Raj Sheelvant's IT Strategy Blog

Anything as a Service (XaaX) is potentially game-changing technology that could reshape IT. Amazon, Google and Salesforce.com have the most mature offerings. Other companies like IBM, AT&T, and Verizon are jumping on the ‘cloud’ bandwagon. Will it attract large number of customers? I think IT executives of large organizations will stay on the sidelines and will decide not to enter the cloud now, during its infancy.

The lingering questions about reliability, security and overall performance hang over cloud computing providers. Large companies do not have the risk tolerance to start using cloud computing immediately. Most CIOs and IT Executives in large organizations will wait for the technology to mature before putting even the most non-essential applications on someone else’s servers. But according to a recent article some large companies that are accepting the risk are allowing isolated teams working on one-off projects to peek into the cloud and catch a glimpse of its value. The article also states that whether they’re tapping the capabilities of software as a service (SaaS), platform as service (PaaS), infrastructure as a service (IaaS) or any of the countless other XaaS alternatives flooding the market, businesses find all manner of benefits from the cloud.

But the question still remains – Is it a game changing technology? As long as large companies perceive ‘cloud computing’ as risky, it’s not going to be a game changer.

While Large Organizations are slow to adopt SaaS model, SMB (Small and Midsize Businesses) are increasingly using ‘cloud’ computing as the perception of risk has changed according to this article ‘Warily, Small Businesses Look To Cloud Computing’. Also, most small-business owners lack the time and expertise to develop and maintain a dynamic and attractive Web presence, their risk tolerance is higher. With ‘cloud’ computing, SMB gets access to the Enterprise Application with minimal upfront investment. At the same time cloud computing providers get an opportunity to continuously work to perfect this unique delivery model. This symbiotic relation between SBM and Cloud computing providers will make this emerging technology more pervasive in the near future. This in turn will reduce risk and will attract the large organizations to ‘cloud computing’ environment.

So, in the long run, most of the companies (large, mid size or small) do not want to have the overhead cost associated with running a large IT department that is solely involved in sustaining existing enterprise application. The need to upgrade (both hardware and software) as the half life of the technology keeps lowering is going to force the companies to look at cloud computing seriously. The ability to outsource ‘commoditized’ IT infrastructure and contextual IT applications (like payroll, HR etc.) will enable the companies to focus on their core competency. More importantly, the IT department within the organization will be able to focus on aligning IT to the business needs. IT can focus on building applications that will create/sustain companies the core competency. So, cloud computing makes sense and slowly this delivery model will end up disrupting traditional delivery model.