Last month, at one of the Information Technology trade shows, one of the industry’s pundits made a startling prediction — that the shift to the cloud computing platform will be bigger than the shift to the Internet or the shift from the mainframe to the PC.
“This seems to be a pretty outlandish claim,” says Mark Swanson, the CEO of cloud communications provider Telovations, Inc., headquartered in Tampa, Fla. “After all, the PC and the Internet were two of the biggest technology waves in the past 50 years.”
Smart Business spoke with Swanson to find out if this speaker had his head in the clouds or had at least one foot on the ground.
What do you think of the prediction that the cloud is the biggest IT transition ever?
I think it depends on how you look at it. Cloud computing is really not all that new. In fact, many people claim that we are back to where we started from in the 1960s when computers were time shared from a remote location. Sun Computer coined the phrase, ‘the network is the computer’ decades ago when they had a vision of computing as a utility. This transition is not about inventing a new platform like the mainframe or the PC, but really a transition of how we use computing.
What is fueling this transition is bandwidth. We now have enough fast bandwidth to deliver the same kind of experience that we have on desktop computers so we are starting to use devices to access the platform rather than use the device itself. This transition actually started over a decade ago, but it is past the tipping point and accelerating. I think of it like pouring water from one container to another, once it starts, it flows faster and faster until the first container is empty. It is affecting everything — hardware, software, the way we use computing and even the way we view computing. This is the phase where it truly has become a utility. If you look at it this way, I think that it is at least as big as the shift to PCs or the Internet.
From the end-user perspective, what is driving this shift?
The interesting thing about this question is that it is consumer end-users that have been driving this transition. Corporations’ budgets have been in lock-down mode for the past four years, while applications like Google Mail and Facebook have been growing exponentially. Consumers are years ahead of business in adapting the many tools and conveniences found in cloud computing. In my opinion, the reasons for this are as follows:
- You can use the cloud from any device. iPhone, Android, iPad, notebook, netbook, it does not matter. Regardless of the way you hook up using cloud apps, you can complete your work as long as your Internet service is reliable.
- You can use the cloud independent of location. Remember the days of running around trying to find a phone data port to dial up the Internet? We can now browse from our car, the train or the park; get our e-mail; complete our part on a project plan; or help a buddy half way around the world to finish her research paper. We send our e-mails while we are stuck in traffic — on the median, of course! It really has become an anywhere utility.
- You can use the cloud to pool resources. Certainly there’s the ability to harness processing power of remote computers to do things faster, but it is not just that. You can also pull together knowledge resources, human resources, process resources, etc. Want to put together a team of great accountants? Geography is no longer a factor, as you can find talent on LinkedIn. In an argument about a fact with a co-worker? ‘Google it’ and leverage some expert who might be half way across the world. In the pursuit of leveraging the world’s resources, cloud computing is revolutionary.
From the vendor perspective, are they pushing or holding back on delivering Software-as-a-Service in the cloud?
Well, there are certainly many software vendors who have held back because they had great business models in the old delivery paradigm. Almost all are adapting now. I think there are lots of reasons this appeals to vendors, but three primary reasons stick out:
- Revenue smoothing. Software sales — and in particular enterprise sales — are very lumpy. It is feast or famine. What vendors like is there’s a nice predictable revenue stream.
- Piracy prevention. Prior to delivering software in the cloud, hackers were always trying to break into software and license keys were always floating around in some digital form. Delivering via the cloud stops piracy as it is very easy to check credentials each time users log in on the Web.
- Support costs. Supporting multiple versions of software that is deployed on different forms of media can be costly. Version control management was often a multi-staffed function, keeping up with the various versions deployed.
Where do you think we are in the transition process in business?
I still think we are in the early stages — less than 10 percent there. In our business, the vast majority of companies still keep their phone systems in the back closet and pay someone $125 an hour to come out and make a change to them. They don’t think about all the capability of a cloud system or worry about it until there’s a crisis. Most companies are still figuring out how to use the cloud and whether or not they’ll use the public cloud, private clouds, or hybrid clouds. There are still a lot of questions out there, but that’s a great thing!
MARK SWANSON is the CEO of Telovations, Inc. Reach him at firstname.lastname@example.org.