Wednesday, 7 July 2010

Run the Business versus Change the Business and Cloud Computing

Having had the fortune to work with one of the pioneers in Private Cloud Computing - Credit Suisse - I have become familiar with the terms "Run the Bank" and "Change the Bank". What the former refers to are the costs of business as usual. What the latter refers to are the funds allocated to supporting new business initiatives. By building a Private Cloud Infrastructure around a Platform as a Service (PaaS) Model - Credit Suisse have achieved 35%+ reduction in operational / Run the Bank costs and 30% savings in Change the Bank costs. Of course the holy grail is to be able to shift saved funds from the Run the Bank side and then funnel at least a percentage of them to help Change the Bank. For anyone who has been lucky enough to hear the Credit Suisse story - either at Oracle OpenWorld or one of our Cloud for Executives Forums - they will know that it's a very compelling case study.

It was with interest that I read an article in the Chronicle today http://tinyurl.com/3akdbzh. The author - Bernard Golden - talks about the experience of the Telegraph newspaper in the UK moving to the Cloud as outlined by Toby Wright, their CTO. What I found particularly interesting was the reference to the same kind of terminology "Run the Business" and "Change the Business". I quote from the article "Wright presented a chart showing the changing makeup of IT headcount and how cloud computing supports delivering business value. Over a four year period (2008-2011), IT headcount shifts from 90% "Run the business skills"/10% "Change the business skills" to 20% "Run the business skills"/80% "Change the business skills.". From the article it seems that the Telegraph are taking the Public Cloud approach.

So great case studies of money being saved and focused on innovation.

So if you are building cloud - what kind of cloud infrastructure should you be looking to build? I love this quote from the article: ".....preferring to pay for application services rather than leveraging IaaS, which would leave it still managing infrastructure, albeit non-physical infrastructure, which Wright refers to as "virtual tin."

Which really echoes my believes well - which is that Virtualization / Infrastructure as a Service is not an optimal Cloud strategy for Enterprises - it saves money on hardware - and leaves "virtual tin" (in my next blog post I will talk about the economics of this).

Bottom line is this: the more is provide out of the Cloud - the more value there is to the business. Platform as a Service - with execution (Java) and data management (database) and management - is the sweet spot for the Enterprise from a Cloud perspective.





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