May 23, 2012
CloudU Notebooks is a weekly blog series that explores topics from the CloudU certificate program in bite sized chunks, written by me, Ben Kepes, curator of CloudU. How-tos, interviews with industry giants and the occasional opinion piece are what you can expect to find. If that’s your cup of tea, you can subscribe here.
Financial and other consulting firms tend to be pretty risk-averse generally. That’s a bit of a generalization, but one that is fair from my experience. I’ve had a little bit to do with many of them and in my experience they’ve been very much at the tail end of innovative application of cutting edge technology. It’s always interesting then when I receive some content from one of these organizations that shows they understand the value that innovative solutions can deliver.
Recently I’ve come across two examples of this sort of understanding – one from PriceWaterhouseCoopers (PWC) advocating the cloud and one from KPMG detailing economic benefits of the cloud. While not exactly ground breaking information, the very fact that these sorts of organizations are even talking about the validity and value of cloud is an indication that we’ve reached some kind of mainstream tipping point.
First up is PWC. Matt Weinberger tells the tale over on Services Angle of how Mike Pearl, the cloud computing leader for PWC, wrote a guest post for Forbes extolling the virtues of the cloud. It’s worth reading the post in its entirety but to summarize, Pearl draws analogies between credit as a critical driver of growth for financial services and cloud computing. It too allows organizations to grow beyond the limitations put in place by physical assets.
Pearl articulates four ways in which cloud can add value to a business, and these four enablers closely map to what we’ve been saying here all along;
• Cloud enables IT to move from “keeping lights on” to truly strategic operations
• Cloud changes the very workflows an organization uses as flexibility and “Bring Your Own Device” allow for ways of working only dreamed of before
• Cloud enables rapid innovation for new products and services
• Cloud enables heightened collaboration both within and outside an organization’s physical and virtual boundaries
Pearl finished with strong words for this generally conservative industry:
“Far from being the latest technology craze, cloud computing should be regarded as a strategic asset that helps organizations transform their business models by creating new products and services and new modes of engagement among employees and with customers. Is your organization ready to capture the opportunities?”
The second area of interest was a recent KPMG report based in Australia that looked at the economic impact of cloud. The report is specifically Australia focused, but is interesting on a more general level. The headline figure in the report estimates that adoption of cloud services across 75 percent of ICT spending would result in an increase in long-run GDP after 10 years of $3.32 billion per annum.
The report found that reduced capital and labor costs in line with the efficiencies that cloud brings would mean significant gains for GDP – and that as the proportion of IT spend that moves to the cloud increases, so to does the GDP benefits that economies could enjoy. I’ve long said that the primary benefit from the cloud isn’t one of cost savings, but it’s interesting to look at the macro-economic impacts that cloud can drive.
Speaking to the challenges encouraging cloud adoption, Nicki Hutley, Chief Economist at KPMG said:
There’s a critical need to continue to find ways to improve productivity in Australia… Widespread adoption of cloud by businesses and government is the next key area of potential productivity improvement.
An Australian-centric theme but one that is mirrored across the globe. This is the first time I’ve seen any high-level macro economic research into the impacts of cloud computing – while we’ve all been focusing down at the details levels, to the changes that cloud can bring to individual organizations, it’s good to see people thinking about the bigger picture – and even better to see that cloud benefits translate for broader economic benefits as well.