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Pre-empting business strategies for cloud computing

C. K. Lam | June 30, 2009
This new computing model is creating a huge buzz of interest among service providers and end-users because of its potential to deliver major cost and operational benefits.

As cloud computing continues to emerge as a mega IT trend, changes in the overall IT services and computing landscape are imminent. Numerous IT companies have already announced new cloud computing visions and are implementing key strategies. Leaders in the field, such as Amazon, Google and IBM, are endeavouring to turn cloud computing into a reality by announcing key services along with strategies that are rooted in this new concept.

The reason why this new computing model is creating a huge buzz of interest among both service providers and end-users is because of its potential to deliver major cost, operational benefits. These include a significant reduction in operational expenditure as services replace the need to purchase infrequently-used IT resources; and the ability to respond immediately and inexpensively to changes in demand for IT resources. Other benefits include providing a reasonable price model for selectively purchasing IT resources that a company really needs; using those resources on a pay-per-use basis; and improved financial flexibility.

However, cloud computing, which is often expressed in network configuration charts and seen as the future of network-based IT services, is not an easy business model for service providers to implement. It rolls together a range of IT conceptssuch as network computing, SaaS, server-based computing, utility computing, and grid computinginto a single, all-encompassing service abstraction. Like utility computing, it relies on a complex networking infrastructure to enable IT services and handle huge volumes efficiently.

To enable cloud computing services, service providers, therefore, will need large-scale IT centres and robust IP networks, as seen in SaaS or utility computing. At the same time, the services need to be reliable, and the provider must have intimate expert knowledge about business operations.

One service, several benefits

This provides strong opportunities for network service providers that have already mastered the complexity of operating large data centres. They are better positioned to pre-empt markets for cloud computing if they can utilise existing service infrastructure and management systems.

Telecommunications companies can grasp the new business opportunities presented by cloud computing by leveraging their inherent market advantages in having an IP infrastructure and operating capacity that goes far beyond those of other IT service providers.

In addition, communications-related operating software that has been enhanced and standardised for service improvement during the last decade fits well with cloud computing. Next-generation telecommunications technology such as IMS, which can efficiently provide services using an IP network or next generation network (NGN) service architecture, is also a logical service component for the cloud computing environment.

To translate these advantages into sustainable growth, based on the provision of differentiated service, the cloud computing, network service providers need the following:


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