Small and medium-sized businesses (SMBs) are leading the way to cloud services. In fact, SMBs represent two-thirds of the public cloud market, outpacing the growth of enterprise cloud adoption by about 10 points, according to a recent McKinsey report (“Outlook—Overcast and Bright: How the Cloud Is Transforming IT for SMEs,” McKinsey & Company, July 2011). Yet, many service providers (SPs) are wondering whether the rate of SMB cloud adoption makes it worthwhile to invest in cloud and managed services for SMBs. They are asking:
Is now the time to invest in SMB-focused services?
Earlier in my career, I helped Wall Street find cutting-edge solutions to the radical challenges posed by the first great wave of computerization. Today, the changes shaking the financial industry are no less extreme, as firms negotiate the combined forces of globalization and regulation, while adapting to next-level technology that is lightning-fast, hypermobile, and reaching for the cloud.
Several weeks ago, at the 8th Annual High Performance Computing Financial Markets Show and Conference in New York, I outlined Cisco’s vision for the Global Connected Marketplace and the transformational shift in the consumerization of IT that it portends.
For the last decade, IT organizations have faced the challenge of managing budgets that are 70-80% channeled towards maintenance costs while business demands are growing faster than ever. The result is that many requests for new projects have to be turned down and more and more business opportunities are missed.
If we look within the data center, the majority of the costs is associated with people and software, but the the root cause of those costs is legacy infrastructure that is very complex and expensive to manage. The flaws of this legacy infrastructure are often masked by layers of complex management software, which have developed to stitch together systems that were not designed to be integrated.
Legacy infrastructure prevents business agility and financial efficiency because it was not designed for environments like Cloud that require fast deployment, automated provisioning of resources, open-API’s, and “self-service” consumption models by business users. Nor was it designed for environments where physical and virtual resources have to co-exist. Finally, it assumed operational models that can’t meet the Performance, High Availability and Security requirements in the context of workload mobility and deep integration between compute, network and storage environments.
As a result of all this, Data Centers have evolved towards an accidental architecture that still contains too many silos of applications that are difficult to maintain and manage.
For these reasons, Cisco has created the Unified Data Center platform, which provides a new approach to design the data center infrastructure and prepares our customers for the opportunities that Cloud will bring along in the future.
Cisco has a long history of anticipating the convergence of technologies in an effort to reduce costs, streamline operations, or unlock new ways for the business to leverage technology. Cisco has a deep understanding of these transitions, having helped reshape the industry numerous times in the past, most notably with the convergence of voice and data. We are now doing the same by bringing together Compute, Network, Storage and Management within and across Data Centers.
Successful transitions involve new ways of not only thinking about the business challenges, but also about designing the underlying technologies to be agile, efficient, and simplified. Bolting together existing technologies doesn’t deliver the desired result.
A Unified approach is needed to unlock this new business potential.
Today, Cisco introduced CloudVerse, an end-to-end solution to build, manage and connect clouds. Cisco revealed how it sees the cloud: one in which it enables the world to operate more simply not just from one collective cloud but rather a world of many clouds where the organizations can choose how their cloud solutions are developed whether it’s a highly secure private cloud, a more open public cloud or a hybrid. Within these various cloud environments, IT is delivered as a service and end users can collaborate dynamically and consume content on-demand.
With Cisco’s network based cloud solutions serving as the foundation, Cisco also introduced new enhancements and functionalities to its ever growing Hosted Collaboration Solution (HCS). The Cisco Hosted Collaboration Solution gives partners, including service providers and integrators, the ability to deploy multiple collaboration applications on one server in a virtualized environment and then host those applications for multiple client organizations. The solution is designed to be run from partner data centers. Just last week, Fujitsu’s Andy Stevenson, executive director of their hosting and network services group discussed how they’ve combined their experience and expansive networkto develop anew hosted offer, the Fujitsu Cloud Connect service.. Fujitsu’s new service helps employees collaborate more efficiently on any device using a uniform suite of Cisco collaboration technology available on demand.
Lower margins resulting from both the commoditization of transaction economics and the high cost of supporting IT-intensive infrastructures are putting tremendous pressure on financial-market companies. This is causing many firms to rethink their business models to create new revenue streams—and reduce costs—across traditional functions such as pre-trade analytics, risk management, and post-trade reconciliation. These functions are now seen as critical business processes that can be “shifted and lifted” into a cloud-enabled service delivery model.
Key enablers of success will include the development of new cloud operating models and strategic sourcing capabilities delivered via networked services. This will provide financial-market companies with greater business agility, and a path for effectively shedding capital-intensive assets from balance sheets for re-investment in new innovations and for producing positive company valuations.