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Riding the Cloud To Improve Your Top- and Bottom-Line Economics

April 20, 2012 - 22 Comments

A cloud revolution is brewing, and it promises to radically transform the way we compete, collaborate, and consume business services.

Join the live webcast with Sprint, CSC and ETS on the impact of cloud computing on business models and bottom lines.

Wed. April 25, 11 a.m. – 12 p.m. PDT – No registration required:

What are the factors motivating businesses to rise up to the cloud opportunity? One key advantage is business agility: Cloud offers the ability to address unpredictable application events weighing on a company’s data center, meeting the challenge from sharp, sudden usage spikes. At the same time, cloud promises more efficient ways to address new products, customers, and selling situations.

In other words, cloud drives top-line growth and improves the bottom line.

Cloud drives top-line growth from:

  • Improved business speed, reach, and scalability, with faster provisioning
  • New services innovation, transforming IT from a cost center to an enabler of business and competitive advantages
  • Competitive differentiation through adoption of new capabilities such as mobility and video
  • Improved business resiliency through better uptime

Bottom-line impact is driven by:

  • The ability to pay only for what you consume, when you need it
  • Improved employee productivity resulting from a consistent user experience and access to state-of-the-art applications
  • TCO reductions greater than 50 percent for the data center and reductions in application costs—for instance, collaboration application cost savings of up to 23 percent
  • Reducing the risk of technology obsolescence in the data center

Moving to the Cloud

We live in a world of many clouds. The challenge is to understand which cloud model is best for each organization and opportunity, and then to understand how best to connect with other clouds to achieve cloud’s full potential.

A good place to start is with a better understanding of the different types of clouds:

  • Private Clouds: A cloud-like structure within a company’s own data center where virtualized servers usually operate as one unit
  • Public Clouds: An on-demand outsourcing arrangement with a third-party provider offering cloud-based software, infrastructure, or computing platforms as a service (software as a service, or SaaS; infrastructure as a service, or IaaS; or platform as a service, or PaaS)
  • Hybrid Clouds: A combination of private clouds and public clouds, where mission-critical applications or highly sensitive data are maintained on a company-controlled private cloud—but where public clouds are employed for other applications that may be especially complex, offer irregular demand patterns, or require frequent updating.

Private clouds offer the security and control that public clouds don’t, and represent the lowest-cost option. In exchange, they may lack the rapid scalability of public clouds.

Of course, public clouds have drawbacks of their own. By using a standardized application or platform, customization is limited. Plus, a customer must be comfortable with the additional risk if sensitive information is entrusted to a third party.

Hybrid clouds may offer the best option for many organizations. They can minimize risk by retaining risk-laden applications while farming out less-sensitive but spike-prone applications. In short, the hybrid cloud’s fundamental strategy could be described as “Buy the Base, Rent the Spike.”

What Are My Next Steps?

To further clarify the call to cloud action, Cisco IBSG offers a five-step roadmap to cloud success:

1. Is Your Company Ready to Consider Cloud-Centric Practices?
The company may need to fully consider its strategy, computer efficiency, legacy applications, current infrastructure, and overall capabilities.

2. What Is Core vs. Context, Mission-Critical vs. Non-Mission-Critical?
Which applications and IT capabilities represent core business processes that win customers by differentiating the company from the competition; and which are essential to the daily operation of the company, causing immediate risk if they are lost. Those aspects of IT that are context and non-critical may be the simplest to migrate to the cloud early on.

3. Opportunity Analysis: Where Can I Buy?
At this stage, the company can examine the options for the public cloud, including costs and which outsourced cloud services are best for their individual needs and challenges.

4. Which Applications Can and Should Be Migrated to the Cloud?
Companies can consider if an application is proprietary or highly customized, if it is optimized for network delivery, and if there is a high privacy risk if those apps are off premise.

5. Which Immediate Cloud Opportunities Are Right for You?
Decision makers can weigh business value and service maturity, focusing on those applications and services that might already belong in the cloud.

Continue the conversation:

Download the POV Paper: Riding the Cloud To Improve Your Top- and Bottom-Line Economics

Join the live webcast with Sprint, CSC and ETS on the impact of cloud computing on business models and bottom lines.

Wed. April 25, 11 a.m. – 12 p.m. PDT – No registration required:

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  1. Hi, this is a very informative post. Best of all.

    Araç Takip

    • Thank you for reading, Araç Takip! I am especially pleased to hear that you consider this the “best of all.” Stay tuned for more informative posts.

  2. That is a very good tip particularly to those new to the blogosphere. Simple but very accurate information… Many thanks for sharing this one. A must read post! 🙂

  3. Thanks Scott Puopolo. Nice info.

  4. Thanks sir.. Nice Posting

  5. very nice blok ,thnks

  6. Nice info. Best of all.

  7. Excellent written it is. There are good guidelines. Everyone should follow this whose are really wanted to be like that.

  8. Nice info. Really CISCO will remain CISCO. Best of all.

  9. This event is perfectly timed as we are seeing a huge increase of inquiries and requests for private cloud deployment. There are also hybrid solutions being well integrated into enterprise situations that aren’t willing or able to completely make the jump into a full cloud solution. There is no doubt public cloud computing alleviates the worries of IT Staffing, but it does represent a issue related to complete control and of course “privacy”. Too bad there isn’t a Cloud Deployment road map / checklist that works for business of all sizes.

    • Jason, I agree that a cloud deployment roadmap would be a good idea, but I don’t think the path to adopting private clouds is beaten down enough for a clear, uncomplicated roadmap to be developed. First, companies must identify what their motivation is for considering clouds. This could range from saving IT costs to adding business agility. Then, their current IT environment needs to be considered. Are Greenfield capabilities being considered, or would cloud adoption be a rip-and-replace type of project? And so on. At this early stage of adoption, There are many paths to get to a wide varieties of desirable outcomes.