Thoughts on the Business Case for Cloud Computing

I've been thinking a great deal lately about how to make a proper business case for cloud computing. What can I do, research, say, present, write, or pantomime that will respectfully and properly communicate the value of cloud computing technologies to business executives that may or may not be technically inclined. In fact, I originally started this blog to do just that in large part.

A excerpt from a recent InfoWeek article states, "Using the cloud, Eli Lilly can now deploy a new server in three minutes (instead of 50+ days) and can get a 64-node Linux cluster online in five minutes (instead of 100 days). Those types of technological breakthroughs can help IT teams cut maintenance costs and fund innovation. And at Eli Lilly, the managerial breakthrough came when it focused on the cloud's possibilities instead of its uncertainties."

That is profound change. So, naturally, that led to some deep thoughts. Well, maybe not Jack Handey deep, but deep none the less!

Cloud computing technologies make the Information Technology department into a cutting edge business innovation engine. An engine that delivers a competitive edge to the businesses for which it works. How long does it take you to deploy new servers for your business units? Would simply doing it faster yield a positive ROI for you? I'd say in many cases the answer would be yes.


"Do or do Not... there is no try." -Yoda


Warren Buffet has been one of the greatest allocators of capital in modern times. His work and efforts are truly humbling to us mere mortals. However, geeks may have their day as the Warren Buffet of the future may just be an excellent allocators of compute, storage, network, and memory in cloud-like technology deployments! It's my opinon that the effective allocation and management of technology can yield far better than average returns on dollars spent.

What I'm proposing is that the effective allocation of technology, perhaps call it "technical capital" with better process, provisioning, and management via Cloud Technologies can make almost any businesses more effective and competitive. This, in my opinion, is the act of a business becomming more technically agile.

Every day in business is asking the question of what is the most effective time and money allocation I can do now and in the future. Converting time and money, which is what it's all about anyway, into technical capital and investing it for maximum return on investment is very wise. Dollar for dollar the mindful allocation of technical capital can have a dramatic and disruptive effect on the effectiveness of any business and it's overall operating capacity. Cases such as the Eli Lilly example above or another recent example provided by Geir Ramleth, the CIO of Bechtel show this very clearly. "Ramleth knew a more drastic shift in how IT services are delivered would be necessary to support the company's complex, distributed business model." Ramleth knew this three years ago! He was well ahead of the curve acting when others were not even thinking yet. Let's not forget that resistance to change is a significant barrier. The friction one might encounter when trying to displace time and money with disruptive technologies like On-Demand or Cloud Computing is substantial. Prepare for that eventuality as well.

I think it's safe to say that most companies would not be pleased if their competitor had harnessed a new technology that gave them great advantage in a similar industry or vertical. I think it's safe to say that, in some cases, Cloud Computing technologies provides something a technological economy of scale that is difficult to overcome. This is quite evident in the case of an early mover like Google. The computing power of the Google cloud is overwhelming and has always been a competitive advantage for Google.

It's my thinking that it is, in large part, quite reasonable to take Cloud Computing and it's related technologies seriously. Their ability to help harness the true value of technical capital thereby leading to a more technically agile business lends itself to real analysis and eventual, and I think relatively rapid, implementation in many use cases.