In a recent survey, most investigators were aware of the importance of the cloud, but only 7% considered it a more critical technology. Should the cloud be preferred? Is the cloud a strategy or an ordinary investment? The answer is obvious. Although people like us who are active in the cloud space want to make a non-qualitative affirmative answer, the answer needs to be carefully considered.
Is the cloud really important?
In a recent survey, most investigators were aware of the importance of the cloud, but only 7% considered it a more critical technology. Should the cloud be preferred? Is the cloud a strategy or an ordinary investment? The answer is obvious. Although people like us who are active in the cloud space want to make a non-qualitative affirmative answer, the answer needs to be carefully considered. There may be more than one answer, because the value and role of the cloud ultimately depends on various factors related to the business, such as strategy, competitive environment, organizational design, and processes.
Corporate IT investments now seem to be clearly linked to productivity gains. However, productivity gains do not necessarily lead to an increase in profits or market share. If every competitor in an industry increases productivity by 20%, it can retain these benefits (increasing producer surplus and profitability), or it can use lower prices to distribute revenue to consumers (increasing consumer surplus) ), thereby weakening competition and gaining market share. The Red Queen hypothesis states: “When different species evolve at the same time, they maintain a relative balance.” Similarly, if all market participants implement similar strategies, market share may remain the same. As described in Alice Adventures: “You must try your best to keep you in place.” If you want to lead your opponent, you must run at least twice as fast. This has led some people to question IT (whether in the cloud or otherwise): “Is it capable of providing a strategic competitive advantage.”
Cosmic Generation Cloud Service
Before assessing whether cloud computing is strategic, we first need to think about what “strategy” and “strategy” mean. Secondly, cloud computing is both “cloud” and “computation”. In order to maintain a more objective and cautious attitude in the pursuit of truth, before we judge whether IT’s “cloud” is a strategy, we first judge whether IT is a strategy and whether IT investment can bring any return. Next, we need to assess the marginal value of cloud-based IT implementation creation beyond the value created by traditional IT implementation, and reveal that there is more than a relationship between “competitive success” and “IT plus cloud”, but also cause and effect. relationship.
We must also ask what is “competitive success”. Does it mean a relatively high income? An increase in market share? An increase in customer satisfaction? A reduction in customer churn? A market value increase? Is it a cost reduction? Is it short-term or long-term? In addition, what do we think of IT investment? Is it capital expenditure? Training costs for system engineers, enterprise architects, developers, and testers? User training costs? Handling unexpected changes in system implementation costs? Lease and public cloud service expenses? IT provider choices and business development time Cost? Is it all the above factors?
Suppose we define success as a comparison of corporate profitability and capital expenditure. The first question we might ask is “Is there a correlation between them?” Is the company investing more in IT because it can get more Benefits? This simple question immediately raises another question, because pure investment does not mean benefit. This is just like many people buy a treadmill or buy a fitness club membership card, but the body is still very poor. Even if used, there will be a time lag between investment and return. After all, investing in a fitness facility doesn’t immediately bring the body of steel, it only works after a few months or years of exercise. There are also many complex factors that may affect the performance of the exercise, such as schedule, physical fitness, recovery, and nutrition. Similarly, investments in IT hardware may not be rewarded by poor system design or development processes and the lack of consistency between IT and business.
Cloud computing has further promoted the democratization of IT.
Computers used to be limited to a handful of people who were allowed to enter the hidden places inside the data center made of glass. With the advent of personal computers, any employee of the company can use standard applications, such as office software. Now cloud services have unleashed creativity and entered the stage of innovation. You can sing the text on the self-media platform, or you can show yourself with the vibrato. In addition, cloud-based platform-as-a-service (PaaS) enables almost anyone to break through the limitations of packaged software programs and write their own software. This is not only the democratization of IT applications driven by PCs and software but also the democratization of IT products, which can be easily created by an app on a smartphone.
So, in addition to many small improvements, what can cloud computing do? After all, companies face competition from all sides compared to a hundred flowers. Some companies attribute their success to the cloud; some companies attribute the failure to not adopting the cloud. Clouds are important and strategic in the long tail of IT.
Cloud computing promotes IT industrialization
Cloud computing can be seen to some extent as a representative of IT industrialization and the end of the era of handcrafting. At present, many experiences from the development of the manufacturing industry are being applied consciously or unconsciously through the cloud.
Apple’s own design is outsourced to the supply chain partners such as Foxconn. Similarly, companies can outsource IT resource management to cloud service providers (such as the Foxconn Group’s “Cosmic Generation Cloud Service”), just as most companies take the approach of outsourcing logistics and distribution to downstream partners. Even the global consumer goods giant Procter & Gamble, which does not operate its own freight lines or retail stores, use commercial transportation services and sells them through one or two cabinets at the retailer Wal-Mart. This is also the way companies use cloud service provider services or lease several server cabinets.
Enterprises can mix their own devices, virtualized resources, pay-as-you-go resources, and provide software in a service. Whether it’s human resources or IT resources, this mix can strike a good balance between cost, flexibility, and risk.
The experience accumulated in manufacturing also applies to cloud-based IT; instant manufacturing is similar to on-demand use of resources; reducing installation time in manufacturing corresponds to reducing the configuration time of virtual servers in IT. Design engineering and manufacturing engineering are merging through “manufacturing-oriented design.” This is similar to the “DevOps” trend, where the boundaries between software design, software development, and IT operations are increasingly blurred.
In the manufacturing industry, production lines that are specifically optimized for a product are gradually being replaced by flexible manufacturing units. Flexible manufacturing is not the only alternative, but also supports flexible production for product needs. In the IT world, a versatile cloud architecture may not be optimized for a particular application, but its flexibility can reduce the time it takes to get into production and scale applications.
Enterprises should select suitable cloud service providers according to their own business development, whether the server is safe and stable, cost-effective, operation and maintenance service response speed, support for flexible migration and disaster recovery backup, whether there are overseas resources and other factors as evaluation criteria, compared with large The high complexity and service experience of enterprise cloud products, serving multinational corporations and small and medium-sized enterprises, is a good choice for ITaaS (IT as a service) to provide a full range of customizable IT services.