23
Jan

Cloudnomics

Often we discuss technology trends and the changes they cause. We debated the technological complexities involved and estimated its rate of market adoption. But most of the technical articles forget one key factor: the driving force behind the adoption of any technological change is the economic factor.

When looking at the future of IT, we can learn something from the past and how organizations and society invested in these technologies. In the past, a few mainframe companies had access to computers (the computers were too expensive) and the expectation was that IT would enable them to automate their business processes, to make them faster and cheaper. Later we saw the emergence of the distributed model, client-server, which cheapened the cost of acquisition of technology, allowing you to create solutions aimed to generate more speed and functionality demanded by specific Departments. However, the rapid proliferation of different systems has created a demand for integration that culminated in the emergence of the ERPs.

The situation today is very different from years ago. The Internet is already a part of our daily life and is ingrained in the IT business. The companies did not begin to settle more in just reduced costs. This is “business as usual”, the duty of every self-respecting manager. IT has already done much in this sense, “how to create shared-services center and consolidate its data centers?“. IT now has the opportunity to be looked at from the perspective of revenue generation and as a platform for creating new business and support growth strategies and not just an operational area.

To view IT as revenue generator is a different “mind-set“, because IT was always seen as supportive for the business, but now, it generate new revenue. Now IT can be seen even as its source of income. The adoption of IT cloud computing allows you to generate revenue and profits. We can start talking at the end. Cloudnomics.

Cloudnomics can be translated as a new economic model for IT, where metrics like TCO lose enough of its importance and IT begins to be seen through the eyes of a business case. In fact, any business is started to go forward, generate revenue and profitability!

As cloud computing enters this process?

With public cloud. IT will no longer install, configure and upgrade physical servers, and the standardized and automated processes that characterize a cloud environment, the number of technicians dedicated to support greatly decreases. IT can focus on innovation and value creation for the company. The cost models also change with cloud and its concept of elasticity. You pay for the use of resources consumed, which can be directly linked to revenue generation, increased use of IT, more revenue generation. It is an economic model that changes the rules of the game. It costs the same to rent a server for 1000 hours to 1000 servers for one hour.

A practical example of how the current IT model limits the generation of significant revenue: To explore new business opportunities that have a short life. In the current model, it is not economically justifiable to purchase a technology platform and put it into production (with high up-front investment) for it to operate for only a few months, taking advantage of a unique business opportunity. The bill probably will not close. With this cloud, it is perfectly possible. A simplistic example, but it shows the idea: producing an animation, where the defendant is a huge computing power to render final film, much more than the sum of all previous months of production and that after the closure dispensing with all computers. Cloud computers are allocated as they are needed and that there is no turning off computers . The provider, in turn, also enjoys economies of scale, keeping thousands of servers to be shared by hundreds or thousands of customers.

The conceptual shift is much larger than technological change. Comes the entrepreneur CIO, attached directly to the CEO. A profile is much less technical and more focused on business and entrepreneurship. In fact, a suggestion of an MBA could be “Entrepreneurship in IT” .

Among the structural changes to IT, we see the start of an organization aimed at supporting other sectors of the company to a revenue-generating industry and the transformation of an organization focused on building activities and support systems and computing power for an organization aimed at creating a computing platform where new businesses will be generated. The choice of applications and consequent utilization can be moved to their users.

This new IT may act as an incubator for business start-ups within the company.

Finally, IT is a business unit which is simple to write, but hard to put into practice. Sure, it’s not going to happen from one day to another, but a process that will happen over the next year. But can get started today.

ESDS

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