Cloud Computing and Variable Costs

Any discussion of cloud computing will certainly be accompanied with thrashing and gnawing of teeth.  This past August I was teaching a course on technology development in Bangalore and Chennai to managers and systems developers working for a variety of high-profile IT service providers.  There were significant areas of agreement; but there were some topics, which appeared to be splitting hairs, where the discussion was very intense. This is not surprising because the drama is in the details when it comes to market positioning and high-tech one-upmanship.  There is very little agreement on how to define cloud computing.

One of the benefits of cloud computing is that it should permit organizations to add and subtract computing resources according to need.  This means that the computing resources are scalable as workload increases.  This includes the ability to add more data storage and more computing power for web servers, database servers and applications servers for the human resource system, the CRM system, the financial and accounting systems and the inventory management systems.   You can even develop  applications in the cloud  using products such as Force from salesfore.com,  Google Cloud and Amazon Web Services. Google Docs is an online cloud application for creating word-processing documents, spreadsheets, and presentations. All of the browser-based applications of email are part of cloud computing. This Blog was created in the cloud.

Cloud computing permits companies to increase capacity by turning to the cloud, rather than by investing in additional capacity. Cloud computing simplifies management’s agenda because capacity planning is easier. In environments characterized by fluctuating demand risk is reduced because the breakeven point is lower. In an ideal cloud computing environment, the IT resources are scalable and the costs are variable and perhaps traceable to a particular product or service.

Cloud computing has the potential to be a major technological advance, but until we see the ideas and applications maturing it will still be approaching the top of the “inflated expectations” curve of the Gartner Hype Cycle with a  partly cloudy future.

Here are a couple of YouTube videos that explain cloud Computing,

Cloud gold

Cloudy Tonight and Tomorrow