Savvy and forward-looking organisations are waking up to the fact that cloud computing can deliver multiple cost and efficiency advantages across business-critical IT systems. These benefits include improved flexibility, provision of expert support from specialist providers, greater agility and enhanced efficiency when deploying or upgrading systems. The cloud model also greatly reduces or, in many cases, eliminates entirely the need for capital investment on technology projects by replacing up-front cost with predictable pay-as-you-go operational spending.
To assess how cloud computing is helping companies across the UK, Computing recently hosted a series of discussions for technology and business leaders from a host of British companies and public sector organisations. To listen to the full podcast of this discussion, please click here.
Initiating the discussion, Adrian Steele, head of infrastructure management for Royal Mail Group, described how the organisation's pioneering adoption of cloud computing solutions is delivering significant cost reductions.
"The cloud will bring an awful lot of advantages to Royal Mail Group. The big two are cost reduction – significant cost reduction in many areas: probably between 30 and 40 per cent cost reduction in our existing service base – and flexibility: rather than waiting several weeks to deliver programmes, we are able to deliver in days now," explained Steel.
Slashing operational costs
Fellow seminar participant Mark Luckins, global infrastructure manager at Plan International, a global, non-governmental organisation that works to improve the lives of children around the world, agreed that cost savings from cloud computing implementations could be substantial: "Organisations that can leverage the cloud for most of their normal systems, which offer no strategic advantage when done in-house, can really lower operational running costs," he said.
However, Luckins went on to argue that the real value of cloud does not stop with lower commercial running costs: "It comes from avoiding the overhead of trying to define our business requirements, run large IT projects to realise those requirements, and continue to have systems unique to us."
Cloud: moving beyond the promise of outsourcing
He added that the promise of cloud is similar to the promise of outsourcing as it can ultimately offer organisations better service at less cost. "I think outsourcing, historically, was really about finding the best supplier to run an organisation's IT, which typically was uniquely built and customised," he said. "I think that cloud is about finding solutions off the web that are sufficiently close to what we need, without the overhead of business alignment and customisation."
Entering the Computing debate, Rob Courtney, chief software architect for SSP, a global IT company that delivers consultancy and software solutions to help brokers, insurers and financial advisers, added that the scalability advantages available from cloud infrastructures were highly compelling.
"We've invested quite heavily in our own private cloud to deliver a managed service to our customers, so I think it would certainly reduce our operational expenditure if we were able to take advantage of a public cloud. It would also make us more agile in terms of demand for new environments," said Courtney.
Andy Servides, principal consultant CIO Advisory at Atos Consulting, agreed that cloud computing offers significant speed and agility advantages. He highlighted the ability of cloud technology to enable businesses to quickly create new capabilities and services that can be consumed when and how they are most needed. Additionally, these agile cloud-based services can be rapidly dispensed with when their usefulness has passed.
Flexibility is paramount
Flexibility was also paramount for Nick Barron, sales director at enterprise cloud service provider Carrenza. "You can change your infrastructure overnight – almost – if you feel like it. You're spreading to a monthly cost, and then that monthly cost can obviously vary as your IT infrastructure requirements change," he said.
Atos Consulting's Servides added that an often overlooked advantage of cloud comes from its ability to facilitate business realignment. "Cloud computing forces the business and IT to think about how they work with each other in different ways," he explained. "The business tends to view IT as a business asset that it needs to value, and IT tends to think of the business as a customer that it also needs to value and treat in different ways – perhaps in ways that it's not used to doing."
At a strategic level, Adam Collins, head of strategic consulting at Risual, a dedicated Microsoft Gold solutions partner delivering consultancy and technology solutions, pointed out that cloud computing presents an opportunity to make clever tactical decisions to reduce costs and drive efficiency in IT operation. As such, he pointed out that the model is very attractive to senior finance decision makers as it allows them to shift expenditure from a capital expenditure (capex) to an operational expenditure (opex) operational expense model.
Transferring capex to opex
This point was reiterated by Conor Callanan, chief executive of Core, a UK-based provider of end-to-end Microsoft SharePoint technology services & solutions: "Primarily, it is the move from capex to opex – it's the cost savings involved in that. We can implement systems on an opex basis: test them, try them. So it gives us speed and agility to move platforms quickly, and a need for less internal IT to run and manage them."
Seminar participants agreed that the cloud computing model has matured to such an extent that it is now ready for mainstream corporate adoption. From an IT perspective, the technology has advanced significantly, and matured to the point where once complex solutions could be now bought off the shelf and actually work, according to Risual's Collins.
"It could be a line of business applications, and it also will support you in increasing speed to deployment significantly, which effectively allows the business and IT team to go and customise the solution for a better business fit," concluded Collins.