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A fundamental shift is happening in IT, and that shift is the Cloud. Those organizations that embrace the Cloud early are going to be the first to realize its advantages. If you analyze it logically, the Cloud is the next logical step in the web-enabled technology revolution, but that’s not the reason you should consider moving to the Cloud sooner rather than later. The reason is that, like each previous generation of technology, the Cloud will enable businesses, and IT departments, to do things that were not practical in the past.
The Cloud, which is going to create a universal information and computational resource that is both more powerful and easier to use by greater numbers of people than previous generations of technology, is finally going to deliver Web 3.0. It’s going to deliver virtualized and standardized infrastructures and service components that can be bundled, unbundled, and rebundled to create new and innovative business platforms on-demand and, in short, make Service Oriented Architecture (SOA) useful. You’ll be able to get the services and infrastructure you need to build your applications, not just services that you have to integrate yourself in your own data centers.
This is important in the new world economy where business processes that were once tightly confined within single, vertically integrated companies now stretch across multiple companies in your supply chain and where a typical value chain consist of more than 20 different entities. Furthermore, your average company needs to manage multiple, and sometimes dozens, of individual value chains. Optimal business processes that drive each chain must be lightweight, connected, and tailored with the right degree of granularity. A service chain requires different information to be tracked than a product chain. When the Clouds emerge, you’ll be able to build your own end-to-end value chain platform by selecting just the software components you need to manage each business and supply chain process required by the value chain. Instead of having to select one or two dozen different software products from half a dozen or more different providers which then have to be integrated through an expensive custom development effort that uses third party middleware to route all data through a central data warehouse in your (managed) data center, you’ll select a couple of dozen modules and then “integrate” them through the BPM (business process management) component simply by defining the process flow and the data stores. What now takes months, or years, of effort will be accomplished in weeks, or even days. And since the Cloud is the logical extension and integration of SaaS and pay-as-you-go web-based storage, you won’t have to every worry about expensive up-front capital cost license acquisitions (for seats that you might never take full advantage of) because your technology will simply be a pay-per-use service.
And even though there is currently more hullabaloo about why Clouds will fail than why SaaS will fail, which primarily originates from those providers that have a lot to lose when the shift happens, the Cloud is coming. As the author of this fine article on Cloud Computing and the Promise of On-Demand Business Innovation notes, just ask any survivors of the retail book industry about the “non-secure, unreliable, poorly-governed” Internet and Amazon.com. (Let’s just say things were very different 15 years ago.)
Short story … not only should you be looking for SaaS providers when you acquire your new supply chain platforms, you should be looking for those that are Cloud friendly. They don’t have to be on the Cloud today, but those SaaS providers that are preparing for the shift will be the first to realize the advantages, and thus the first to provide you with the advantages the Cloud will offer.
Also, CRM Buyer ran a good article on Monetizing the Cloud 101 that is a good starting point as well and Vinnie Mirchandani has a number of great posts on cloud computing.