Who is driving public cloud computing adoption?

“Cloud decisions are made from either inside-out or outside-in,” said Skilton, director of Global Application Outsourcing for Capgemini, a global consulting, technology and outsourcing services provider.

 Inside the organization, most often IT sees public cloud computing as a means to reduce the cost of IT services and achieve application scalability, among other things. “The inside-out change agent in IT wants to do data consolidation, application consolidation and revamp their data census strategy and networking strategy,” said Skilton. “It’s a topology problem for them.”

Outside-in decisions to use cloud come from changes in various areas, such as changes in internal employees’ computer usage behavior. “Whole business units, business managers and the users themselves are actually going out and using smart devices, using them to access and input enterprise data, and – sometimes without knowing it – using public clouds,” said Skilton. These usage behaviors certainly worry IT and business-side managers, who in turn look at public cloud computing as an overall management fabric to control, manage and secure enterprise data.

Therefore, in the inside-out cloud adoption scenario, internal IT is looking to develop new capabilities for organizations without huge capital expense. The outside-in change agents’ computing behaviors are forcing IT and business managers to evaluate cloud as a means to use on-demand applications via the cloud and manage that usage.  

Business’ interest in adopting cloud computing

“More and more today, the change agents, the shifters toward cloud are business people,” said Skilton. They face new customer and competitive needs, largely due to e-commerce and Web application usage, which make cloud computing attractive.  

A large pharmaceutical company’s approach to adopting public clouds is Skilton’s favorite example of the business side acting as a cloud change agent. The business side of this large, geographically dispersed firm determined that small-to-mid-sized subsidiaries needed to boost IT capacity to compete head on with a particular large competitor. They advocated the use of public clouds. Now, the small companies within the larger company go out and get their own infrastructure without incurring capital expenditure costs. The result is the ability to compete effectively head-on against larger players.

Public cloud computing can be an equalizer for small to mid-sized businesses because it provides competitive-level, equivalent access to a market shared by larger competitors. “The long-term economics of this type of public cloud usage still have to play out, but there are promising signs,” Skilton said.

The most promising signs are taking place in large-scale public clouds in Europe, particularly in the government area, where cash-strapped countries are playing catch-up with data protection, sovereignty of data and management of many agencies and citizen-facing processes. “Governments are realizing that cloud computing could have a positive impact on the national infrastructure, as well as the way their business markets evolve,” said Skilton.

The World Economic Forum’s (WEF) research has shown that adopting cloud computing can potentially increase a nation’s gross national product, Skilton said, referring in particular to a May 2010, WEF study, its first on the economic impact of cloud computing.

WEF’s recent follow-up study, “Advancing Cloud Computing: What to do Now?”, reports that public cloud usage is enabling governments to manage socio-economic programs more effectively. Specifically, public clouds deliver accessibility to Web-based, always-available applications and data that helps citizens get healthcare, education, financial services and disaster relief information and services in less costly, more efficient ways.

The business-side impetus to adopt public clouds is the most compelling inside-out change agent, particularly for realizing quick return on investment, entering new markets and maximizing customer service, according to Skilton. Public cloud is a new competitive model – enabled by SOA’s abstraction of application, process and data services – that has put business competition and the need for business agility in warp drive.

A public cloud calls for a new type of manager

Looking at companies that have adopted public cloud, Skilton has seen them struggling to create a program or an approach that enables full use of cloud capabilities and opportunities. Generally, existing business, development or IT positions or job descriptions do not lend themselves to public cloud decision-making, strategic planning or management.

“What we’re finding is that there’s a need to think slightly out-of-the-box, to think away from where you may be doing things today,” Skilton said. Leaders have to take IT, development and business “slightly out of their comfort zones.”  

The internal public cloud adoption leader should have a role that fosters business innovation, Skilton said. The ideal “business innovation manager” would have business, systems engineering and Agile or Lean methodology experience. That leader would work with business, development and operations to target areas where cloud is best suited to enable speed, scale, economies, innovation and more. Most importantly, the business innovation manager would bring together outside-in and inside-out needs to create an overall public cloud strategy.