* Excerpted with permission from Cloudrise: Rewards and Risks at the Dawn of Cloud Computing. Full report available at: www.accenture.com.
Jeanne Harris is Executive Research Fellow and a Senior Executive at the Accenture Institute for High Performance. Allan Alter is a Research Fellow at the Accenture Institute for High Performance.
Jeanne Harris is Executive Research Fellow and a Senior Executive at the Accenture Institute for High Performance.
Allan Alter is a Research Fellow at the Accenture Institute for High Performance.
This story appears in the Third Quarter 2011 issue of