Business Drivers for Cloud Infrastructures

There are several business challenges that drive the cloud discussion and cloud infrastructure market.  These business challenges are very different from the technical challenges that are more commonly discussed along with cloud.  It’s key to differentiate between the two because typically only one or the other is relevant to any given audience.  If you’re talking to an engineer something like hardware redundancy is quite relevant, but that same concept isn’t relevant to an end-user or CxO.

For this discussion we’ll focus on Business drivers for cloud and save technical demands for a later time.  While thinking about business demands you’ll want to put the data center as a whole in perspective from a business standpoint.  Put on a CxO hat for a minute and decide what data center means to you.  If you’re thinking like many CxO’s you’re thinking of the data center as a cost center, not much different from the cost of paying the lease on a building, or paying taxes.  It’s a necessary expense of doing business.

Recently this has been very true, for instance the business needs a way to communicate more quickly than the typed memo so they invest in an email system, the email system is a cost no different from the paper and ink required for the memos.  This wasn’t always the case, originally Information Technology (IT) was a competitive advantage, remember way back when not everybody had a data center infrastructure?  Back then building a server or network for a business application gave you an edge, lately it’s more of a keeping up with the Jones’s, who by the way are very hard to keep up with.  That brings us to our first business driver for cloud:

Competitive Advantage: The ability to do something, better, faster, or at lower cost than the competition.

Applying that to the cloud: If my competition is thinking/building their IT infrastructure in the traditional methods and paying the price for it what can I do to improve on that?

Now let’s look for some other business drivers, and lets grab the easy ones (‘low hanging fruit.’)  Nearly every business on earth has one common goal, ‘grow the business.’  There are few if any businesses that hit a certain size and say ‘This is just right, let’s stop right here!.’  That only works for Goldilocks.  So then to put this in simple terms let’s assume all businesses want the ability to ‘scale.’  Now that seems easy enough but let’s take that idea one step further: in a good economy I may want to scale out (grow), in a bad economy I may want to scale in (focus on core competencies.)  With that in mind let’s move on to our next business objective:

Ability to scale the business (out and in):  Being able to deploy business applications on demand and retire them when needs change.

Applying that to the cloud: I need to bring new business initiatives online quickly and decommission non-profitable initiatives on-demand.

So now we have two business drivers, and while there are many we don’t have time for a comprehensive list.  Let’s look for one more that is another nearly ubiquitous driver.  In most companies globally, private or publicly traded, there is one major focus and that is profit.  Profit is what can be applied to the owner’s pocket or increase the share value.  Profit is what’s left over after all of the business costs.  What’s an easy way to increase profit?  Reduce cost.

Reduce Costs:  Reducing the amount spent to run the business.  If the goal is increasing profits then costs must be reduced without sacrificing revenue (total amount of money received by a company for goods or services sold.)

Applying that to the cloud: I need to reduce IT overhead without sacrificing business revenue.

So three of the major business drivers that push the various cloud initiatives are: Competitive Advantage, Ability to scale, and Reduction in cost.  These are the real reasons people are looking to cloud architectures of all shapes and sizes in order to redesign the way IT is done.

The most important concept is that cloud is retooling the way we think of IT.  If you think in terms of ‘How can I improve upon the way I run IT now’ you’ll miss the mark.  In order to gain the maximum benefits from cloud infrastructures you need to think ‘What am I trying to do and what’s the best way to do that.’

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  1. Cloud Types says:

    […] discussed the business drivers for a transition to cloud in a previous post ( and the technical drivers here […]

  2. […] a previous post I’ve described the business drivers for Cloud Computing infrastructures (  Basically the idea of transforming data center from a cost center into a profit […]

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