Why use the Cloud?

A lot of people ask "What is Cloud Computing?" There are good answers for that, and I'm sure I'll expand on it more in this blog as well. SaaS, PaaS, IaaS, Public, Private, Hybrid, Virtualization, Storage, Compute, Developer Clouds, Production Clouds, etc. Lots and lots of definitions of "What is Cloud."

But there's a fundamental question I want to answer - Why use the Cloud? What's the business value for Cloud Computing?

Well - it's all about 3 things:

1. Agility
2. Capability
3. Economics

Agility - using on demand software and infrastructure enables you to be more flexible and achieve a given result faster. If you're looking to implement a CRM package, turning on Salesforce.com or NetSuite takes a day or two to start and a week or two to get rolling - much quicker than the usual months-long implementation effort for on premise package installation. If you need to turn on some developer or testing lab server instances you can sign up with an Skytap, GoGrid or Amazon.com, configure a virtual instance and be completely done by lunch instead of the usual few weeks procurement process to buy a new server, get the IT department to install and configure it, and be able to start using it productively. Using cloud based platforms for development, like Azure, Long Jump, Force.com or App Engine enable much faster software development and implementation and let you start realizing the business benefit of your application much sooner.

Capability - Using proven, scalable services to build on enables much richer functionality and incredible scalability that you would be very hard pressed to achieve from scratch even if you could afford to build out all of the infrastructure and functionality. You can add amazing rich features to your web application, whether it's web analytics, photo sharing, data entry forms, data visualization and other business functions so much faster by integrating existing software service like Google Analytics, Flickr, Caspio, or Birst than you ever could by trying to write requirements, design, build and test the software, deploy the new feature and worry about scalability. When you're looking to deploy robust, scalable applications that support thousands of users around the world, deliver fast performance to every corner of the globe, and meet modern expectations for responsiveness and user experience using Cloud based Content Delivery Networks, Cloud based in-memory caching or databases, cloud-based load balancing between data centers and across tiers, and instantaneously available storage and compute capacity enables companies to have world-class capabilities that they could never hope to achieve by building out their own internal data centers.

Economics - Like many revolutions, by "doing things differently" Cloud based solutions are able to provide very large cost savings. For individual services, whether it's reliable storage or scalable web servers, a huge IaaS provider like Rackspace can provide much lower cost per unit than an internal data center could. These large Cloud providers make an investment in automation that enables them to efficiently manage orders of magnitude more capacity per engineer. They are able to buy in bulk from server and equipment vendors, site data centers next to low-cost electricity sources, and operate their data centers like a modern "factory" instead of the "cottage industry" of the internal corporate data centers - with all the cost savings you would expect. The same is true of SaaS providers, who are able to invest massive amounts in software engineering, user experience and design to produce world class software and share the costs across dozens, thousands, or millions of subscribers. An individual corporation will need to invest much much more to build their own version of a software package or service than it would cost to subscribe to a well implemented service.

For the Cloud subscriber, there is another benefit to subscribing to a cloud service rather than buying or building your own internal version - the switch from a large up-front capital investment to a monthly operating cost. This On Demand pricing model enables you to start small and incrementally increase your investment as users move to the service or your customer base grows, rather than requiring you to over-provision for your hoped-for 1 or 2 year projections. This subscription model also ensures you have continued flexibility to evaluate whether the deployed solution is meeting the needs of your customers - the cost to increase the service, switch to a different solution, or turn off the service completely if the business model is not working no longer hinges on huge up-front investments that must be managed and written off - you simply stop paying the monthly subscription and move on.

As you can see, using Cloud based services provide very real, concrete business value by enabling more Agility, more Capability, and better Economics. There are also numerous other intangible benefits to moving to Cloud services. You need to automate your deployment, you can test more easily, you need to define real service boundaries and interfaces, you can prototype integration and new services quickly, you have access to a wider range of technology options, and on and on.

That's Why you SHOULD use the Cloud!!