The path to cloudsourcing

Have you ever wondered what exactly cloud computing is, and why everyone seems so excited it? Gartner defines cloud computing as "a style of computing where scalable and elastic IT-related capabilities are provided 'as a service' to external customers using Internet technologies.” How’s that for a mouthful?

My name is Ryan Nichols, and I’ve spent my career bridging the gap between business and technology at companies like McKinsey, SAP, and Intuit. Now I’m at Appirio, helping bridge that gap for companies moving to the cloud. I’m introducing this blog to explore how this thing called “cloud computing” can apply to your business -- because the potential impact of cloud computing is a whole lot more exciting than its technical definition.

Think about the impact that electrical utilities had on companies in the 19th century, an analogy to cloud computing first explored by Nicholas Carr. There was a time when every company needed to spend significant resources, time and energy thinking about how to create its own electricity on its own private infrastructure. Today, companies just plug in and use electricity as a service. That does not mean that electricity is any less important today (indeed, it is far more important). It does mean that most organizations today can focus their time on how to apply this relatively plentiful and inexpensive resource to meet the needs of their customers, rather than how to generate it.

Over a period of 50 years companies moved from generating 90 percent of their own electricity to consuming 90 percent from public utilities. Carr was the first to argue that this same shift is occurring in computing today -- and it is likely to happen much faster. Maintaining your own data center will someday soon seem like maintaining your own power plant -- a wasteful distraction for the vast majority of organizations.

Why is this important? Because if you can spend less time and resources on building out an IT infrastructure, you can pay more attention to the systems and processes that support and grow your business.

The business case for cloud computing has driven incredible adoption. There are two million users of Salesforce.com, 25 million users of Google Apps, and 25 million cloud servers on Amazon. And its not just small business -- leading enterprises like Japan Post, Genentech, Seagate, and Avon are doing more and more in the cloud.

It’s pretty clear cloud computing is here to stay. The bigger question (and one this blog will focus on) is how companies are adopting the cloud, because this is changing as quickly as the cloud itself. Enterprises started adopting the cloud at the periphery, with edge applications such as salesforce automation. These initial cloud initiatives were driven by the business, and completely opportunistic. Businesses were able to spin up infrastructure or adopt SaaS applications at the swipe of a credit card. Though this was liberating from a business standpoint and led to significant application-specific benefits, over time it has resulted in multiple, conflicting "SaaS silos" across the enterprise.

This pattern has been changing over the last two years. Now, cloud adoption is being jointly led by IT and business. IT is looking to cloud-based solutions as a way to drive innovation while keeping costs low. Enterprises are pursuing a much more thoughtful, well architected, business case-driven approach to migrating to the cloud. They are moving from adopting point applications to building complete business solutions that bring together multiple cloud applications and cloud platforms. Genentech, for example, showed last week at Google I/O how they’re bringing Salesforce and Google together to better support how their salespeople work.

This emerging trend is called "Cloudsourcing" -- sourcing complete solutions to run your business on the public cloud, through a combination of cloud applications, cloud platforms and cloud infrastructure. Cloudsourcing is a more systematic approach to sourcing piecemeal from the public cloud, the result of which is a well-planned portfolio of applications on a small set of strategically chosen, connected cloud platforms, well integrated into the overall enterprise architecture.

This transition will not occur overnight, CIOs will undertake this journey in steps. What will the path to running the business on the cloud look like? What are the key drivers, challenges and benefits? This blog will explore these topics, and hopefully help you "think big" about the cloud and your own path to cloudsourcing.

Ryan Nichols is the Vice President of Cloudsourcing and Cloud Strategy for Appirio, a cloud solution provider.