The reality is that we have been using cloud services for years without knowing it, without calling it the cloud. Anyone who has ever signed up for Gmail, Webmail or Yahoo! email account has used a cloud-hosted email account – where your email service is not stored and kept primarily on your computer, but accessible on the internet wherever you are. And if you think that didn’t apply to you, don’t forget that your Blackberry is also a cloud-hosted email service stored and kept on one of Blackberry servers. The cloud is far from new – it’s been here for a while already and is spreading to all areas from data storage to office telephony and communications.
How did we get here? Why are here?
Way back when, with the advent of computers, it was the companies that wanted to get ahead, that invested in information technology such as computers, word processors, internet, servers in the back room, email for all staff, because the extent to which the business could use IT in order to operate more efficiently and quickly was a crucial differentiator. At that stage, you could make your company more competitive by applying technology to your various work processes and gain a march against your competitor who didn’t do the same.. This is no longer the case.
Now that IT services are much more readily accessible, it is no longer a differentiator but rather an essential cost of doing business. It’s now a commodity service like having running water in a building. And this is how the winds of change blew in the ‘cloud’. As with anything that becomes commoditized, the focus shifts to how the service can be improved – to be more efficient, and be better and even at lower price points.
We have seen this before
These kinds of shifts have happened before. As Nicholas Carr pointed out his book, The Big Switch, about a hundred years ago every business had to produce their own electricity to power their operations – this enabled them to get ahead of any other business that was using more primitive sources of energy at the time. Eventually, there were industrial advancements that enabled electricity to be transmitted over long distances and you didn’t have to create electricity in your backyard to have access to it. Major electrical companies emerged to provide this utility and it ceased to be a differentiator and it became a commodity. Businesses didn’t have to do this for themselves and it ultimately made them more efficient as they could focus on their core business instead of worrying about how to generate more electricity – if you are making clothes or furniture, why bother being an electric company for your own needs and build expertise in that if you don’t need to?
The impact of this shift was profound. Not only could businesses focus their resources on their primary business, but it also opened the door for smaller-scale businesses that had previously not been able to generate their own electricity. And then products and services that exploited this easy access to electricity became commonplace over time – televisions, vacuum cleaners, photocopiers and almost everything you can think of. This created whole new industries and ushered in the modern world as we know it.
The new kind of power plants
In the shift today, we see a new kind of power plant emerge: computing plants that will ‘power our information age the way electric plants powered the industrial age’. Computing power and utility can be generated in plant-like data centres – the cloud – and delivered to business and individuals through the internet. Just as the shift to centralized power plants did, cloud-based services will enable us to operate at greater levels of efficiency than ever possible before, making computing applications a ‘cheap and universal commodity’.
We have already noted the use of email services in the cloud as an example. And it doesn’t end there. It is no longer necessary for companies to have back rooms to host large servers on their premises; servers of even greater power are accessible on the cloud through services like Amazon’s EC2. We can back-up all the data on our computer through cloud services like Dropbox that perform the back-up automatically.
Before the cloud, the only way to manage office communication and calls was to buy a big box PBX system – now an entire PBX service can be hosted in the cloud and easily manageable online, with only a phone connected to the internet in your office or home to make and receive calls. Even office telephony will be significantly improved through the cloud; from the portability that comes with the cloud (accessing your office telephony system wherever you are, connecting multiple branches, home and mobile workers); to the lower entry barrier where any business no matter how small can access a full featured PBX service without a high capex cost.
The cloud is not hype as it is already self-evident and motivated by factors that are almost unstoppable – the efficiency of operation being primary. Why bother maintaining a server room or a telephony system when it is not your business’s core function? Surely the only services that should be maintained in-house, that a company should take on the cost of ownership for, should be those that give a business its competitive advantage over others – and not support services like email, telephony, data storage, servers and such like? In answering these questions, cloud-based services will undoubtedly shunt us into next age.