Leveraging Cloud Computing For New Business Enablement

James Staten In yesterday’s Forbes.com HP VP and CTO Russ Daniels wrote a short commentary on how cloud computing can help reignite the global economy and his focus is what makes the difference. Where Russ differs from many others on cloud computing in that he is talking about the vision from a higher, business level than most others, who are down in the IT weeds most of the time. Where Nick Carr talks about cloud computing sending corporate data centers to the trash heap, Russ is looking at what new business opportunities can be enabled by the cloud.

It’s important to be careful, though, in articulating new business enablement that truly is leveraging the key differentiators of cloud computing (pay per use and elasticity) from the normal outgrowth of the Internet. MagCloud is a good example, Snapfish is not (but Animoto is). The key difference is that cloud computing is logic processing on the Internet that is paid for only when it is activated and can scale as large or small as needed at the time it is needed. And this logic processing is your applications – not mashups, SaaS or leveraging others’ work. Sure you can use SOA to string together other people’s logic but it’s the business process you design in SOA that is cloud computing.

The key to building the ideal business model for cloud computing is the tight correlation to revenue generation. If you have to do a lot of logic up front – before you get paid for it – cloud computing may not be the best fit. This is especially true if your business model results in a heavy persistent logic footprint. Pay per use models are never cost effective if constantly consumed. Variability is what makes them attractive.

What new business models are you bringing to the cloud? Forrester is actively researching enterprise case studies of cloud computing and wants to hear your story. Contact me if you have a good story to tell or come meet with me at Forrester’s IT Forum in Las Vegas, May 19-22.

By James Staten

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